Time-To-Market Matters – But Time-To-Profit Is The Real Objective
Accelerating the time it takes to identify and transform a great idea into a successful new product should be on top of your list to improve your competitiveness. Given the hyper competitive nature of today’s marketing landscape, time-to-market is essential in achieving your desired market share. In his book Fast Cycle Time, Christopher Meyer states the importance of fast cycle times with his Rule Number One:
“The competitor who consistently, reliably, and profitably provides the greatest value to the customer first, wins.” And “there are no other rules.”
Which brings me to a very important point: While-time-to-market is important, time-to-profit is the real objective. If the objective is to just get a product launched, we tend to cut corners in hopes to shorten our cycle time. This often leads to unanticipated integration problems and quality problems.
It conjures up one of Murphy’s Law: “There is never enough time to do it right the first time, but there is always enough time to do it over.” Think about the waste in time and resources it takes to do things over again … it’s maddening!
Emphasizing just “time-to-market” can also lead to product development portfolio of “me-too” safe bets. If the development team is measured solely on time to market performance, it will opt to focus on safe bets to meet their performance objectives. So while the time-to-market performance certainly will improve, your ability to innovate and create bold new products may suffer, as well your ability to compete and win in the future.
It’s about shortening the overall business cycle to create and deliver value to the customer
The real objective we want to achieve is to shorten the overall business cycle which begins with the identification of customer’s need (an important job to be done), and concludes with receipt of payment for the product shipped.
Creating and consistently delivering customer value is a team sport. Every function, person, process and activity in the organization should be focused on creating customer value. If an activity is not creating value for the customer – then it’s a form of waste. Meyer’s defines the goal and objective of fast cycle time as:
“…. the ongoing ability to identify, satisfy, and be paid for meeting customer needs faster than anyone else.”
From this definition it is clear that fast cycle times involves more than just speeding development time to market launch. The development cycle time of course is a critical path, but what good does it to us if we launch products nobody wants? The ultimate form of waste – in both time and resources.
Improving cycle time performance requires a total system perspective
We need to focus our attention on understanding how the markets, strategy, and organization operate as a system of interdependent structures rather than as a collection of independent elements. Achieving fast cycle times depends more on managing the connections between the involved functional disciplines than it does on increasing the capability of individual functions.
Fast cycle time improvements is a learning process. We need to improve our ability to learn and change quickly as a competitive advantage. Here’s what Myers has to say about the importance of learning faster in regards to competitive advantage:
“A sustainable FCT [fast cycle time] capability can be achieved only by learning faster, not by working faster. If one only doubles the speed of the current work process, the only guaranteed outcome is that there will be twice as many mistakes in the same time. FCT requires that one increase the rate of learning particularly on those processes that deliver value to revenue-paying customers.”
Rapid leaning and agility as a competitive advantage
Perhaps “rapid learning” and agility is the only true sustainable competitive advantage we can leverage to compete successfully in the ever changing market landscape. And we need to learn form a system and organizational perspective, not just from the engineering and operations perspective.
An organization is more than a collection of engineering, marketing and operations experts. It needs to be an integrated set of processes that operate as a value delivery system for the benefit of the end customers.
Time to market is important and is a core element of cycle time performance. But caveat emptor: if what we bring to market doesn’t deliver value, it’s a waste of time and resources. And it’s the “revenue-paying” customer who defines value – no one else!
Here’s to speeding up the time it takes to create and deliver value to the market!