Revisiting the Second Metric
The Second Metric has been described as the cost of change. Now I propose an alternative, cycle time. This is especially useful where cost is highly obfuscated. Cycle time is how long it takes to get something done and learn something important. If we could pick only one metric to rule them all perhaps it really should be cycle time.
Keurig Green Mountain Inc. made a fortune with its coffee and hot drink making machines. They thought it would be profitable to expand into cold drinks. So, in September of 2015 they announced their ‘Kold’ soda machine maker for the home kitchen.
What are the cycle times involved in releasing a new product or service like Kold to the market? In an undertaking as large as this one they are frequently measured in years. In fact, it took about six years and hundreds of millions of dollars to get this product to the market. Within a few months they learned something significant, nobody wanted to buy it.
It wasn’t meeting a need, want, or desire. It turns out, soda is fundamentally different from coffee. Go figure.
One of the cycle times we are most interested in shortening is discovering when we are right and when we are wrong about what the market wants. It is why agile software development works unceasingly to get real features being used by real users as quickly as possible. Do they like it? Will they spend their money on it? Why?
Short Cycle Times is the Win
Especially with startups without really deep pockets. But even a large established player like Keurig doesn’t want to waste six years and hundreds of millions of dollars.
I submit there are many ways for Keurig to have shortened the cycle time to discover nobody would buy their ‘Kold’ machines, ways to discover this without spending a fortune. Can you think of any? You probably can’t just ask. I am sure they asked and people said, “That would be great!” The devil, for users, is always in the details. What they actually do is not what they say they will do.
Figure out the difference fast, with short cycle times.