Document updated on 2023/02/23
A North Star Metric (or NSM) is a term used in business to describe a single, high-level metric that a company uses to measure its success in achieving its overall goals. It is called the "North Star" metric because, like the North Star in the sky, it serves as a constant guide and reference point for the organization's overall strategy.
When startup investor Sean Ellis coined the term ‚ North Star metric, he intended it to reduce administration, simplify meetings, and align teams around the singular goal of growth. The term North Star metric‚ drawn from the common name for Polaris, the star that lies directly above the Earth‚ Northern pole‚ mostly rhetorical. The North Star metric is, simply, an exercise in simplifying the overall company strategy into terms all can remember, understand, and apply.
The North Star Metric is usually a quantitative measure that reflects the core value that a company delivers to its customers. It is typically a long-term, outcome-oriented metric that the company believes is critical to achieving its overall mission and vision. For example, a North Star Metric for a social media platform might be the number of daily active users, while a North Star Metric for an e-commerce site might be monthly recurring revenue.
By focusing on the North Star Metric, a company can align its resources and efforts towards achieving its most important goals, while also measuring progress over time. It can also help to prioritize projects and initiatives, as well as provide a common language and vision for the entire organization.
At Corbis, we chose Square Feet Delivered as our NSM. It is calculated from the Gross Floor Area of each project we close in Frank. So everytime we finish and close a project, we increment the counter of our NSM. We reset the counter every year, so we can compare year by year if we are incrementing or not our NSM. You can find the NSM counter in Frank's desktop.
You can read more about NSM clicking here.
We hope this information is helpful. If you have questions or suggestions, please contact P&P at support@frankcollaboration.com