There’s a saying in business that “what gets measured, gets managed.” But in the complex world of modern software systems, choosing what to measure can be as crucial as the measurement itself. Enter the concept of Technical North Star metrics – not just another KPI, but a fundamental compass that guides technical decisions and shapes organizational behavior.

The Power of a Single Number

When I first encountered the concept of a Technical North Star metric at a previous organization, I was skeptical. How could one number capture the complexity of our technical systems? But over time, I’ve come to appreciate the elegant simplicity it brings to decision-making and incident management.

The most effective Technical North Star metrics share three key characteristics: they’re ubiquitous throughout the organization, they directly correlate with business success, and perhaps most importantly, they’re actionable at every level of the technical organization.

Consider Netflix’s “Total Watch Time” or Facebook’s “Daily Active Users.” These aren’t just vanity metrics – they’re deeply woven into the technical fabric of these organizations. Every engineer, product manager, and executive speaks this common language, creating a shared understanding of success and failure.

From Metric to Currency

One of the most enlightening perspectives I’ve encountered came from a manager who described our Technical North Star metric as a “currency.” This analogy perfectly captures how these metrics function within an organization.

At Agoda, for instance, “Bookings” serves as this universal currency. While I can’t share specific numbers, what’s fascinating is how this metric has become part of the engineering team’s DNA. Ask any engineer about current booking rates, and they’ll know the number (though they won’t share it!).

This currency analogy extends beautifully to incident management. When an incident occurs, we can literally “count the cost” in terms of lost bookings. It’s not abstract – it’s concrete, measurable, and immediately understood throughout the organization.

The Art of Measurement

But how do we actually measure these metrics in a meaningful way? The approach needs to be both sophisticated enough to be accurate and simple enough to be actionable.

At Agoda, we’ve developed an elegant solution for measuring booking impact during incidents. We look at four-week averages for specific time windows. For instance, if the 10:00-10:10 AM window typically sees 50 bookings (a hypothetical number), any significant deviation from this baseline triggers investigation. When services are restored and the trend returns to normal, we can calculate the “cost” of the incident in terms of lost bookings.

This approach is brilliant in its simplicity. It accounts for natural variations in booking patterns while providing clear signals when something’s amiss. The four-week average smooths out daily fluctuations while remaining responsive enough to reflect recent trends.

Beyond Incidents: Driving Technical Excellence

The real power of a Technical North Star metric extends far beyond incident management. It shapes architectural decisions, influences feature prioritization, and drives technical innovation.

When every technical decision can be evaluated against its potential impact on the North Star metric, it creates clarity in decision-making. Should we invest in that new caching layer? Well, how will it affect bookings? Is this new feature worth the additional complexity? Let’s AB Test it on bookings.

You can look at the incrementality of these metrics to measure a B variants success which generally translates to direct bottom line value. For example, if we see a B variant is up on 200 Bookings per Day, this language translates to bottom line impact that’s easy for any engineer to understand. Connecting you day to day work to impact is very important for motivation of staff.

The Human Element

Perhaps the most underappreciated aspect of Technical North Star metrics is their impact on organizational behavior. When everyone from junior engineers to senior architects speaks the same language and measures success by the same yardstick, it creates alignment that no amount of process or documentation can achieve.

This shared understanding breaks down silos between teams. When a front-end engineer and a database administrator can discuss the impact of their work in terms of the same metric, it creates a foundation for meaningful collaboration.

Looking Forward

As our systems grow more complex and our organizations more distributed, the importance of having a clear Technical North Star only increases. The metric must evolve as our products and markets evolve. What worked yesterday might not work tomorrow.

The key is to maintain the balance between stability and adaptability. Your Technical North Star should be stable enough to guide long-term decisions but flexible enough to remain relevant as your business evolves.

The next time you’re evaluating your organization’s technical metrics, ask yourself: Do we have a true Technical North Star? Does it drive behavior at all levels of the organization? Is it serving as a currency for technical decision-making? If not, it might be time to look up and reorient your technical compass.

Remember, the best Technical North Star isn’t just a metric – it’s a shared language that aligns technical excellence with business success. And in today’s complex technical landscape, that alignment is more valuable than ever.