For those of you with a background in Lean, TAKT Time is a familiar concept for manufacturing, but what’s the application to sales and marketing?
TAKT actually comes from the German word, Taktzeit, which refers to the cycle time, beat or rhythm. It’s a powerful concept for Lean manufacturing. We want the line to run as efficiently as possible in fulfilling customer demand. Slow down’s, back ups, line starts and stops are all problems. They create inefficiencies and costs in the manufacturing process, as well as adversely impacting the ability to fulfill customer demand.
TAKT time is an important concept in sales and marketing–though we can’t be literal in the application of TAKT time. There is a certain “rhythm” to sales and how sales professionals spend their time.
Sales Cycle Time:
There is a certain rhythm to deal flow, one of the key metrics that serves as an indicator to this rhythm is sales cycle time. Sometimes we express this as flow or velocity. This is the time it takes to execute the sales/buying process, for example, the time it takes from qualifying to closing. In a perfect world, we would like to see smooth flow or progress through the sale/buying process. Deals progress smoothly from qualifying to discovery to proposal and finally closing and implementation. Realistically, things don’t progress like that. They may tend to move in fits and starts. Or they just get stalled. They languish in one stage forever.
Too often, sales people seem unconscious of this. On the surface, their pipelines look healthy. There are a sufficient number of deals in the pipeline to make their number–but they’re not making it. Nothing’s coming out the end of the pipeline–or it may be a trickle.
It’s critical for us to manage the sales cycle time as much as possible. If deals are getting stuck, something has happened. It could be something the customer is doing–their urgency may have diminished, they are having trouble managing their own buying process and what do to. This is a “red flag” for sales people. We need to understand and pay attention to it, we need to help the customer address it. We need to do everything possible to help the customer move forward in the process. The longer it sits, the more likely it is no longer a real deal and our pipelines start losing integrity.
Deals can get stalled by lack of attention from sales people. I’m amazed, but too often sales people just don’t follow-up. They’ve spent a lot of time getting a deal to a certain point, then they get distracted and forget to follow-up, slowing the customer down. Whatever the reason deals get stalled, it’s like WIP in manufacturing (Work In Process). WIP generally indicates a flow/effectiveness problem and creates cost. WIP in the sales funnel creates real cost and opportunity cost–lost revenue. We want to eliminate as much as possible.
There’s a different perspective of sales cycle time that is really important. In a manufacturing line, we try to meet increases in customer demand by reducing the TAKT time. In sales we have a similar opportunity. We need to continually look at our sales cycle identifying area where we can compress the sales cycle time to improve our capacity to pursue more opportunities and grow the business. There are a lot of things that we do that can reduce sales cycle time. In our own company, we found we were investing a lot of time in preparing proposals. After examining that work, we decided we could develop templates, libraries of support materials and estimating tools. These reduced the time it takes from several days to less than a day—a significant reduction in sales cycle time. We’ve looked at each activity in the sales/buying process determining ways we can reduce sales cycle time and increase our capacity to grow the business.
Sales cycle time is an important TAKT time concept. It’s easy to monitor and track sales cycle time, as well as the time spent in each stage of the sales cycle. In looking at sales cycle time, we need to make sure there is good flow/velocity in the pipeline and that we are continually seeking opportunities to compress the cycle–in each deal and overall.
Our Daily/Weekly Agendas, Finding The Rhythm:
We get more done when we have structure to how we spend our time each day and week. When we are working at our peak, we set times to respond to emails, for certain meetings, for prospecting, for doing “paperwork,” for learning something new, for other things. During those times, we focus on a particular set of tasks, complete them, them move on to the next. High performers even block time for “unanticipated events.”
Too often, however, we fail to do this. We tend to be react oriented and interrupt driven. An email comes in, we jump on it, working until interrupted by a text message, then we focus on that until a phone call interrupts us, then we focus on that, but someone walks into our office and we move our attention to that.
At then end of the day, we find we’ve been very busy, but we haven’t accomplished a whole lot. We have a lot of partially completed things that never seem to get off our plates, because more keeps coming in.
High performers recognize there is a rhythm to getting things done during the week–in spite of the interruptions. They protect their time viciously. They block their time, focus on the task at hand, resist the temptation to multitask, resist interruptions–but blocking time to accommodate the unanticipated.
High performers tend to manage TAKT time in several ways–blocking time for certain activities each day and week. Alternatively, they identify critical activities and set goals for achieving those activities.
The Real Secrets Of Sales TAKT Time:
There are some misunderstandings of TAKT time in sales that drive dysfunctional metrics and behaviors. For example, arbitrary goals of “100 phone calls a day,” or “average call times of X minutes,” or “you have to have Y customer meetings a week.” Too often these are developed arbitrarily and become ends in themselves.
TAKT time is focused on achieving desired outcomes. It is meaningless–even destructive when decoupled from the desired outcomes. For example, in manufacturing, the TAKT time is established to meet a certain customer demand. We establish the overall manufacturing time and time in each step based on customer demand. As customer demand increases, we look at how we can decrease TAKT time to continue to meet the customer demand. But what’s important to understand is that the outcome–customer demand is what drives TAKT time. As the outcome–in this case customer demand varies, the processes and TAKT time are adjusted to meet that demand.
A manufacturing manager would never seek to decrease TAKT time, unless they expected a significant increase in customer demand. Decreasing TAKT time would just create inventory–which is cost. They would never seek to improve the time in just one part of the process (assuming it was performing well). Doing this could create problems in the other parts of the line or create WIP (Work In Process)–again this is waste.
We lose sight of this in many of our sales activity metrics. The goal becomes the 100 phone calls a day–not the outcome a phone call creates. Likewise with many of the other activity metrics. We have to remember these activities are focused on producing a certain outcome. Perhaps, in this case customer demand is orders or revenue. The moment we lose sight of the outcomes those activities are intended to produce. Just like in manufacturing, these misguided activities can create waste and error. The person who goes through the motions of achieving the 100 daily phone calls, but misses in identifying critical opportunities. Or the person that wastes customer time in poorly planned meetings, but achieves her weekly meeting goal.
Activities and activity metrics cannot be arbitrary, they must be tied directly to desired outcomes. We develop the TAKT time and process based on the outcomes that are desired, not the reverse.
The second aspect of TAKT time is closely related to my last post, How We Put It Together. As we design how we spend our time, we have to be looking at the “whole,” how everything we do moves in sync–at the right beat. If any part is out of sync, it impacts others. So, for example, if we are getting too few leads, then our pipelines start looking bad. In the manufacturing line, if one station is out of sync, if it isn’t moving with the same beat as the rest of the line, then that station (in sale/marketing it may be a set of tasks or activities) creates problems in the line and waste.
There is a rhythm or cadence to how we work, how sales and marketing work together, how we go after deals, how we mange our time, how we produce results. Is marketing creating the visibility and awareness, is the right demand being generated, are we identifying, qualifying, and closing the deals that enable us to execute the company strategy. All work together in a rhythm that reinforces each other and enables us to achieve our goals. If the rhythm is lost we lose opportunity or we are inefficient. This becomes the TAKT time for the organization.
- Do you have your sales cycle times under control?
- Do you have the right flow through your pipelines?
- Do you have a method to understand stalled deals and address them?
- Do you structure your activities for each week and stick to the structure?
- Do you minimize interrupt driven behaviors?
- Have you tied all your activity metrics to the desired outcomes?
Make sure you look at the other posts on Lean Sales And Marketing.