Time-to-Market (T2M) is perhaps the most popular measure companies use to boost product development performance. T2M’s roots are in single-product thinking, where the focus is on developing one product at a time. It doesn’t focus on creating or managing the new offering but only on developing it.
Research showed that T2M correlates with two highly desirable outcomes: stronger cash flow and better market share. This fact has given T2M a boost as the dominant key performance indicator in product development. The beauty is in its simplicity. If you develop products faster, you’ll be more successful.
That research dates back three decades when diffusion of T2M into practice was barely noticeable. The problem today is that everyone is doing product development faster. Every company has improved its practices and methods with an eye on T2M. As a result, the advantage realized from development speed isn’t as straightforward as it once was.
Product Line Outcomes
Product line velocity (PLV) is different. In product line systems thinking, the velocity is the change in a product line’s outcomes toward its objectives. It’s the speed of the product line’s flow relative to objectives. And for product lines, the objectives always reflect a combination of customer satisfaction, cash flow, and competitive positioning.
Notice the big difference.
T2M doesn’t cause managers to concern themselves with anything but doing development work faster, one project at a time. It then leads managers to hope for improvements in customer satisfaction, cash flow, and competitive positioning.
PLV focuses on the entire product line and includes creating and developing potential products and managing them once launched. PLV also accounts for each project’s impact on the others during development and in the market. These impacts include gaining leverage in development and production, plus realizing synergies across products once they’re in the market. The product line focus is bigger and more encompassing than the single product focus.
Teams using PLV don’t hope for outcomes as they do with T2M. Instead, the outcomes are a team’s primary focus.
You’ll see that T2M is project management-oriented. So much so that the focus creates an environment that divides project management from other functions, other roles, and other concerns – particularly those related to strategy and markets. The project team says, “leave us alone and allow us to do our work and make needed judgments so we can finish the project faster. ” In reply, everyone else, including leadership, says, “OK, that’s easier for all of us. Get going and keep your nose to the project grindstone.”
Things differ for P-L-V. It’s not just project management-oriented; it also drives product management and strategy execution. Improving a product line velocity demands figuring out the best product set to create, develop, and manage. It’s multi-product, not single product oriented.
Improving the P-L-V causes managers to orchestrate all projects and products from before development and through in-market management. It’s the impact of the whole set that matters.
Figure 1: A T2M focus that drives faster one-off product development is great until the accumulated actions and decisions push the product line in a poor direction. Today, companies are finding themselves at or beyond the divergence of T2M and PLV making a continued push on project speed counterproductive.
The relation between T2M and PLV is interesting. For many years the simple message to go faster enabled notable advancements in project and portfolio management. And those speed advancements contributed notably to market share and profitability, a reflection of PLV. See Figure 1.
But the problem is that going faster and faster eventually yields diminishing returns. And going too fast can become an opposing force. That’s because organizations and markets can only absorb so much, especially when competitors are also pushing on T2M.
A major T2M shortcoming is that it doesn’t help drive smart strategy moves or pivots. Focusing only on T2M can be counterproductive. Most important when carrying out strategy moves and pivots is whether the entire line is moving in the best direction with the best timing. If the direction is wrong, the strategic move will be slow or late.
Unfortunately, the rush to speed up a project’s delivery can create momentum away from desired outcomes.
Managers should be aware of two important characteristics of a product line velocity. The first is that PLV is not just a measurement of time as it is with T2M. It’s also about the magnitude and direction of the flow. And the second characteristic is that all measures related to PLV must reflect the entire product line, not just one product or project like it is for T2M.
All companies can use this unique measure because every product line system and their products push toward three common directions. The movement in the desired direction (toward the objectives) is the product line’s flow, and the speed of the flow toward the objectives is the PLV.
To calculate a PLV, teams must measure and forecast product line outcomes related to the three objectives. This work results in actual and predicted measures that can be placed on a 3-D plot. The three directions or axes will reflect the strategy’s objectives for the product line.
Why the focus on Product Lines, not individual products, a business unit or the corporation?
Results or outcomes from a product line can be much more than from the sum of products managed independently. Product lines offer greater gains from scalable leverage and positioning synergy. And such gains accrue from actions and decisions that cut across products, market segments, and technologies.
Companies need a deliberate focus on their product lines to orchestrate a coherent and intelligent approach that realizes leverage and synergy. PLV is the metric that sets that focus.
The first direction is toward Increasing Customer Satisfaction.
The second is the movement toward Improved Cash Flow.
And the third direction is the strengthening or weakening of the line’s position versus competitive alternatives.
Know Where You’re Going
Product line teams wishing to improve their line’s velocity must spell out their product line strategy and objectives. You have to know where you’re going if you want to measure a velocity.
Put on a systems thinking hat to avoid getting lost in the obscure nature of strategies and objectives. Every product line is a system with moving parts and shifting forces, and the outcome flow stretches over time.
Product Line System Flow
Teams boost their product line’s flow by creating, shaping, renewing, and redirecting system parts and forces. Fortunately, a fundamental systems management principle becomes very helpful in this job. In systems, only a small number of parts and forces determine the majority of the output.
For product lines, a small set of the parts and forces will determine the performance of the entire line. This principle means that a good strategy will focus intensely on the parts and forces that comprise the dominant small set. And once teams create the focus, strategy execution is the push on these parts to produce the desired outcomes.
Most successful product lines rely on three parts and associated forces: Platform-levers, Attribute Positioning, and Chain-link Synergy.
The Systems Strategy
A product line strategy is a deliberate organizational focus on the handful of parts and forces which have the most significant influence over the system. Superb strategy execution then demands coordinated actions related to these critical parts and forces. Combining an intelligent strategy with excellent execution will drive a faster and improved PLV.
The main mechanism for improving a product line’s velocity and staying on track with a strategy is a continuous practice called Responsive Roadmapping. This is a modern practice designed specifically for managing an entire product line as a system. It goes far beyond traditional product roadmapping that focuses on project timelines. Instead, it zeros in on creating and redirecting product line systems parts and forces as meaningful strategy moves. This includes a broad range of actions, including incremental cost-cutting activities and introducing new offerings plus major transformations and pivots.
Responsive Roadmapping focuses on creating and redirecting product line systems parts and forces as meaningful strategy moves.
Ramping up a product line’s velocity requires product line managers and other contributors to learn product lines as systems, product line strategy, and responsive roadmapping. These are fundamental tools and approaches. Then the job switches to deconstruct the existing product line as a system. It’s to pull apart the line’s components and parts and rationalize how these parts and forces affect the whole.
Making The Move
The move beyond T2M and the ramp-up of PLV is a big but doable job. The question for most managers is not if they’ll embrace the notable shift. The question is when and how you’ll make the shift.
Please take a moment and reflect on making this shift in your company, then allow me to ask one question.
Is your company ready?
Want to learn more about product line velocity – how to set it up, how to measure it, how to communicate and embed it into practice? Please contact us.