Beyond KPIs: Why Great Leaders Need a North Star

Most leadership teams know what they want to achieve. They have ambitious goals for growth, profitability, market share, and other business outcomes. However, these are KPI goals, specific outcomes. They don’t  tell leaders where to focus every day. They define success, but they don't tell leaders what needs to improve to achieve it.

At the halfway point of the year, leadership teams naturally begin asking whether they're on track with the goals they set back in January. When the answers aren't clear, the instinct is often to push harder, move faster, or increase accountability. 

There’s this temptation to tell everyone to “play smarter, not harder!” But what does that really even mean?

We’ve been seeing this consistently this year: most often, leaders simply aren't working from the same understanding of what it means to be on track. They don’t know what lever to pull to reach those KPI goals because they don’t have a North Star. 

We define that as a guiding principle that helps teams make aligned decisions. The North Star drives decision making and aligns business units beyond the revenue goal.  

Winning Metrics vs. On-Track Metrics

Revenue growth, profitability, market share, and other business outcomes are important. They tell leaders whether they've achieved what they set out to accomplish.

Where we see leadership teams struggle is assuming those outcomes are enough to keep everyone aligned. By the time those numbers appear on a dashboard, they've already been shaped by months of decisions, conversations, and tradeoffs. The dashboard tells you where you've landed. It doesn't tell you what deserves your attention next. 

It’s not a real strategy, it’s the outcome. 

Leadership teams also need to be clear about the tactics and tradeoffs that will make achieving these KPI goals more likely. Otherwise, people can agree on the destination while making very different decisions about how to get there.

The Role of a North Star

A North Star shifts the conversation from “get these outcomes at whatever cost” to providing a clear pathway on how to get there, regardless of job function. 

Rather than focusing only on where the organization wants to go, it keeps everyone focused on the work that will make the desired outcomes more likely. It becomes the filter leaders use when priorities compete and difficult tradeoffs have to be made.

The reality is, the CEO isn’t always in the room. So how should the leadership team prioritize and collaborate across business units, if their only goal is “increase revenue by 20%”? It’s all too easy for organizations to drift in different directions when each function is optimizing for its own priorities.

Without a shared North Star, this happens naturally. Sales focuses on growth, operations prioritizes efficiency, finance manages cost, and HR focuses on retention. 

None of those priorities are wrong, but they don't always lead to the same decisions, and the lack of collective prioritization can move companies off target. In extreme cases, business units can even act almost as competitors. 

A North Star gives leaders a way to evaluate those competing priorities through the same lens. Instead of every function optimizing for its own goals, the conversation shifts to what will move the organization closer to its desired outcome. Without that shared focus, leadership teams can easily fall into what Incito calls the "tyranny of the urgent," reacting to immediate issues instead of making decisions that support long-term success.

A North Star in Action

McLaren Racing demonstrates this well. Winning more championships was always the desired outcome, but it wasn't what guided everyday decisions.

Instead, the organization aligned around one simple question: Will this improve on-track performance? That became the lens every function used to evaluate priorities, whether they worked in engineering, finance, HR, or operations.

HR leaders thought about what was the personnel gap they needed to close to improve on-track performance. Finance and operations leaders knew speed was their north star, so made shifts in that direction.  

That clarity made tradeoffs easier. Every initiative, regardless of function, was evaluated against the same objective. Rather than competing priorities pulling the organization in different directions, leaders had a shared way to decide what mattered most. That discipline helped create the conditions that ultimately led McLaren back to a Constructors' Championship.

The Leadership Takeaway

Most organizations spend a lot of time defining the outcomes they want to achieve. Far fewer spend the same amount of time defining the work that will get them there. The North Star essentially tells leadership teams - what should I bias towards? When the going gets tough, where should I take risks? 

It keeps leaders focused on what the organization needs to keep improving, giving them a practical way to make decisions long before the results appear on the dashboard.Every decision becomes an opportunity to strengthen the conditions that make future success more likely.

If your executive team is hitting its KPIs but still struggling with alignment, it may be time to look beyond the metrics and ask a different question: What principle is guiding the decisions we're making every day?