Case Study: Viewing Data From A Leadership Perspective With PlanGrid's Ralph Gootee

The former CTO of PlanGrid (acquired by Autodesk for $900M) has a lot to say on leadership and data.

May 11, 2020

The Problem - Creating An Understandable, Company-Wide Set Of Metrics
Within a startup, individual teams may have their own metrics that drive their goals. Yet, in the absence of company-wide metrics that can serve as an organizational “North Star”, it will be difficult to figure out how group efforts impact the core business.
Action Item: Leaders within the startup should proactively identify the key performance indicators of the company, and engage with employees to help shape them.
The Solution - Developing A Collaborative, Focused, And Iterative Process For Establishing Leadership Metrics
Ralph understood the disconnect between PlanGrid’s R&D efforts and the bottom line of the company was a result of the absence of company-wide metrics. By initially taking a narrow, top-down approach, he and other executives were able to work with employees to identify, develop, and iterate to arrive at a key set of metrics.
Action Item: Leaders should identify overarching leading and lagging indicators for the company to observe closely. In addition, executives must empower their teams to seek out nuanced information to refine the metrics even further.
The Takeaway - Giving Your Teams Ownership Of The Metrics To Internalize The “Why” Behind Them
The real power behind the company-wide metrics isn’t just having a clear “North Star” for the startup to follow. These metrics help employees and teams focus on what matters, and truly take ownership to make their part of the business better through their respective responsibilities. Ralph’s approach to leadership on data gave his team the authority they needed to better tailor their efforts to improving the PlanGrid’s core businesses.
Action Item: Startup executives need to be focused on not only producing these metrics but also getting their teams to take ownership and dig deeper into what data matters. If the data is causing the teams to ask more questions, they are on the right path.

Founder File:

SaaS Leadership Metrics Starter Pack by Ralph Gootee

Ralph Gootee was co-founder and CTO of PlanGrid, which was funded by YC in 2012 and acquired by Autodesk in 2018 for $900m. He was responsible for the technical direction, as well as building and leading the engineering, product, and design teams over his 8-year tenure. Prior to PlanGrid, Gootee worked for Pixar and is credited in Cars, Toy Story, and Brave. He also spent time working on ballistic missile defense for Johns Hopkins University where he earned his Masters in Mathematics.

Gootee spends his free time learning new programming languages, drawing, rock climbing, and spending time with his son and wife/business partner, Tracy Young.

Ralph Gootee, cofounder and CTO of PlanGrid.

The Problem: Creating An Understandable, Company-Wide Set Of Metrics

Frederick Daso: In the early stages of PlanGrid, what was the primary problem in establishing a leadership perspective on PlanGrid's application of data as its CTO?

Ralph Gootee: The primary problem of early-stage (less than 200 people) metrics-based leadership was developing a set of shared metrics that the entire company could easily understand. Every team, every silo, had a stack of key performance indicators (KPIs) to reference, but the KPIs did not tie back to the core of the business. We measured our business's revenue in ARR, and while sales could impact that, our challenge was finding a connection between our R&D effort and ARR.

Daso: Describe the nature of the problem. What are the critical constraints?

Gootee: After fully tooling the product with a plethora of toolkits and touchpoints, we asked our data science team to measure the impact of a new product release on ARR. One month later, we received their response- "it was effectively as challenging as trying to measure the impact of one piece legislation on US GDP."

Daso: What was your initial thought process in solving the problem?

Gootee: Initially, we attempted to tool every part of the product with analytics to try to make sense of usage. This was not nearly as helpful as we expected. While we had successfully captured many touches and mouse clicks, it was still a vast leap connecting the impact to the business.

We eventually gave up on trying to be perfect with our answer, and instead found well-established measurements that showed the health of the business from different perspectives. These leading and lagging indicators helped us understand the impact we were having on our customers, both the good and the bad. These same indicators helped us tie together every part of the company, along the way, helping our team understand our goals and the impacts we were having.

“…our challenge was finding a connection between our R&D effort and ARR.”

The Solution: Developing A Collaborative, Focused, And Iterative Process For Establishing Leadership Metrics

Daso: How did you evaluate your initial hypotheses before trying to implement them?

Gootee: When establishing leadership metrics, we started small and from the top. Our CEO and executive team set a few simple guiding posts: annual recurring revenue (ARR), number of customers, weekly active usage, and net promoter score. We measured these items consistently and took feedback from the team as we went. Through this feedback, we learned how better to explain the reasoning behind the metrics and iterated. Eventually, teams rolled out their metrics that followed suit.

Daso: When you were working to implement them, what else did you discover that either confirmed you were on the right track or opened your eyes up to a new facet of the problem?

Gootee: In regards to company metrics - the direction in which your numbers go (up or down) must hold considerable weight in decision making. There needs to be some reaction to the data. If you end up looking at the same numbers week over week, ensure that they're meaningful. The data should inspire questions that help the team understand the business better.

On some of our projects, the engineers would be glued to the dashboard and would cheer as users engaged with new products. Other times, dashboards would become stale and easily ignored. This would be an opportunity to iterate.

Daso: When did you realize that you arrived at a suitable solution?

Gootee: When teams started using the company's core metrics to make decisions and developed their relevant team-level metrics. For example: If the company metrics were "Number of customers," then team A's metrics might be "Number of customers using product line A." This assumes that you have teams aligned around product lines. However, as you slice and dice your organization, there is some way to line it up against customer usage.

“The data should inspire questions that help the team understand the business better.”

The Takeaway: Giving Your Teams Ownership Of The Metrics To Internalize The “Why” Behind Them

Daso: Did that solution come with its caveats or tradeoffs? If so, what are they?

Gootee: We never found a perfect solution. It was always something we iterated on with the help of our entire team- both managers and individual contributors. We learned that it was helpful for the executives to guide the metrics, but the real power came from teams feeling ownership and understanding the "why."

Daso: What is your general advice for founders on how to face the challenges related to developing a proper approach to leveraging the data that matters in the early stages of their company?

Gootee: Start small and simple. Find 1-4 metrics that are important to your business, easily measurable, and make sense to your team. Review the measurements with a daily routine and make adjustments as needed.

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