The Metrics That Matter—And How to Keep Them Honest

Part 2 in a 5 part series on what really matters when turning an org around

This series of posts is aimed at those working at the board level, either directly or as strategic advisors. The 5 part series has the following posts:

1. How Boards Shape Change—and Why Many Get It Wrong Why boards must engage with culture, tone, and systemic design—not just strategy and performance KPIs.
2. The Metrics That Matter—And How to Keep Them Honest (this post) The five key metrics for growing a customer-based organisation (NDR, CAC Payback, LTV/CAC, Product Velocity, Platform Scalability), and how agile systems prevent gaming and misalignment.
3. Governing Change: Risk, Ethics, and Strategic Control Through Agile Practice How boards can use agile principles and cadences to embed risk visibility, ethical oversight, and adaptive governance into daily operations.
4. Aligning People with Purpose: Reducing Turnover and Unlocking Ownership How agility boosts retention, psychological safety, and operational alignment—and how your Enterprise Change Pattern supports this systemically.
5. Purpose, People, Process, Profit: A Strategic Framework for Board-Level Agility This final post brings together the core themes of the series into a practical, board-relevant model. It explores how agility, when understood as a strategic mindset—not a delivery tool—supports clarity of purpose, alignment of people, adaptability of process, and sustainable profit. You’ll see how agile principles can help boards lead with coherence across all dimensions of the organisation, ensuring that vision, culture, and execution remain connected as the business grows.

The Metrics That Matter—And How to Keep Them Honest

“What gets measured gets managed.” Yes. But what gets gamed gets reported—and often hides what matters most.

In every boardroom I’ve sat in, metrics play a central role. They steer investment decisions, performance assessments, and strategic bets. Especially in private equity contexts, where capital is moving fast and exit value is the endgame, the pressure to hit targets is immense.

But here’s what often gets overlooked:

The metrics themselves are only part of the story. The system behind the metrics: the behaviours, incentives, and assumptions, determines whether they reflect reality or fiction.

In this second post in the series, I’ll walk you through five essential metrics that growth-focused, customer-oriented organisations should track at board level. These are the indicators that show real value creation, not just surface-level success.

If you are a coach, or enterprise change agent of some sort, then you would be wise to understand these metrics as the work you do is ultimately going to either help these metrics, hinder them, or have no impact. If it is the last 2, then I expect your tenure will be short-lived.

And I’ll show you how agility, when used correctly, helps ensure those metrics remain grounded in truth, not theatre.

Why Traditional Metrics Are Failing Boards

It’s not that boards aren’t tracking data. It’s that they’re often tracking:

• Outputs instead of outcomes
• Lagging indicators without the feedback mechanisms to explain them
• Vanity metrics that look good in slides but hide systemic risks

What’s worse, some of the most celebrated numbers—like “velocity” or “time to release” are at worst measuring something entirely different than what the board think they are measuring and even if understood are actively gamed inside delivery environments. The system optimises for the metric, not the mission.

Boards must look deeper. And to do that, they need a new relationship with data, one that’s supported by culture, rhythm, and systems of transparency.

Using Metrics to Prioritise Investment and Reduce Waste When interpreted properly, these metrics are more than performance indicators—they’re strategic filters. They help boards and PE advisors decide:

• Where to double down with capital
• Which segments or products are truly sustainable
• Where value is being created or eroded silently

Each metric is a signal of either opportunity or risk.

They also provide early indicators of enterprise value and exit-readiness.

The Five Metrics That Actually Matter

These are the five metrics I believe every board and enterprise coach, should understand, monitor, and challenge, especially in fast-moving or PE-backed organisations.

1. Net Dollar Retention (NDR)

The stickiness and expansion potential of your customer base.

This metric tells you if your customers are growing with you, or quietly walking away.

How to calculate it: NDR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR

Note: MRR stands for Monthly Recurring Revenue, a key indicator of predictable income from your existing customer base.

Why it matters:

High NDR means customers aren’t just staying they’re buying more. It’s a signal of product-market fit, customer satisfaction, and growth efficiency.

Red flag: If you're growing revenue but NDR is flat, you’re leaking value as fast as you're capturing it.

2. CAC Payback Period

How long it takes to earn back what you spent acquiring a customer.

Boards often focus on growth—but overlook how costly that growth is.

How to calculate it: CAC Payback Period = CAC / Gross Margin per Customer per Month

Why it matters:

Short payback periods (<12 months) signal capital-efficient growth. Long ones suggest you're over-relying on burn or external capital to scale.

Agility link: Agile organisations can test go-to-market strategies rapidly, reducing guesswork and shortening payback cycles. The whole point of agility or agile ways of working was to a) increase customer value, b) reduce risk, and c) shorten the CAC payback period.

Understanding that agility is not Scrum and that agility is a whole organisational challenge that is often blocked by middle management’s lack of understanding or ability to grow themselves is directly harming the CAC payback period and reducing LTV. This has to shift if board’s want to create a rapid growth of turn the company around.

3. LTV to CAC Ratio

The lifetime value of a customer divided by the cost to acquire them.

This is the ultimate unit economics checkpoint.

Are you creating value sustainably, or buying customers at a loss?

How to calculate it: LTV = ARPU x Gross Margin % x Average Customer Lifespan (in months) LTV:CAC Ratio = LTV / CAC

Ideal ratio: 3:1 is a healthy target. Below 1:1? You're scaling dysfunction.

Board insight: This metric should be tracked across segments, not just in aggregate.

4. Product Velocity (and its dangers)

How fast value is delivered: but beware: this one is misunderstood and often gamed.

Many execs track story points or feature counts. These are easily manipulated. One team’s “50 points” is another’s “13.”

Velocity is team-relevant metric and cannot be used as a measure of output. This is really important for boards to understand. Measuring velocity is not the right approach.

Better board questions:

• Are we releasing value that customers care about? (outcome not output)
• Is cycle or flow time accelerating outcomes? (output)
• Do we see real flow across teams, or is work bottlenecked? (systemic output)

Agility advantage: When teams work in small, testable increments with fast feedback, you get real visibility, faster flow of outcome-based delivery.

Red Flag: Measuring velocity indicates a lack of understanding of agility and how teams measure output and outcome.

5. Platform Scalability

Can your infrastructure handle growth without exponential cost or complexity?

Boards often overlook this until it’s too late. But fragile architecture will show up in:

• Slower releases
• Rising customer support issues
• Burnout in engineering teams
• Exploding cloud costs

What to ask:

• Is the platform designed for scale?
• Where are the scaling constraints right now?
• Is the number of critical incidents falling with regard to changes in ways of working or increasing?
• What are the levels of technical debt stored in the system?

These types of questions are bordering on the technical, but easy to understand summaries of each question can be created and added to the overall picture of the company in the boardroom pack or at strategic planning sessions.

If you run a tech company, these are metrics you need to get your head around that will either allow you plain sailing or bite you when you least expect it. Getting your head around the big questions means facing risk in realtime.

The Real Role of Metrics

Metrics don’t tell you the whole story. But they can signal where to look.

They’re narrative entry points, not truths in themselves.

Boards must not only understand the headline numbers, but also ask:

• What behaviours are these metrics incentivising?
• How are these numbers being produced?
• Are we measuring output or real customer outcomes?
• How often are these numbers validated with frontline data or feedback?
• What cultural conditions might be skewing the data?
• What’s missing from the picture?

How Agility Helps Keep Metrics Honest

Here’s where the work in enterprise change becomes relevant for boards:

When organisations adopt real agility, not the templated kind, they:

• Build feedback loops that surface what’s real, fast
• Decentralise decision-making, reducing gaming and manipulation
• Create cultural safety, so issues surface early
• Adapt quickly, keeping metrics relevant as the business evolves

Agile operating models have traditional not included the real metrics, risk reduction, or measurements of safety that show or hide problems.

Your role on the board, or as an advisor, is to make sure that leadership teams see through the noise and into the truth and so you can get the right understanding to provide the right guidance.

Additional Metrics to Watch

While the five primary metrics above are essential for strategic decision-making, there are several secondary metrics that provide valuable context, especially when evaluating the effectiveness of enterprise change and agility initiatives.

These secondary metrics are often leading indicators of cultural, operational, or customer-related health. They can be powerful when interpreted alongside the core financials.

1. Churn Rate What it is: The percentage of customers who stop using your product or service over a given time period. Why it matters: High churn indicates unmet customer needs or poor product-market fit. How agility helps: Frequent feedback loops and faster delivery cycles allow teams to respond quickly to customer dissatisfaction. The Product Manager should have their fingers on the pulse on this, and this can be a great metric in the board pack.

2. Customer Health Score What it is: A composite score based on usage patterns, support interactions, and other engagement metrics. Why it matters: It provides an early signal of potential churn or upsell opportunities. How agility helps: Cross-functional visibility and faster iteration allow for proactive customer support and experience improvements.

3. Gross Margin What it is: Revenue minus cost of goods sold (COGS), expressed as a percentage of revenue. Why it matters: Indicates the efficiency of delivering your product or service. How agility helps: Improvements in process, delivery, and technical scalability reduce cost without compromising value.

4. Time to Value (TTV) What it is: How quickly a new customer realises meaningful value from your product or service. Why it matters: Shorter TTV improves retention and customer satisfaction. How agility helps: Lean delivery and outcome-focused teams help identify and deliver the most critical value early.

5. Deployment Frequency What it is: How often your teams push updates, fixes, or features into production. Why it matters: A good proxy for delivery agility and technical health. How agility helps: Agile teams optimise for continuous delivery, reducing risk and increasing responsiveness.

6. Mean Time to Recovery (MTTR) What it is: The average time it takes to restore service after an incident. Why it matters: Indicates operational resilience and maturity. How agility helps: Agile engineering teams prioritise observability, incident response, and fast recovery as part of DevOps practices.

These metrics don’t replace the core five—but they add critical colour to how well your business is operating, how quickly it can adapt, and where risks might be forming beneath the surface. Boards and advisors that integrate these signals into strategic oversight gain a much fuller view of system health.

For Agile and Enterprise Coaches

If you're coaching or supporting an enterprise, here's how to work with these metrics without overstepping your role:

1. Start by asking leadership which of these metrics matter most to them

2. Trace how team behaviours and delivery practices might influence those numbers

3. Use storytelling, retrospectives, or system maps to bridge qualitative insights with quantitative data

4. Focus on alignment: How does this metric connect to the organisation's stated goals?

Avoid falling into the trap of defending agility in abstract terms.

Instead, help leaders see the connection between agile ways of working and hard business results.

What Boards Can Do Differently

If you're on a board or acting as a strategic advisor, consider:

• Asking how metrics are created, not just what they say
• Creating space in governance rhythms to interrogate metrics with curiosity
• Pairing hard data with soft signals, i.e. use narrative, morale, churn, ethics
• Aligning incentives with value creation, not volume or velocity
• Creating a system where feedback, not just performance, is the measure of maturity

Final Thought

The board’s job isn’t just to review the numbers. It’s to ensure those numbers reflect reality.

That means engaging with the system that produces the data. It means creating cultures where truth is safe to share. It means choosing agility not as a delivery method: but as a governance mindset.

That’s what makes metrics matter.

This post was first published here: https://deeperchange.substack.com/p/the-metrics-that-matterand-how-to

Coming Next in the Series:

Post 3: Governing Change: Risk, Ethics, and Strategic Control Through Agile Practice How boards can embed ethical oversight, risk sensing, and adaptive governance directly into how work gets done: without slowing it down.