Metrics & Review Rhythm
A business that measures everything manages nothing. This module installs the smallest set of numbers that actually predicts your P&L, arranged in a tree, reviewed on a rhythm, with a hard rule about what happens when a number goes red.
A. The KPI Tree
Every metric must ladder up to the North Star from your OPSP (Module 01). If a number doesn't parent into the tree, stop tracking it.
NORTH STAR: Annual gross-margin ₹ (not revenue, margin)
├── SALES: Qualified pipeline value · win rate · avg deal size
├── DELIVERY: On-time delivery % · utilisation % · rework %
├── RETENTION: Net revenue retention · referral rate (M05)
├── CASH: DSO · 13-week net position (M03)
└── LEVERAGE: Revenue per employee · gross margin per employee
RULE: Max 3 child metrics per branch. Each metric has exactly one owner.
B. The 12-Line Weekly Scorecard
The scorecard is the tree's top 10–12 numbers on one sheet, updated before the weekly tactical meeting (cadence stack). Format matters more than tooling: a disciplined spreadsheet beats an abandoned BI platform:
| Metric | Owner | Target | This Week | Trend (13w) | Status |
|---|---|---|---|---|---|
| Qualified pipeline value | Sales head | ≥3× quarter target | 2.4× | ▁▂▂▃▂▂▁ | Yellow |
| On-time delivery % | Ops head | ≥95% | 97% | ▅▅▆▆▆▇▇ | Green |
| DSO (days) | Finance | ≤45 | 58 | ▃▄▄▅▅▆▆ | Red |
1. Owner reports their own number; nobody reports someone else's metric.
2. A red metric gets a diagnosis sentence and an action with a deadline, in the meeting, not after.
3. Trend beats snapshot: 13 weeks of history on every line (see the Execution Grid for the full operating rhythm).
C. Revenue Per Employee (The Leverage Metric)
The single most honest measure of whether your business scales or merely grows. Calculate it properly and track the slope:
FORMULA: Trailing-12-month revenue ÷ full-time equivalents (consistent contractor treatment)
PAIR WITH: Gross margin per employee. Rising RPE on falling margins means you're buying revenue with discounts
READ THE SLOPE: 4–8 quarters of trend, not the snapshot
NEVER: Chase RPE by cutting people. Durable gains come from revenue outgrowing headcount
LEVERS (in order): Pricing & mix → process → automation → delegation → focus
Benchmarks and the full method: Revenue Per Employee: The Operating-Leverage Metric MSMEs Ignore.
D. The 10% Variance Rule
Variance analysis fails when everything gets explained and nothing gets actioned. One rule fixes it:
1. A driver, not a description. "Marketing overspend because CAC on paid social rose 40%", not "costs were higher".
2. A decision: accept, correct, or re-budget. Silence is not one of the options.
3. An owner and a date if the decision was "correct".
Favourable variances get the same treatment: revenue 15% over budget with no explanation is a forecasting problem you'll pay for next quarter.
E. The Review Calendar (Closing the Loop)
Every artifact in this OS has a review slot. If it isn't on this calendar, it will silently rot:
| Rhythm | What Gets Reviewed | Forum |
|---|---|---|
| Weekly | Scorecard · pipeline hygiene · 13-week cash | Weekly tactical (60 min) |
| Monthly | P&L vs budget (10% rule) · compliance dashboard · collections aging | MBR (5-slide deck) |
| Quarterly | OPSP sprint reset · risk register · supplier scorecards · performance scorecards · buffer levels | Strategy sprint (half day) |
| Annually | Policies · insurance cover · tech stack audit · org design · KPI tree itself | Annual planning offsite |
This calendar is the whole OS in one table: systems don't fail at installation, they fail at review. Put the slots in the calendar before you build anything else.
This OS requires an Operator.
You can try to install this yourself, or you can partner with us to deploy it in 90 days.
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