The constant forecasting and recasting of revenue is a colossal waste of time in most professional service organizations. No doubt every firm needs a periodic estimate of expected income and expenses, and the closer the estimate is to the actuals, the better. But the time devoted by senior professionals to the relentless forecasting process in most firms doesn't yield the expected incremental value. As the Scottish proverb goes, “You don’t make sheep fatter by weighing them more often.”
During the 16-hour flight from Los Angeles to Sydney, 90 percent of the activity in the cockpit is ensuring the plane is staying its course with the help of automated navigation systems. But the other 10 percent — the takeoff/ascent and approach/landing — is where a pilot’s skill and experience are essential. It’s during these two brief periods that pilots really earn their money.
It’s performance review time, and John Adams is being praised by his boss for being 89% billable. His colleague Jane Austin — who has similar experience and plays a similar role — was only 62% billable this year. Which is the most productive employee?
"Companies Want Lawyers to Kill the Billable Hour," reads the headline in a recent issue of the Australian Financial Review. Around the same time, the marketing publication Campaign ran an article titled "Wary Marketers Sour on Billable Hours." Could it be that the hourly is rate is finally, at long last, marked with an expiration date?
Most conversations between buyers and sellers start with the wrong question. Buyers are likely to prematurely ask “How much?” Your job is to postpone the answer and ask a beautiful question…
If you work in the world of professional services — advertising, law, accounting, architecture, etc. — it’s more than likely your firm is missing a critical element in its business model. Without it, you're dealing with self-inflicted roadblocks to your long-term financial success…
No doubt you’ve heard a friend in business say something like, “That’s fine for Apple or BMW, but we’re selling a commodity.” Even if your friend works for a grain processing company, that’s a remarkably misguided statement. And if you work in professional services, it unconscionable to believe that what you do is difficult to distinguish…
Why aren’t professional services firms more proactive on behalf of their clients? Because it’s not billable….
What do effective pricing and agile development have in common? Quite a lot, it seems. Especially in the world of professional services, where most firms are stuck in an industrial age model of adding up their hours (costs) and calling it a price.
If you have a hard-working team that seems to be working longer hours by the day, it’s likely because you don’t have a hard-working business strategy.
Do the executives on the front lines of your firm have a clear, unequivocal understanding of the principles that guide your commercial decisions?
In the age of disintermediation, no firm that plays on a national stage can claim to be a monolithic stand-alone resource for its clients. Rather, the best professional service firms are part of an increasingly complex and interdependent ecosystem of specialized solutions providers.
What if the metrics of success used by most professional firms are wrong? What if law firms, accounting firms, ad agencies, and a wide variety of consultancies are investing their resources at getting better and better at measuring the wrong things?
The hue and cry raised by agencies today as they deal with the professional buyers of their services is louder than ever. With each new business win, a short-lived celebration is soon tempered by the demands from client procurement managers who not only seek to negotiate lower pricing (which is their job), but increasingly endeavor to dictate to agencies exactly how they should sell, package and price their services.
Most professional firms walk into pricing discussions armed with an understanding and defense of their costs (spreadsheets populated with people and estimated hours) but have spent virtually no time or energy comprehending the value they’re about to create for their client. It’s little wonder that the senior executives at most professional firms are easy prey for the tactics of professional buyers in compensation and contract negotiations.