Imagine- Achievement vs Effort

A VISION for those in Professional Services:

The standard form of pricing professional services work among architecture and engineering firms still mostly involves some form of “gross up” cost estimating based on predicted labor investment at a defined labor rate. Even when setting fees on a “top down” basis or “cost of construction,” there’s still a “bottom up” exercise in regards to budgeting labor. Almost all firms “monetize” their time in some way by also filling out time sheets. The hours are loaded into the accounting system by project, by phase, by labor code.

Re-imagining

Let’s just imagine for a moment instead, a professional services business based only on results and value. There’s no time-sheet in the traditional sense. The business is not selling their time for a labor rate, but is focused solely on outcomes.

What is the issue? The time-sheet, recording time by increment, by labor code, by job number, on an hourly basis, is focused through the lens of effort– a justification model, “People like us focus on monetizing our time, documenting that effort, billing for it, while we hope to get the right results on the project.”

The opposite is a business focused through the lens of results- an achievement model, People like us produce results like these for fees like this.

Imagine:

  • Everyone is paid a salary – no hourly workers at any level.
  • There’s no discussion about “billable time,” only expected outcomes within time frames.
  • The focus is entirely on an achievement and income model:
    • “People like us produce results driven by value, scheduled completion dates, project milestones and deliverables that are billed at pre-determined values.”
  • The expected work week is to “complete the targeted work”- no exceptions. Work status is either “done or not done,” or “on-track or off-track.”
  • Jobs are billed based on percentage basis according to the fee and progress against the deliverable, not the time accrued.
  • There’s no accounting for time, but only revenue, only outcomes. We determine the percentage complete based on the results achieved vs the results planned. We set the fee based on the value to the market, region, project type, client.

What about Time and Materials ( T & M hourly) work, you ask? Perhaps there needs to be an excpetion for certain activities, but then why not charge more for T & M work than for fixed fee work. (We can’t achieve the margin a fixed fee can allow when we bill T & M.)

Alternatively, we simply stop working entirely on the effort-based model of billing for time. No T & M, ever. We work for clients that value the fixed fee model. For those clients that aren’t willing to pay a fixed fee we take the position of, “People like us produce the type of value where we believe a fixed fee is the only reasonable approach.”

Imagine this business, where everything is results, outcome, achievement driven rather than time-effort driven. Imagine piloting a project or a group that tests this approach.

Imagine quoting projects from the top down only, “We think a project like this should cost this much”. Our thinking is centered on the mindset of, ”Our business costs this much to run per year so we need to sell X-times that cost in executable backlog to be completed within this time frame”

Imagine.

The Podcast

Today is my every-other-Wednesday Creating Structure Podcast day. This afternoon I’ll record an hour session on Building Envelope Consulting, backgrounds, contexts, and values. This will be the 11th session and will be the 2nd one with people from my company, Wheaton Sprague Building Envelope. We will post the session next week around this same time. I hope you’ll listen and join our podcast community. We talk about people’s backgrounds, values, education, business, entrepreneurship, architecture, facade, glass, glazing, curtain wall, engineering, products, innovation, life, value, relationships and more. It’s quite organic, but we manage to hit the important points of the topics we want to discuss.

We’ve got 10 other podcast posts on our Buzzsprout platform. You can also listen via most of the other major podcasting platforms including Spotify, Apple Podcasts, IHeart Radio podcast, and more.

Podcasting is a terrific platform and I am blessed to have a studio, a production engineer-content manager, and great guests. You are invited to subscribe. Make it a great day out there!

https://creatingstructure.buzzsprout.com/

http://www.wheatonsprague.com

Work Backwards

Clients engage design professionals for the RA or PE stamp, the expertise, the capability, or the capacity. But the value does not reside in the statutory compliance and capability. I’ve met plenty of practitioners that couldn’t engineer client-centered solutions. The reason? Well, there’s a lot of them, but I say it’s mainly from not thinking like the client; not “working backwards” from the necessary or desired solutions. The engineering supports the solution for the client, not the reverse. The engineering has to be satisfied but we have to “think backwards” from the envisioned end result to the start of the design and engineering process.

Think like clients. Think like a builder or a constructor who happens to be an engineer or architect. Get inside the mind of the builder, the glazier, the installer, the fabricator. Get into the “voice of the customer.” Listen. Respect their role. Work to solutions that are simple, sequenced, practical.

We exist for the client; their problem is our opportunity. Their complexity is our unique selling proposition. Every client and every project is unique.

Work backwards to help achieve value.

Workflow and Development

There are two basic forms of “workflow” or “new practice” development:

  • That which we create (innovation and new category.) This needs to bring value to clients and they become part “creative partner” with us (from a “what if” and testing scenario).
  • That which our clients require (get competent and optimize)
    • They define
    • We build/design to spec
    • We execute
  • The Truth moving into the future
    • We all need in our businesses to develop one or both of these.
    • It needs to be done while being connected to the market; with the user/client

The details, the building, the success of the service or product, is up to the builders and operators