“Assumptions are made and most assumptions are wrong”
Albert Einstein
I’m always blown away by the amount of business owners I meet that tell me ‘I have a good feel for the numbers’ or ‘I’m pretty good at gauging where we are’ . Using a bit of fag packet maths to accertain the time spent servicing (Or overservicing) a client or where the business as a whole will come out at the end of the month.
I’ve had a few memorable experiences of this. I recall a conversation with a client a few years back that went something like this;
To set the scene, yet another last minute drama had occurred with a customer that had the whole office running around in a panic, I won’t even go into the damage that does to the culture, efficiency of the team and the overall happiness levels within the business – that will follow in another post!.
Me: This client does appear to take up alot of time and creates quite a bit of panic in the office. Are we tracking time spent against the number of hours they actually pay for?
Client: Oh no need, I have a pretty good gauge on where they are, we are about right with this client…plus, they are a bread and butter client, they pay the bills, we’ve worked with them for years and probably always will.
Long story short, we eventually implemented a really simple time tracking system which shocked the business (me not so much) . They were over servicing the client by almost 90%.. In fact, the meetings, updates and general disaster control they were doing for the client, took them over their allocation of hours BEFORE they even brought any value to the client and completed the work they were being paid to do.
The outcome of having real-time, important data at their fingertips.
- They went back to some of their clients and renegotiated contracts.
- If they didn’t increase the budget, they reduced non essential meeting and updates.
- They built more ‘project management and meeting time’ into their quotes from the get go, as they realised this accounted for more time than they had realised.
- They ensured the right people managed the right tasks, no more senior managers doing tasks that could be done by team members at a lower cost rate.
- They gave notice on clients that didn’t make sense anymore – including this ‘bread and butter client’.
Armed with the right information, you can make good business decisions quickly, talking to your customers, reducing costs, and hiring additional resources ahead of hitting capacity.
This situation has arisen a number of times in my career, over servicing clients is a classic one, often there is a misconception that tracking time is time consuming, it isn’t if you invest time in finding the right technology, it should seamlessly integrate into your daily tasks.
In summary, yes, using a bit of intuition and making decisions based upon your experience can be great, running over some months isn’t the end of the world but having the right data at the right time is always going to give you a stronger basis to make decisions.
We implement this using our Six Pillars Method in the dashboards section.