Development

Digital Transformation

May 31, 2023

What Is the North Star Framework?

A model for managing products called the North Star Framework identifies a single, critical metric known as the North Star metric or NSM. This is the one metric that, in the opinion of its creator, Sean Ellis, best depicts the fundamental value that your product offers to customers. By establishing a North Star, you develop a shared purpose for your product.

The North Star Framework enables teams to communicate, set priorities, and concentrate on impact. The framework assists organizations in moving toward a more product-driven strategy, where they enhance their systems and procedures to ensure the success of their products.

This article covers the benefits of the NorthStar Framework, explains how to implement it, and reveals the qualities of an appropriate North Star. You will discover the use cases and real-world examples of the framework implementation.

Benefits of the North Star Framework

Why is North Star Framework essential? Along with the North Star metric, the framework also has several inputs that work as elements to create the metric as a whole. Product teams' daily work has a direct impact on these inputs. This combination of metrics and inputs is vital for any organization for three reasons:

Prioritizing and Hastening Decentralized Decision-Making

The North Star Metric Framework is the practical instrument for converting your strategy into specific organizational and development decisions with clear and quantifiable metrics. You can use the framework to make decisions that align with Support, Customer Success, and Product Marketing.

Aligning Teams and Communication

Using the North Star approach, teams can create alignment between their members and stakeholders. If a team has been operating without a North Star, it can also aid in course correction or re-alignment. Information about a North Star that is visible to team members and interested stakeholders assists teams in staying focused and moving in the right direction.

Focusing on Impact and Product-Led Growth

By implementing the North Star Framework, companies can find ways to offer products that will address clients’ real needs. To assure the success of its goods, the framework optimizes team structures, funding cycles, communication routes, and other processes.

The Elements of the North Star Framework

Let’s review the North Star Framework components first to understand the model better.

Source: Amplitude

The North Star Metric

The North Star Metric, a single crucial rate, count, or ratio, symbolizes your product strategy. It is the foundation of the North Star Framework. The relationship between the customer problems the product team is working to solve and long-term, sustainable business results is defined by this metric, which is a leading indicator.

The fact that the NorthStar architecture only has just one NSM stands out as a distinguishing feature. Large companies with numerous divisions, various product management and product development departments, and various client bases could have various North Star Metrics. However, a team should consider having a single North Star if they contribute to a single profit and loss (P & L), with a single product development department and a single product.

Results and Value

The North Star Metric is a crucial predictor of long-term business success and consumer value. You can anticipate that your business outcomes will align with it as it changes and improves over time.

Inputs

Both the inputs and the metric are significant in the North Star Framework. Inputs are a set of three to five crucial, complementing criteria that you feel have the most direct impact on the North Star Metric and believe your product offering can change.

Industry, business model, and a product's distinctive qualities can all significantly impact the inputs. The secret is pinpointing the crucial elements that go into the North Star Metric for your company. You should see the North Star Metric as a result of essential, descriptive, and practical inputs.

“The Work”

The activities connected to a North Star Metric and inputs are called "The Work." They include research, design, software development, refactoring, prototyping, testing, and related tasks. Teams should link development techniques to their North Star. Your work should be under the strategy directed by your North Star.

How Do Metrics and Inputs Work Together?

Using the North Star Metrics Framework, a team chooses one meaningful metric and a small number of inputs contributing to it. The activities of the product team influence the inputs that drive the metric. As a link between the product and the larger company, the North Star is a leading sign of sustainable growth.

To get a working framework, you need to do North Star planning:

North Star Planning

If the North Star metric you choose doesn't meet every business need of your company, you risk wasting valuable time, resources, and money with little to no return on your investment. For successful outcomes, the entire sociotechnical system must be continuously evaluated.

What Professionals Do You Need on Your Team?

Although there isn't a set list of individuals involved, remember that you need to unite the entire organization behind the North Star strategy. As a result, it is necessary to represent a variety of viewpoints, which is what the following roles aim to do:

Head of product who is responsible for overseeing product development, managing other product team members, and ensuring that products adhere to the firm's product and business strategy.
Product manager acts as a liaison between the business, technical, and design teams and directs the development of a company's product or feature.
Product team is responsible for understanding clients’ needs, developing new products, marketing them, explaining their advantages, and evaluating their effectiveness.
Head of sales is responsible for developing, articulating, and carrying out the organization's sales strategy.
Product marketer focuses on product positioning, sales enablement, product messaging, buyer personas, KPIs, satisfying customer demands, and product demos.
Customer success ensures customers achieve their goals with the company’s products, improves customer experiences, and strengthens relationships with them.
Support assists business operations and addresses questions and issues raised by clients regarding the company's products and services.

North Star Framework Workshop

Required Time

Achieving alignment on essential points of the North Star Framework can take several 60- to 120-minute workshops. With experienced facilitators and team members, the North Star Metric and Inputs can be identified within one 120-minute workshop.

Facilitation Materials Needed

The critical material for the North Star Framework workshop is user journey data. It refers to all the information gathered about that user and their in-app behavior.

How long does a typical user session last?
How many times a month do customers use a particular product feature?
How many of your users are employed by a business with over Х personnel?

User analytics can be used to find the answers to each query. To execute the proper data-driven activities, it is crucial to comprehend what that data implies.

Using a whiteboard and sticky notes can streamline the process.

Tips for Running Remote Sessions

If you run the North Star Framework workshop online, we recommend using a virtual whiteboard. These devices offer a shared visual workspace that may be used for various types of group work, much like an actual board. The best online whiteboards include Miro, Stormboard, MURAL, Limnu, and InVision Freehand.

Related Practices

Numerous practices in the project Discovery phase connect exceptionally well with the North Star framework:

Impact mapping. A graphic planning process for selecting the features to include in a product.
Service blueprint. A technique initially used for service development but also for diagnosing operational efficiency problems.
Journey maps. Graphs or other visual representations of the steps someone takes to accomplish a goal.
OKRs. A goal-setting system individuals, teams, and organizations use to set measurable goals and track their results.

The North Star can also be an excellent instrument for merging with activities in the Options pivot as a crucial method of choice evaluation. They include Design sprint, Prioritization matrices, Values Slicing, and Backlog Refinement.

Qualities of a Good North Star

The North Star Framework concentrates only on one crucial metric. It is easier for product executives to follow a single North Star than to chase several equally essential metrics. While there isn't a single quality that can accurately describe a North Star, the following are some important traits or features of a strong one:

Expresses value. It should be clear why it conveys value to the customer.
Describes the product's vision and strategy. Once discovered, a strong NSM directly connects to your product strategy and vision. The two should be clearly seen in it.
Serve as a leading indicator. It should help predict future outcomes rather than just report on previous events.
Actionable. You should be able to influence Strong North Stars through your work and action.
Comprehensible. Your North Star should make sense and be easy for non-technical people to understand.
Measurable. If you can’t measure your NSM, it is meaningless. You should be able to track it.

Real-World Examples

The section below shares some North Start Metric examples of well-known companies. Existing North Star models can help you understand the framework better and inspire you to choose your NSM.

North Star Metrics of Businesses

Example 1: Spotify

The North Star Metric of Spotify is: “Time spent listening to music by subscribers.” What makes Spotify's NSM so great? There aren't many external variables, but it measures the value that users receive from the platform. The NSM will also rise if awareness, acquisition, or retention metrics increase.

As inputs, Spotify measures the number of premium subscriptions, average time per session, the average number of songs shared per user per month, the number of sessions per week, and recommendations. The output metric remains single: time spent listening to music. The NSM allows Spotify to set the right priorities for further platform development.

Example 2: Facebook

Facebook's North Star Metric is frequently misunderstood. Mark Zuckerberg has used "Monthly Active Users" (MAU) as a North Star Metric from the beginning. People frequently misunderstand Facebook’s NSM as "the number of new friends per week/month." However, NSM identified as “monthly active users” truly represents the value the platform brings to people and the likelihood they will continue using it for an extended period.

Measuring active users is a better metric for growth than new users. Active users are the customers who benefit most from your products. They are more likely to support the brand and are less likely to leave. On the other hand, brand-new clients can pose a risk. Engaging a new user is only half the battle. Retaining that customer is what matters for revenue. Therefore, Facebook’s NSM is the right single metric for long-term growth.

Example 3: Burger King

The digital team at Burger King used the North Star Framework to build a North Star Metric called “Digital Transactions Per User.” They also identified three inputs: frequency, registration, and new user activation. Then, they organized groups known as "squads" to drive these inputs.

The Burger King teams prioritize and trace one feature work first to these inputs and then to their “Digital Transactions Per User” North Star Metric. For instance, to drive the "frequency" input, one squad prioritized a "mobile order only coupons" initiative.

All Burger King employees share the same objectives: increasing brand loyalty and revenue. But if they make those their objectives, they would all go aimlessly in separate directions. The North Star Framework offered the company direction so everyone could work on the same things.

Key Concept: Product-Led Organizations

The North Star Framework excels in businesses that want to become more product-driven. Product-led companies believe they can achieve sustainable development by helping customers solve their problems with their products.

To ensure the success of its products, a product-led company optimizes team structures, funding cycles, communication channels, and other processes. Calling a company "product-led" does not imply that someone runs it in the division or position known as "product management". Leveraging the power of products and product teams means being product-led.

Looking for a team of experienced software developers to reap the most out of this approach? This is where our company can come in handy.

Artkai’s Product Development Case Studies

Artkai is an End-to-End Development agency that creates intelligent digital products. From idea to a successful outcome, we provide clients with outstanding performance, security, and quality. After thorough research, we always find the correct solution that constantly motivates us to build great user experiences and profitable products. Look at our case studies.

Internet Banking App for ProCredit Georgia

ProСredit Georgia aimed to digitalize its banking system. They wanted to reduce the pressure on staff at physical branches and contact centers and emphasize ProCredit's financial advisory services. Our team conducted a wide range of research projects, including numerous meetings with ProCredit's IT division and discussions with customers and bank staff members.

We divided the design effort into different areas with clear milestones for advancement, which made the client's implementation simpler. Artkai redesigned the mobile banking app and developed web banking with a dashboard and quick access navigation.

Our efforts brought the following remarkable results:

99% percent of financial services became accessible online.
The time for transferring money online or via a mobile banking app was cut twice.
Blocking a card through a mobile app became 60% faster.
Event logging on the mobile app is twice as fast as on the previous version.

DNA Payments: An Intelligent Payment Ecosystem

One of the largest omnichannel payments firms in the UK, DNA Payments Group, contacted the Artkai team and asked us to rebuild their present interface. The website needed to be completely redesigned to benefit current users and draw in new ones.

Our team significantly changed the portal's core elements, creating an intelligent payment ecosystem. Following its revamp, DNA Payments was on its way to becoming the fourth-largest payment provider in the United Kingdom by the end of 2022. The website now provides rapid, safe, and easy-to-use online and offline payment alternatives.

Our platform rework directly impacted the following outcomes on a larger scale:

+18% of new users were acquired during the first month after the redesign.
The churn rate was reduced by 2.3 times.

Boost Your Product-Led Growth with Artkai

Artkai is an award-winning full-cycle software development company that builds digital products with a quicker time to market, increased customer satisfaction, and higher revenues. We offer full-cycle web application development services and mobile development services for deploying functional, high-quality apps. With our next-generation solutions, you will strengthen your position in the market, engage more clients, and ensure stable business growth.