Determining which input metrics will measure value creation for customers and drive business growth requires a structured process. Based on our experience at Amazon, we have helped more than 50 companies discover and implement their input metrics. Here is one of the methods we teach them to use:
1) Identify Key Drivers – Start with a critical metric, such as revenue. Then ask: “What factors drive this outcome, and how can they be measured?”
2) Build a Metrics Map – Organize those driving factors into a hierarchical input tree, where each level feeds into the next.
For example, a critical metric like “Customer Retention” might be driven by “Delivery Speed” and “Product Availability,” both of which depend on factors such as warehouse efficiency and supply chain management.
3) Go downward and outward as far as possible – Continue breaking down each factor until you can’t go any farther and reach fundamental, directly measurable actions like “TP 99 page load time.”
This process ensures that companies do not rely on generalized, high-level statements but instead uncover the granular actions that they can take to impact performance.
Identifying the right inputs is an ongoing process.
While selecting a few key input metrics upfront is tempting, it is best to err on the side of quantity. Determining which provide the most signal and which are noise becomes clear by observing how your metrics move and relate to one another over months and years.
Amazon continuously refines its input metrics using structured methods to observe a high quantity of metrics and data points, such as the Weekly Business Review (WBR).
For companies serious about data-driven decision-making, Metrics Mapping provides a disciplined, systematic way of identifying controllable inputs that drive key outputs like revenue and cash flow.
For more info on input metrics, see our course: https://lnkd.in/gCuWZkHZ
