You've heard of "time management" – but have you ever considered the issue of "inventorying time"?
In consulting work – or at least in the type of consulting my firm does – projects are typically quoted on an hourly fee basis. While we give good faith estimates of time and associated fees, we always bill actual hours. This works both for us if we find issues unanticipated by us and our client, and against us when we've produced something of extremely high value.
Regardless of billing arrangements, there's still one inexorable fact – time marches on, whether we have client work or not. This fact has always been top of mind over the 29 years I've had my own firm, prompting me to develop a saying I've often shared, "You can't inventory time."
Time as Stock in Trade
For a consulting firm – or, more generally, any professional services firm – time IS the stock in trade. Unlike physical stock held by retailers or produced by manufacturers, time expires immediately if it is not used.
Time is either chargeable, or it's not. In my firm, and most any well-run professional services firm, if there's a choice between doing chargeable and non-chargeable work, do the chargeable work first. My Coach calls this "Dancing on the Revenue Line" – triaging activities according to the impact they'll have on the firm's top line.
- First Choice – Chargeable work.
- Second Choice – Work to fill the pipeline with the expectation of generating future chargeable work.
- Third Choice – Administrative work, professional development time, and all other non-chargeable tasks.
Managing Time as Physical Stock
I've always been a bit envious of manufacturers – their product consists of material, labor, and overhead. In a sense, they CAN inventory their employees' time, because it is embedded in the final product.
A perfect example of this is the known seasonal demand for certain products. For instance, in the case of a sock maker, two key selling seasons are "Back To School" and "Holiday." It's easy to watch the finished goods inventory build until seasonal shipments to retailers begin in late July and late October, quickly drop following the seasonal shipments, and then start the process of building inventory until the next seasonal shipping season.
Being able to store time in products enables manufacturers to better leverage both their employees' time and their investments in overhead. As long as sales forecasts track actual sales fairly accurately, and assuming production and inventory forecasts are well aligned with the sales forecasts and have been executed accurately and in a timely fashion, then manufacturers have indeed inventoried time! Successful planning and execution allows manufacturers to have exceptional profits. Unfortunately, the flip side is also true, because poor planning or execution can kill a manufacturer's profits.
Managing the Shelf Life of Time
Consultants and other service providers don't have the leverage of manufacturers and typically don't have predictable seasonal cycles, either. Thus, choices must be made on how to handle a short-term surge in client needs.
- Hire temporary or contract staff, if possible.
- Require staff to work overtime.
- Triage tasks aggressively, and delegate as much non-chargeable work as possible to support personnel.
- Delegate as much client work as possible to less chargeable folks.
- Compromise sleep, life outside of work, and time with family and friends – while this works in the short-term, it will undoubtedly cause problems if it becomes chronic.
Right now, my firm's client workload is higher than it's been in a number of years – and we're in the otherwise enviable position of having new clients wanting our help and existing clients wanting to start new projects. What to do?
- "Data mine" ideas previously put into "inventory" – While it's true you can't inventory time, you CAN inventory ideas and pull them out when the time is right, which is how I selected this month's topic.
- Triage time usage – This includes limiting the amount of time I am spending on this month's e-newsletter. Time's up!
Todd L. Herman