The Tuesday Afternoon Test: Building KPI Trees That Actually Work
A practical guide to creating metrics that connect daily work to business survival – and kill useless projects before they waste your time
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You know that feeling when your team is shipping features left and right, everyone's working overtime and six months later... your business metrics haven't budged? Yeah, that feeling.
The problem isn't that your team isn't working hard enough. The problem is the massive disconnect between what you're building and what actually impacts your business.
Enter KPI trees – your map for connecting what your team builds to what actually matters to the business. Let's break down how to create one that actually works.
What’s a KPI Tree?
A KPI tree is a simple visual framework that breaks down how your high-level business goals break down into the metrics your team can actually influence day-to-day.
The structure typically flows from top to bottom:
North Star: The ultimate business objective your product is driving toward (revenue growth, profit margin).
Supporting Metrics: Critical measurements that directly impact your North Star metric.
Driver Metrics: Specific product levers your team can optimize.
Input Metrics: Concrete daily activities and decisions within your team's control.
The true value of this really happens when everyone on the team can trace a direct line from "what I'm working on today" to "how this helps the business".
What’s wrong with most KPI Trees?
Most KPI Trees are just sitting somewhere collecting dust. Let’s not pretend otherwise.
You've seen this movie before. Someone spends weeks crafting the perfect measurement framework. Everyone nods approvingly in the big review meeting. Then that’s it. It’s forgotten entirely a month later.
Why? Because most KPI Trees are fundamentally broken from the start.
Too abstract – Packed with fluffy metrics nobody actually knows how to influence. "Increase customer delight" sounds nice until you realize nobody knows what levers to pull.
Missing the middle – Great at high-level business goals, great at listing daily tasks, but with zero connection between them.
Copy-pasted from somewhere else – Some PM found a great article about how Netflix measures success and decided those exact same metrics should work for your completely different business. They won't.
Orphaned metrics – A beautiful diagram where nobody actually owns moving any of those numbers. "Who's responsible for this?" gets met with awkward silence and averted eyes.
Abandoned – Created once in a burst of strategic enthusiasm, then left to wither and die.
Here's the truth: If your KPI tree isn't actively influencing decisions on a Tuesday afternoon when your team is debating what to work on next, it's just a pretty diagram that makes you feel strategic. You either build your tree into existing meeting rhythms, use it explicitly when making tough calls on priorities and update it when you learn something new... or don't bother creating one at all.
Let’s actually build one that’s useful just for example
Enough talk about how broken KPI trees can be. Let's build one that won't end up in the digital trash next month.
I'll use a B2B subscription-based business software product (i.e. SaaS). Not because it's special, but because it's concrete. You can adapt this approach to whatever you're working on.
Step 1: Start with your North Star
Start with something real. Not a buzzword, not a vanity metric, not some fancy consultant-speak. The actual, honest-to-goodness measure of whether your business is working or not.
For most businesses, this is dead simple: revenue or profit. Cash in the door. Money in the bank.
Your North Star should be:
Actually tied to business survival – Not how many likes your product demo got on a social media post.
Something you can count – Preferably in dollars, not "engagement" or "delight" or other fuzzy concepts.
Instantly clear to everyone – From the CEO to the newest hire, everyone should get it immediately.
For our example business, we'll use Annual Recurring Revenue (ARR). Simple. Clear. No ambiguity about whether we're winning or losing.
Don't overthink this part. If your business needs money to survive (hint: it does), then measure the money.
Step 2: Find the levers that actually move money
Now we’re getting somewhere, forget the 42 metrics that your analytics dashboard tracks. Ask yourself, what are the 2 to 4 numbers that, when they move, your North Start inevitably follows?
These aren't nice-to-haves. These are the direct pipelines to your bank account.
To spot them, ask two brutally simple questions:
"If this number goes up, does money follow?" – Not eventually, not theoretically, but reliably and soon.
"If this number tanks, are we screwed?" – If the answer is "we'd be fine," it's not a real driver.
For most subscription businesses, it's dead simple:
Those basic components of your revenue formula? They're not just math. They're your supporting metrics - the first real branches of your KPI tree.
For our example:
Customer Count – How many people are paying you money? Plain and simple.
Average Revenue Per Customer – How much are they paying? No fancy acronyms needed.
Retention Rate – Are they sticking around or running for the exit?
That's it. Three branches. Not fifteen. Not thirty-seven "critical metrics". Just the honest truth about what moves the money.
If any of these feels like a stretch, you're probably fooling yourself.
Step 3: Get specific about what moves those dials & levers
Now we're getting concrete. Each of those big levers has smaller levers connected to it. Let's give them names.
Don't make this complicated. This isn't the time for creativity or showing off your business school vocabulary. What actually influences these numbers? That's all we care about.
For Customer Count:
New Customer Acquisition – Fresh new customers coming in the door.
Reactivation of Churned Customers – People who left but came back.
For Average Revenue Per Customer:
Initial Contract Value – What they pay when they first sign up.
Expansion Revenue (Upsells) – Getting existing customers to pay you more.
No theoretical metrics. No "engagement scores" or other fluffy nonsense. Just the honest factors that move the needle.
Our tree is growing now, but with actual branches that matter - not decorative ones that look pretty in presentations but wither when real work begins.
Our tree is growing:
Step 4: Find what your team can actually have control over
Here's where most KPI trees crash and burn. They stop at lofty metrics nobody knows how to directly influence. So let's not do that.
For each driver, what specific inputs can your team actually change through their work on Tuesday afternoon? Not theoretical levers. Real, tangible actions that move numbers.
For New Customer Acquisition:
Lead Generation – How many potential customers are we getting into our pipeline?
Demo Request Rate – Are people interested enough to see how the thing works?
Demo-to-Close Rate – Can we convince them it's worth paying for?
For Customer Retention:
Support Ticket Resolution Time – How fast do we fix problems when they happen?
Feature Adoption Rate – Are customers actually using the stuff we build?
Now we're talking! These are numbers real humans can actually move. A marketer knows how to get more leads. A salesperson knows how to close more demos. A support person knows how to resolve tickets faster.
This isn't strategic hand-waving anymore. This is a map that connects what people do all day to the money coming in the door.
Our tree is getting more detailed and actionable:
These are metrics your product and engineering teams can actually impact through their work. If they can't point to which specific metric their current project influences, they're probably working on something that doesn't matter.
Step 5: Make metrics personal or don’t bother
A KPI tree without owners is just a road trip with no driver. The car looks great sitting in the driveway, the map's all marked up with destinations, but nobody's actually driving. Without someone gripping the wheel, you're not going anywhere.
For each metric that actually matters:
Pick one human being who’s responsible for it - not a department, not a team, a person with a name.
Write down the honest truth about where you stand today - no sugar-coating, no aspirational thinking.
Set a real number you're aiming for - not "improve" or "optimize" but an actual figure that either happens or doesn't.
Decide how often you'll check - and stick to it whether the news is good or bad.
Create a dead-simple table:
Ownership isn't a fancy title on a slide. It's a habit that has to become as normal as checking your messages. Here's what works:
Start every review meeting with a 5-minute "numbers check" – not as an afterthought, not when there's good news to share, every single time.
Put the metrics where they're unavoidable – a dashboard on the wall, pinned to the top of your chat app, an automated daily Slack message, wherever people can't pretend they didn't see them.
Make "how's your number doing?" as casual as asking about lunch plans – the moment it feels like an interrogation, you've lost.
Celebrate honest bad news over comforting lies – When someone says "My number's down 20%," that's not failure—that's the starting point of progress. The only real mistake is hiding reality.
Swap who owns what every quarter – fresh eyes catch what veterans have learned to ignore.
This isn't about creating more work. It's about making the important work visible. Without this rhythm, your beautiful KPI tree becomes just another useless artifact – impressive in the meeting where it debuted, forgotten by Friday and completely abandoned a few weeks later.
Like that expensive bike you bought in January that's now collecting dust in storage, your unused metrics framework just becomes an awkward reminder of good intentions that never translated into action.
What makes a KPI Tree useful?
The power of a good KPI tree is dead simple: it connects dots that should have been connected all along. When your tree works, the fog lifts:
Your PM improving search doesn't have to hope her work matters - she traces the exact path: better search → more product views → higher conversion → real revenue.
Your engineer fixing payment bugs isn't lost in code - he's directly watching cart abandonment drop and sales climb.
Your support team closing tickets faster isn't just hitting arbitrary SLAs - they're directly feeding your retention numbers.
This isn't corporate strategy theater. It's Tuesday afternoon and everyone from marketing to engineering can point to exactly how their day's work translates to money in the bank. No more guessing. No more "trust me, it's important". Just a clear line of sight from what you're doing right now to what keeps the business alive.
How to use it to make decisions and not have it collect dust?
Most KPI trees die a quiet death in some forgotten Miro board or Google doc. A useful KPI tree isn't a document - it's a decision-making framework that shapes what happens every day.
Here's how to keep yours alive:
Put it to work in prioritization meetings
Stop asking "is this important?" and start asking "which metric will this move and by how much?"
If you can't answer that question, you're probably working on the wrong thing.
Let metrics kill projects before they waste everyone's time.
Treat it as a living document, not a carved monument
Your first tree will be wrong in places - that's fine.
Update it as you learn which levers actually move your business.
Kill metrics that don't predict outcomes, add ones that do.
Make it part of everyday language
Don't just email it out and hope magic happens.
Have team members explain how their work connects to specific metrics.
Create rituals where people trace their work's impact up the tree.
Build the simplest possible dashboard
For each key metric, show what drives it and what it influences.
During reviews, always ask: "What's changing, why is it changing, what should we do about it?"
Show trends over time, not just point-in-time numbers.
Reminder ⏰ A KPI tree pinned to your wall but ignored in meetings is just expensive wallpaper. The value comes when it shapes decisions, kills bad ideas early and focuses everyone on what actually moves money.
What traps should you be on the lookout for?
Your KPI tree isn't bulletproof. Here are the 4 main silent killers that will turn your framework into dangerous nonsense:
Confusing coincidence with cause
You launch a feature, revenue spikes and high-fives erupt across the office.
Reality check: That "win" was actually from the marketing campaign that launched the same day.
Always validate cause-effect with controlled rollouts or segmented analysis.
Ask: "What else changed during this period that could explain these results?"
Drowning in too many metrics
The most powerful KPI trees focus on 5-7 core metrics that truly matter.
Every additional metric dilutes attention and creates noise.
Be ruthless about cutting metrics that don't directly connect to outcomes.
When you try to track everything, you end up focusing on nothing.
Being blind to qualitative signals
Your dashboard shows green across the board while users are quietly hating your product.
I've watched teams celebrate conversion targets while users rage-clicked through painful flows.
Numbers lie when they lack context.
Pair quantitative data with qualitative insights (support tickets, user interviews, session recordings) to uncover the truth behind the numbers.
Creating bad incentives
What you measure becomes what people optimize - sometimes with disastrous side effects.
Support teams racing to "close tickets fast" while leaving customers with unsolved problems.
Sales teams hitting "demo request" targets by misleading prospects about features.
Always ask: "How could this metric be gamed in a way that hurts the business?"
Sanity check and lookout for trade-offs: A flawed KPI tree isn't just useless - it's actively destructive. It creates false confidence, rewards the wrong behaviors and blinds you to what's really happening with your business.
What can I do today if my team doesn’t have one?
Open a doc and write down your North Star metric.
List the 2-3 metrics that directly drive it.
Book 30 minutes with a colleague to sanity-check your thinking.
Schedule a “KPI Tree Workshop” with key stakeholders:
15min: Align on North Star metric
15min: Identify supporting metrics
20min: Map driver metrics for each branch
10min: Assign initial owners and set next steps
Don't overthink it. An imperfect KPI tree that gets used is infinitely better than a perfect one that sits in a forgotten doc.
What to conclude from all of this?
Let's cut through the fancy talk: a KPI tree isn't about mathematical perfection. It's about:
Creating clarity where confusion reigns
Everyone understands exactly what matters to the business.
No more arguing about priorities based on opinions alone.
A shared language for discussing impact that transcends roles and departments.
Connecting everyday work to actual outcomes
Engineers see how fixing bugs feeds revenue.
Designers understand how reducing friction drives conversion.
Marketers know which acquisition channels actually pay off.
Revealing the truth when things aren't working
When you ship features but metrics don't move, the tree shows you why.
No hiding behind vanity metrics or activity-based success.
It forces the hard conversations that actually lead to improvement.
The next time you're debating priorities or wondering why all your hard work isn't moving the needle, your KPI tree will be there - not as a theoretical exercise, but as an honest map back to what matters.
Build it. Use it. Refine it. And watch as your team's endless activity finally transforms into actual impact.
Cheers from your companion along your product crafting journey :) make sure to subscribe to stay updated with the latest ✨ I post every Monday/Tuesday - so make sure to drop your email to receive the latest.