The One Metric That Matters (or OMTM) is the company level metric that should be used by all company workers in their daily work. Every task, every activity has to contribute to this number. It is not permanent, it can change every quarter of the year if needed.
The OMTM concept was first mentioned in 2013 in the Lean Analytics Book. What was described there was that when building a company people tend to invent far too many metrics, and the amount of the metrics only distracts them from growing the company.
What are the good examples of One Metric That Matters?
I will provide three examples in each there will be first OMTM and second that is more likely to replace the first after a while.
Imagine you are running a website, that posts articles (just like this one), and you are making money on ads. What are good OMTM for you?
- A number of monthly page views (because the more views you get, the more ads you display).
- A number of returning users (because the more users return, the less you have to pay to acquire new to make it even).
Let’s say you are running an eCommerce website that sells clothing. What should you focus on?
- A number of daily unique users (because the more users visits your site, the higher possibility they will buy anything).
- Conversion – percentage of users who buy to all users (because you figured out that users actually get to website, but for instance abandon process somewhere).
Now imagine that you are running a corporation that offers some products through SaaS. These metrics are worth considering.
- A number of monthly invoices clients (because the more clients you have, the bigger is income).
- The average revenue per client (because it is very hard to get a new client, maybe you should focus on upselling now).
Why you should use One Metric That Matters?
I am going to give you three reasons, why OMTM is the best metric to facilitate company growth.
It is the answer to the most important question company can have. There will always be may questions that will be waiting for an answer, and there will never be enough time to answer them all. That’s the reason why you should focus on the most important one.
Chasing One Metric That Matters forces the whole company to focus on a goal. When this number is clearly defined it is way easier to decide if task or activity contributes to it. If the initiatives don’t make an impact on this number – you should abandon them and instead – you should put more effort into activities that make an impact on the OMTM.
This metric is an answer to the question “what should we do right now?”. This is obvious that today’s goal might not be tomorrow’s goal. Whatever your current OMTM is, it can be changed when needed. With cycles of setting OMTM and doing things to boost that number, you are actually implementing inspection and adaptation into the everyday routine of your workers.
All together – this number is worth considering and I recommend it to anyone who aims to boost company growth.