The second thing that principals struggle with is proper systems to be profitable.
Once again, I can relate. While weve been consistently profitable for quite a few years now, we know weve been missing the mark with hitting what Baker would refer to as our utilization goal. Weve had huge difficulties with this, and, while there are many examples, the most telling example of our growth in this area is tracking time.
Starting about eight years ago, Eric tried to get us to really embrace personal time keeping. We tried many options, including building our own very complex job/time management system. Nothing, including that system sadly, stuck.
It was too much of a fight to hound people each day about entering their time from the past week (or month?): Have you done your timesheets yet today? Ugh. This was no fun–for anyone. So, we gave up. We thought, It is just not possible for this company to keep track of their time. WRONG!
When we were a six person firm, not having a timekeeping system wasnt too big of a deal because we knew what everyone was working on, and it wasnt too hard to guess which projects werent profitable. At eighteen people strong, however, the luxury of guessing is long gone. We need accurate, detailed, and constant measurement. We are now celebrating a full year of timesheets. First, our system was a series of Google Doc spreadsheets–about as low tech as it gets. This month, we just switched over to a very simple, easy to use system that our Engineering Department built. While the past year was difficult, and there was a lot of griping (from me included, at times), we now have a system, and it is working great.
I tend to be a little transparent with my blogs here, but I dont think sharing the details of our utilization would be appropriate. What I can say, though, is that through our timekeeping efforts over the past year, we have identified and plugged massive holes in our business. When I say massive, please, just take my word for it.
A timekeeping system that is strictly adhered to is the first step in measuring a firms profitability. If you arent profitable, and significantly so, youre not going to be able to have the freedom to treat your clients and employees as you need to in order to retain the best. Strong profitability leads to better decision making, better offerings, a stronger client and employee base, and further profitability. It all starts with timekeeping.