It's basically a measure of DPS multiplied by TDO, with additional weighting to DPS, to give an overall performance figure of the pokemon in question. The weighting towards DPS is because, particularly for raids, time is pretty much always a factor.
If you're short-manning or going for a speed record, then I'd just concern myself with DPS.
DPS^3*TDO is probably more useful for those occasional where time isn't so critical, where you want something to last more than 5 seconds (e.g. to preserve potions/revives), but also do care about your damage output.