• Follow-up to Abolishment of Time Sheets – Two Months Later

    Posted on March 13th, 2009 by and currently 11 commenting.

    Our Princess of Particulars, Brandy Amidon, is back to report what’s happened in the two months since we abolished time sheets at Brains on Fire.

    One would think our employees went crazy, tore their clothes in mourning, and flew over the cuckoo’s nest when they no longer blocked out their day into 30 min increments and assigned a project number.

    In reality, it took a few weeks for the concept to sink it and we couldn’t be happier. Hey, a paradigm shift doesn’t happen over night, just ask the inventors of the spork. Two months later, the theory is proving itself worth the risk.

    Challenges
    1) We are improving our pricing and estimating process to charge based on value and not labor. This will take time for us all to adjust and stop reverting back to number of estimated hours needed to complete a project.

    2) Ironing out our Key Indicators (predictors of profitability) will take time as well. Right now we are measuring turnaround time, client referrals, client retention, and client happiness via survey. It’s like putting the straight edges of a puzzle together first. Once we figure those out all the other pieces will fall into place.

    Triumphs
    1) We are able to predict the currents month’s net income before the month begins. We can look at our projects estimated percentage complete for the month and say this is where we will land. Instead of waiting till the end of the month, after we’ve grossed everything up and then start writing things off. We were worried about losing control of profitability when we switched off time sheets. Now we have more control and power to see into the future (now I can throw away our eight ball).

    2) We’ve became closer as a team. AE’s aren’t afraid to ask more people to join in on a project if need be. No more fear of going ‘over’ on a job. We are coming together as a team to provide the greatest benefit and exceeding our client’s expectations. I doubt it gets any better than that!

    We’ll check back in a few months to keep you in the loop.

  • http://www.period-three.com Gene Crawford

    I’m extremely curious to hear how you are going about estimating value. I don’t mean that in any sarcastic way at all, i’m truly interested. The hardest part seems to me the differentiation between how much you value a particular piece of a project vs. how much your client values it. How do you find a homogeneous number for both of you without dying a slow death in contract detail overkill?

  • http://www.digitalroom.com/business-cards.html Business Cards Online

    Good evaluation of the current trends, I appreciate you posting this.

  • http://brainsonfire.com Brandy

    Gene,

    Estimating has probably been the biggest change in thought. Not that we have perfected it. We are still trying to let go of the idea that the value of what we do is estimated time X our billable rate.

    I will tell you this. Each project and client are totally different. In what they want and need from us. So when we estimate a project, we try to think about what is the total value we are giving the client, what’s the market trend, and what have we charged in the past. Using all these variables hopefully helps us get closer to what our client believes is the value of our work.

    Really it’s all about making our client happy. If they are wildly happy with our work, they aren’t as concerned about price. And believe it or not, we help provide companies with value that can’t be measured.

    I hope I helped answer your question. I love the discussion!
    Brandy

  • http:/starkravingcalm.com Jonathan Vaught

    “And believe it or not, we help provide companies with value that can’t be measured.”

    That sounds like one of those obvious-in-retrospect concepts for a marketing firm. It’s refreshing to hear. Good on ya!

  • http://www.period-three.com Gene Crawford

    @Brandy – I hear you. Have you had an instance yet where the client asked how you derived at a price and asked to show it in writing or something? I can see how that could be misunderstood to you having pulled the number out of you know where…

  • http://matchstic.com/blog/ Craig Johnson

    Ironing out key indicators is the most fascinating thing to me. I love this thinking. It reminds me of the R.O.W.E. – we implemented that this past year and this seems to be another step in the same direction. I am going to begin discussing this with my team.

    Thanks for always pushing things to the next level not only for yourselves, but for the rest of us as well.

  • http://www.bill4time.com morris tabush

    very interesting concept. as one of the founders of Bill4Time (www.bill4time.com) we do see a small percentage of our customers that only bill flat-fee and contingency, and don’t log their hours.

  • http://www.thebuzzwithkenandliz.blogspot.com/ Elizabeth Walker

    GOOD FOR YOU!!!!!! I refused to use time sheets in my last traditional agency (I was CEO) and now in our small business partnership. We took some courses and got a coach in negotiating and sales skills, and found that our job margins went up, and our fights about billing went AWAY. Also our receivables were in much better shape.

  • Robb Czyzewski

    Great topic and initiative, can’t wait to hear more! A few questions come to mind…

    1) How do you keep tabs on employee capacity? Who can take on more? Who is overworked?

    2) What project management system do you use? Is it task based? Do your project managers schedule time for tasks or just say a designer has a deliverable due on X date?

  • http://brainsonfire.com Brandy

    Great questions Robb!

    Our Traffic Control Goddess, Megan, monitors everyone’s workload. She essentially is our “Project Mgmt System.” AE’s go to Megan first before a proposal is written to gage a realistic timeline for our client. Megan looks at existing client workloads and then judges when and how much to add to a persons plate. We would NEVER want to disappoint a client or break a promise on due dates. So Megan helps to ensure we are honest and realistic upfront. Establishing clear expectations and demands for the client and our employees.

    Plus, we are all pretty vocal around here if you can’t tell. So if someone is pressed they’ll yell and we all come running!

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