Sales Cycle = Capacity

Your factory consists of four assembly lines. Each one has a hopper that feeds parts at a rate of 4 per hour into a four-stage process. Each stage takes 15 minutes. At the end of the line, completed widgets emerge, 4 per hour per assembly line = 16 widgets per hour.

You focus relentlessly on production efficiency until each assembly stage can be completed in 10 minutes. Now your factory produces ... 16 widgets per hour.

Congratulations! Your efforts to improve production efficiency have resulted in a less efficient factory. The assembly lines now operate at 10/15 = 66% capacity.

What has changed is that each assembly line now supports a hopper rate of 6 parts per hour. That yields an output of 6 widgets per hour per line, restoring your production capacity to 100%.

Alternatively you can mothball one of the lines to save costs, operating the remaining three at ~ 89% capacity to produce 16 widgets per hour.

In sales, the hoppers are deal/lead generation. Each assembly line is a sales rep. Assembly line stages are sales stages. If you shorten your sales cycle and do nothing else, you reduce your sales efficiency. Just like the factory, shortening sales cycles increases the capacity of sales to process deals.

Shorter sales cycles require one or both of the following additional things to be effective:

1. Increase deal generation rate to sell more.

2. Reduce staffing to save costs.

Why do people think that shortening sales cycles will increase sales? 

1. A shorter sales cycle may de-risk deals, leading to increased win rates.

2. Shortening the sales cycle pulls deals that would’ve closed next quarter into this quarter. That creates a one-time bump in sales—but it’s just timing, not sustained growth. 

De-risking and closing deals sooner are good! But it's important to keep in mind that a shorter sales cycle does not by itself increase sales, it increases sales capacity. To sell more, you need to increase your deal generation rate (without affecting deal quality), win rate, or deal sizes.