It’s important to understand the difference between speed and velocity in business.
In physics, velocity and speed are different things. Speed refers to how fast an object is moving; the rate at which an object covers distance. Velocity refers to the rate and direction at which an object changes its position.
As an example, consider running around an oval track quickly. You might cover a large distance but you don’t really get anywhere. You’re traveling at a high speed but zero velocity. On the other hand, if you’re driving fast on a straight road, your velocity might be 60 mph westward.
In business we usually focus on speed when we should focus on velocity instead.
The Silicon Valley mantra of “fail fast, fail often” exhorts startups to take risks and pivot quickly when things don’t work out. However, fail fast encourages development teams to release features which may never get used or don’t have the highest value to customers. They’re doing things quickly (speed) but not making much progress (velocity).
Furthermore, traditional business advice preaches reducing time-to-market (the length of time from a product being conceived until it’s for sale) and extols the first mover advantage. However, as renewable subscriptions become the defacto business model, the initial transaction is typically less important than follow-on ones. It’s better to measure how long it takes customers to get value out of your product/service. The longer it takes to receive value from a product, the less likely a customer will renew. Time-to value is a measure of velocity, not speed.
Organizational KPIs are a visible way that businesses fall into the trap of focusing on speed vs velocity. Most organizations measure activities and outputs (things an organization gets done) rather than outcomes and impacts (results or benefits which happen as a consequence). As a result, the emphasis is on speeding up activities to produce outputs more quickly with little regard to whether these are the right activities. Doing the wrong work more quickly is not a recipe for success. With a focus on speed rather than velocity, businesses become more efficient but not necessarily more effective.
Most people only think in one dimension – speed. They lock into a target and try to accomplish it as quickly as possible. In my experience, these speed demons will be passed by people who consider velocity and think in multiple dimensions. This is the business version of the The Hare & the Tortoise.
One way to advance your career to recognize speed vs velocity in business.