Product Line Velocity Definition
Product line velocity is a measure of a product line’s performance. It’s the progress over a defined time-period that a product line makes toward its O K R’s: its objectives and key results.
And the O K R’s for all product lines always relate to three dimensions: Cash Flow, Customer Satisfaction, and Competitiveness.
Notice how this is a step beyond the older “time-to-market” metric. The past use of time-to-market entrusts that the three dimensions improve simply because some projects go faster. To some degree, this will be true. But the time-to-market orientation does not mean each project is the best and that the full set of projects works in unison to boost the whole product line.
Product line management and oversight should work to influence and guide the product line system. And all actions and decisions should strive to push a faster velocity.
Maximizing Product Line Velocity
It’s the product line team’s job to maximize the product line’s velocity. You’ll see a product line’s performance shows as a positive or negative velocity. And you’ll see the product line’s velocity either accelerating or decelerating. Or it may be holding steady. When the velocity is accelerating in a positive direction, it’s a strong indicator of a product line’s great performance. If, on the other hand, it’s accelerating negatively, the velocity reflects dangerously poor performance.
Product Line Velocity Parts
Let’s take a look at the cash flow contributor to get a idea about product line velocity.
A product line’s free cash flow might change from $1.25MUSD to $3.5MUSD over a six-month period. That’s $2.25MUSD over six months. In this case, the Product Line Free Cash Flow Velocity is running at $4.5MUSD per year. Teams then calculate the full product line velocity by combining the Cash Flow Velocity with measures for Customer Satisfaction Velocity and Competitive Positioning Velocity.