The $100,000,000 Answer
Haaaappy Friday,
Last week you were offered $100 million if you could increase your company’s overall utilization by just 10 points in 90 days. Piece of cake. More consulting is better for everyone – the public, the client, the company stakeholders, and more than anyone, the consultants. You learn more, learn faster, increase your value, and enjoy the reward of achieving your highest potential as a consultant by doing more consulting, not less.
The catch was to increase utilization without talking about it. Most people read that as a handicap, but it’s the key to the strategy.
When leaders set a utilization target and harp about meeting it, that number crowds out the mission. Morale sags, and forevermore leaders and staff are locked in a stressful game of timesheet whack-a-mole.
Here’s the abbreviated version of how to get utilization +10 within 90 days. Clarity and communication excellence required:
1. Issue Consulting 101 to the entire staff. Two pages max. Explain the basics in simple terms, like how the business works, why cash flow is critical, how consultants are expected to charge time, etc.
2. Direct all leaders to frame everything in the context of the company’s mission, impact, values, and inherent opportunities for self-actualization. That way busyness is driven by purpose, rather than fear.
3. Immediately dismiss the first leader that balks. That’ll send the message that you’re serious.
4. The default - consultants charge their entire day to consulting. Clients buy the human average, not just the cream. Charging to overhead should be an infrequent exception and require approval. You may discover you're overstaffed...
5. Eliminate most unbillable job numbers. Keep the essential bare minimum and gatekeep access. The value of time charged here is a dollar-for-dollar deduction from profit, which means it's a multiple x reduction in the company's market value/stock price.
6. Direct all leaders to act as the stewards of their team’s attention. To insulate their team from distractions and help them stay focused on the mission and the projects that advance it.
7. Direct leaders to monitor project schedules to ensure that every member of the project team transitions seamlessly to the next project. No gaps.
8. Every unbillable meeting invite must include the total cost of the meeting (rate x time for each attendee), and cc a senior executive.
9. Implement software tools and AI to augment overhead departments while allowing attrition to reduce headcount. Competitors are doing it.
10. Make overhead staff billable. Billing staff should charge ½ hour to each invoice they process. It’s project administration at a much lower rate than the PM, saving the client money. PR staff can be included in projects to help build public awareness and support. HR consulting? IT consulting? Of course. It’s a consulting business.
Punchline: Utilization is a result, not an objective. Don’t manage the metric. Manage the things that produce it. Shift the focus to the company’s mission. That’s why it exists.
And have a great weekend,
Dave
Feedback and blowback are always welcome: dave@goodnewsfriday.com
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