I’ve written a lot about how the real threat to your earnings is that every hour of billable time generates at least an hour of non-billable time.
That’s a real Catch 22 as it almost imposes a penalty on quality. The higher you strive for perfection, the more you want to be known for exceptional customer service, the more hours you pile onto your already crowded calendar. Non-billable hours!
This time is a legitimate “cost” to your business and your bottom line, just as much so as your rent or utility bill. With one exception–the cost of lost time will never show up on a P&L statement. Rather, it exists in what I call the “dark matter” of your business.
I’d like to share a case study with you from my days as an entrepreneur, before I began focusing on your industry.
As an entrepreneur, I started a digital publishing firm. To give you a clue as to how long ago that was, our primary customers were companies like Microsoft that produced reams of printed manuals to accompany their software products. My company wrote those manuals.
What I discovered was that individual writers were never satisfied. They always wanted more time to polish their work for the fifteenth time, but at some point I could no longer charge the client for that time.
The difference? Given that I couldn’t charge for the time, and that I couldn’t turn the writers to a new project while they were still “working” on the old one, the difference came right off the bottom line. I would sit and virtually see my profits sucked out in the last 20% of every job. Those from the US and the UK who had invested $2 million in my firm were no happier than I was.
The conversation I finally had to have with my team was about when “good enough is good enough.”
The conversation I finally had to have with my team was about when “good enough is good enough.” You would have thought I just insulted their mothers! How dare I suggest that their craft, their art should be impacted by something so crass as the profit motive.
So I made a change…in their compensation plan. When I assigned them a project, I also assigned them the total hours they were allotted. It was as if I had placed them on a flat fee and if they went over, well…they could work as long as they wanted but they weren’t getting paid for that time.
And if they came in under (assuming they passed our quality control checks) they got to keep the extra dollars!
Want to guess what happened? That’s right; good enough became good enough. I was satisfied. Microsoft and other clients were satisfied. The writers were satisfied and the investors were more than satisfied!
Good enough can be a very high standard. It does not mean cutting corners. Rather, it means delivering what you promised. Delivering on your value proposition. But also knowing when the client has gotten fair value.
Get your ego and your perfectionism out of way and as legendary football coach, Nick Saben of Alabama would say, “Just do your job!”