Professional Services - On Time, Time Keeping and Performance Measurement

October 2002

Dear Ndarala Colleagues

It is just over two months since my last Group report. For our newer members, the management reports deal with nuts and bolts issues, while the Group reports provide an opportunity for me to stand back and look at broader issues.

This long delay is simply a reflection of the pressures on me. It has been a very intense time. Now, however, I want to look at some of the professional issues that have arisen during this period.

On time and time keeping

One of the recurring themes in these reports has been the need for all of us to keep time sheets. I know some do and some don't. But, in my view, we all should. So I would like to start by looking at some time keeping issues.

When I go into a professional services firm, I start by finding out about their time keeping systems. I do this regardless of the assignment. Why? Because as a strategic consultant with a strong expertise in professional services firms, I know that measurement drives performance. That is, we focus on the things that we measure. And in doing so, we set the structure for performance across the whole firm. To illustrate.

If the time keeping systems are sloppy, then I know that I can normally get an immediate improvement in bottom line performance by tightening up those systems. The reason for this is simple. Our memories about time are very imperfect. As a general rule, filling in time sheets at the end of the day normally leads to underestimation of time on time on particular jobs of up to a third. This figure can rise to 50 per cent if time sheets are filled in on a weekly basis. So it is important to capture time properly.

In my experience, people often become very uncomfortable at this point. We have been charging the client x. We are going to lose our clients if we now charge them x plus 30 per cent. Sometimes these concerns have a degree of validity. If so, we know that the firm has a performance problem that has been concealed by the sloppy time keeping in that they have in fact been discounting their fees. Nevertheless, improved time keeping nearly always flows through to an immediate and positive bottom line impact.

Performance follows measurement

The next thing I look at is just what is measured and the targets attached to those measures since this indicates immediately what problems the firm might have, as well as just what will work in that firm.

I start by looking at individual time recording. What hours are staff expected to work, how is that time broken up between charge and firm time?

Now there is substantial variation in approach here between firms in terms of target hours and the break-up of those hours. However, from my experience there is an almost universal rule that firms focus first on charge time, after all that is where the income comes from, with firm time treated almost as a residual to be minimised. I also know that where this happens the firm is likely to experience problems in terms of over-runs in firm time, together with unwillingness on the part of staff to commit time to marketing or personal development since this is usually included in firm or non-charge time.

The lesson here is that firm time is an asset that requires conscious management.

I then look at the way in which performance is assessed.

A key issue here is the extent to which measurement, especially for more senior professionals, is solely based on personal performance. As soon as I see this, I know that the firm will have problems of delegation and revenue maximisation.

A second, broader, issue is the way in which measurement links to the stated objectives and values of the firm. As soon as I see a conflict here I know that there is a problem.

Time keeping, performance measurement and performance for the individual independent

Many smaller independents argue that these issues do not apply to them. We are small and know our own business. The reality can be quite different.

To begin with, most if not all of us overestimate our real working hours. As soon as I hear someone say that they work 55 hour weeks, I am suspicious and want to know what they mean by work.

Now I work reasonably hard. I also keep very accurate time records, logging off whenever I stop work. For example, my time on this report is recorded. During the shower I just had I stopped recording and have just started again. So I know my real working hours very exactly.

Some weeks I work very long hours. 57 hours last week, for example, including $5,600 in charge time spread across three clients. But when I look at the overall pattern, I find that my average hours across calendar 2000 as a whole were 42.89 hours per week, 43.53 over 2001 and 43.38 so far in 2002. Further, given family commitments, the only way I can get to these figures is by working early in the morning, at night and at weekends.

So you can see why I am suspicious when some one tells me that they average 50 hours plus per week. It tells me that they do not really know their time. And, consequently, they cannot really judge the value attached to that time. The only way to overcome this is to keep proper time sheets.

Of course, it's not just the hours we work but the distribution of those hours that is important. Here time keeping is very important in adjusting priorities as we go along.

In my case, I have to spread my time across production, marketing, Group activities (I break Group activities into four categories), professional development and administrative. To assist Group finances as well as maintain professional currency, I have to get a certain level of personal charge. But if I focus just on this, then Group development stops. So I have to try to balance.

Here the time records help me in that they show clearly where my focus has been and thus help me reset priorities. When, as has happened recently, I focus very heavily on infrastructure development including especially the desk top publishing exercise, then other activities drop. So the amount of time devoted to member liaison and support is well down. It is not a coincidence that the level of participation in Group activities across the total professional cohort is also down.

On Activity versus Reflection

One of the things that I try to focus on in time monitoring is the level of time devoted to service and personal development.

In my experience, independents can be broken into two groups, those that act and those that both act and reflect.
The majority of independents act, get the job, do the job. Of course they learn to some degree as they go along, but this is limited to what they notice and internalise while doing the job. A smaller group stands back and reflects on what they have learned. Within this second group, a still smaller cohort attempts to define and document.

In my view, action combined with reflection is essential to professional and business development in laying the basis for future work. Further, the process is greatly reinforced where the lessons are properly defined and documented. Without these steps, we will not have the things we require two years out.

On the difficulties of reflection

The problem, of course, with reflection, definition and documentation is that it takes time. This can make it very hard to do.

I was reminded of this recently at a dinner in Sydney for one of our senior colleagues who was in Sydney because of the work he is doing with a specialist medical college on the definition of medical competencies.

Over dinner, our colleague talked about the fascinating leading edge work he has been doing with a client. All those present could see how this might form the basis for a new national service offering. We could all share our colleague's frustration about the way in which other pressures made it difficult for him to do the necessary thinking and writing required to really take advantage of the work.

There is no easy answer here. We just have to do the best we can, recognising that we are all human. The key thing is to recognise that action is required and therefore to allocate at least some time despite other pressures.

All for now

Good Hunting

Jim Belshaw
CEO Ndarala Group

Note on Copyright

This material is copyright Ndarala 2002. It may be copied and used subject to due acknowledgement. If you wish to reproduce it or include it on your web site, then please include the following words at the end of the text: "This material is drawn from the Ndarala (www.ndarala.com) series on Managing the Professional Services Firm, is copyright Ndarala 2002 and is reproduced under license. If you wish to copy it, please include this acknowledgment."