High growth companies like Airtable, Figma, Notion, or Github all have revenue as a top of mind business milestone.
In fact, out of a sample of 40 growth stage companies, 50% said revenue growth was their #1 north star metric, according to research led by Lenny Rachitsky for Future. For 35%, it’s the share of paid users, followed by user engagement/experience and efficiency metrics.
Without revenue, companies can’t survive, so this is no surprise. Yet behind the scenes, keeping everyone on the same page as the company grows isn’t a straightforward process.
Growing pains: getting goals right
“When you go from one person to three people it’s different. When it’s just you, you know what you are doing and then you have three people and you have to rethink how you are doing everything. But when there are 10 people it’s all going to change again. And when there are 30 people it will change again. Same when you reach 100 people.” – Hiroshi Mikitani, Rakuten CEO, based on an interview with Phil Libin.
As teams grow, it gets harder to rally around key goals
My Droyd co-founder, Brieuc, led Ops at AB Tasty as they grew from 50 to 200+ employees, then went on to advise various Series A-C SaaS companies with their Operations.
On my end, I’ve been working with Aircall for the past few years – crazy growth trajectory – where revenue has always been the north star metric, alongside customer satisfaction.
We both noticed a similar pattern: alignment on key metrics breaks as headcount grows:
- More teams means more silos in processes and tools used to follow metrics.
- Metrics get more complex and their definition shifts, which require ongoing education.
Picture this – you’ve beat your Q1 MRR goal halfway through the quarter because expansion MRR is higher than expected (great) but you’re struggling to meet monthly sales goals because pipeline isn’t there (not so great).
As a CEO or revenue leader, you must tell that story accurately if you don’t want to alienate part of the team and kill their motivation.
Set north star metrics that will stay relevant over the years
At the early stages, everyone probably knows the number by heart. All stakeholders are somewhat involved in all initiatives, and there’s not so much to track anyway.
As you grow, complexity will increase and new departments, teams, initiatives will require focus on new goals. It’ll be a mix of quantitative and qualitative goals, inputs, and outputs.
At this point, resist the pull and don’t get hung up on goals that aren’t lindy. While it’s ok to focus on open rate, number of signups, number of cold calls, or time to merge a pull request in order to improve a certain area of the business, make sure that company-wide goals make sense to all stakeholders.
Clearly distinguish individual, team, and company goals. For the company, choose metrics that will keep on being relevant once your business gets bigger.
A solid combination of clear company values and goals will help individual employees make decisions that align with the direction of the company.
Goals must be consistently communicated
Send frequent goal updates to the team
Some habits will stick to keep everyone on the same page:
- Weekly / Monthly CEO communications (i.e. email) with a focus on metrics.
- A good meeting cadence (i.e. weekly / bi-weekly all hands, specific team gatherings).
- Regular, asynchronous communications informing the team of progress and milestones reached.
Repetition is key
Setting a cadence of how progress is shared creates habits and accountability from everyone. These rituals are also the opportunity to celebrate successes or learn from failures as a group.
Don’t rely on meetings too much
Meetings are ok but do have flaws when it comes to communicating data and goals:
- Different countries, time zones, work schedules mean it’s hard to keep everyone in sync as the company grows. Increasingly true if you’re embracing remote work.
- Too many dashboards in your slides: something weird happens where the more you host the same business meeting, the more gets added to it until nobody cares anymore and you have to cut the content. Use dashboards for analysis, then bring synthetic, easy to digest takes to your meetings.
- Lack of personalization: beyond high level goals, every team won’t need the same granularity on tickets (i.e. support team & SLAs).
Use async communications instead
Emails, Slack posts, Slack feeds… these will stick when done right:
- For granular metrics, make updates opt-in / opt-out: a detailed view of the inbound marketing performance isn’t useful to everyone, but anyone who wants to learn more should have access if needed.
- For high level goals, make updates a mandatory ritual. We’ve found that automatic MRR / ARR in Slack on a daily or weekly basis to be a best practice. The team can rally around it, celebrate when numbers grow, and people can jump in to give more context.
Several companies we’ve interviewed when building Droyd had invested development resources to automate such updates in Slack. We’re building on this best practice of automating metric updates to Slack, and aim to make it easy and accessible to all – for instance through our ChartMogul integration.
Make sure everyone understands company goals
Updates will only work if you’ve got your numbers straight. The team needs some proxy to understand how the company is doing. It should be understandable by all, independently of their role.
As a SaaS company, you can’t go wrong with setting quarterly goals on the following metrics:
- MRR and/or ARR
- Churn and/or Net dollar retention
They’re easy for the team to follow: how much are customers paying us each month? Are we retaining our customers to the best of our ability?
Tools like ChartMogul help you ensure consistent tracking there – refer to this guide for more.
Revenue metrics don’t always paint the full picture, so you’ll want to find a balance. Too much focus on growth can come at the expense of customer satisfaction. Focusing on metrics like NPS/ CSAT or a key product engagement metric will hedge for this.
Documentation and KPI definition
Sometimes, you need to go a step further and take time to document a metric, why it matters and how it’s calculated. A great example of this is Gitlab’s handbook.
Conflicts might arise. When they do, rally around the source of truth to clarify the issues, or edit it to reflect changes in the org.
Clear goals drive cross-functional alignment
A benefit of having clear goals and a cadence to review them is better collaboration between teams.
While engineers might not look at Salesforce reports on a daily basis, and sales might not know about infra costs, everyone should be aware of outlier events:
- A record month
- A pretty bad month on new biz or churn
- Anomalies in support SLAs or number of tickets
As your team grows, it won’t be possible to keep track of all the projects and deals that are happening. It’s definitely possible to keep track of goals at scale when they are properly set. So make sure to invest in the right stack and processes!