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Half the Driver Tree Is Done. Then Someone Asks: Is That Even a Driver?
Half the driver tree is already done, neatly drawn on the whiteboard. Then someone asks: is that even a driver?
I have seen this often. The team is motivated, the business understanding is there, and still it stalls. Usually because a few topics get addressed too late. Three questions help before the drawing starts.
Where do we start? Many begin with the top KPIs because those already exist. We recommend starting from the most important steering question you currently have: which decision do we want to improve? What does management ask about most often?
How deep do we go? To the level of detail that still helps with a decision or a root cause analysis. Below that, the model only becomes unnecessarily complex. Two hundred income statement lines is too many, and more than two to four levels per additional dimension is too many as well.
What is a real driver? A driver is an input in the model. It is not only measurable but ideally influenceable, and it has a material effect on the key metrics of the business model. Crucially: a metric or an income statement line is not a driver.
Confuse the two and you build yourself a management report in tree form. The whiteboard photo looks good. It does not steer anything.