Should Consultants Own The Utilization Metric?

Transcription

1 Should Consultants Own The Utilization Metric? Randy Mysliviec President

2 All rights reserved. Introduction This article discusses the merits of assigning a metric to your consultants for utilization and driving accountability via governance of that metric. I ll start by declaring my bias for doing this, although there are certainly those who would suggest otherwise. Few would debate the need for professional and consulting service providers to achieve consistently high utilization relative to industry benchmarks. It s just a matter of simple economics to remain competitive. Some however would say that consultants should not own the utilization metric since assigning people to projects is a job for management, and we cannot hold consultants accountable for certain aspects of demand outside the control of the consultant. To a large extent I agree with the first point, but somewhat disagree with the second. In my view, management always benefits from driving accountability to the lowest level possible in their operations. Period. Key Benefits of Consultants Owning the Utilization Metric Encourages the consultant to up-sell Constant or growing demand is key to keeping our people busy. Every organization has its own approach to creating demand for services. Consultants are frequently in client facing situations and therefore have opportunities to identify and develop demand for new and additional services. By holding the consultant accountable for their own utilization, you provide an incentive for them to find billable opportunities. Capture the collective input of the team for solving utilization issues Solving for utilization issues is rarely easy. It s a multi-dimensional problem. Some of those dimensions include getting the sales forecast right, finding the right skills mix for an ever changing demand profile, properly tracking ongoing projects to predict when people will come back into the available pool, developing of a virtual bench, and more. My experience has shown me that engaging the consultant pool in solving the problem will consistently drive new and better ideas for solving utilization problems. A nice byproduct of this approach is the resulting pride of ownership that drives consultants to make their ideas work. Creates incentives for continuous skills development People know that maintaining market competitive skills is necessary to job stability wherever they

3 3 choose to work. Owning the utilization metric is one more incentive for the consultant to constantly re-assess their skills portfolio, and find ways to improve their own skills to ensure that they will always be in demand. Benefits grow as the company size grows The more people you have, the more pain your company feels when utilization lags. Conversely, improving utilization of a larger population adds revenue and operating income in equal proportion. How do I Implement a Consultant Level Utilization Metric? Define and implement an easy to understand metric - There are lots of different ways to measure utilization. For purposes of this article, I simply suggest you have one simple and easy to understand metric, be clear on what the metric is and how it is calculated, educate the team on the metric, and be consistent in how it is used and reported. Have a reward system (and a stick) - There are many alternatives to creation of a risk/reward system. Financial incentives in the form of bonuses would be the most common form, with formal or informal recognition programs being another helpful vehicle to reward the right behavior and result. The company s annual employee performance planning system provides another way to implement objectives and goals around utilization. The risk/reward equation should clearly take into account that the consultant is just one (albeit important) dimension of helping drive utilization. In other words, make the carrot bigger than the stick. Singling the consultant out as the only responsible party is likely to drive behaviors that may not be in the best interest of the organization. A good best

4 4 practice is to involve the most senior consultants in development of your reward system, and test this new incentive with them first, adding others as you gain experience. Make the metric and the result visible in the organization - Nothing seems to get people s attention more than seeing their name in the company s public domain good news or bad. I normally recommend the creation of a dashboard for utilization which is visible to the organization in some manner, with electronic delivery being the easiest and usually most cost effective way to distribute and make visible the information you want others to see. Ranking consultants from highest to lowest by year-to-date utilization is most common. Utilization is most effective for consultants with client facing roles - Clearly some consideration should be given to determine which roles are better to apply the utilization metric to, and those that are not. Or if you want to consistently apply a metric to all regardless of the role, be sure to assess the degree of difficulty or opportunity for the role to have influence over the result. Then make the risk/reward equation fit the role. Consultants with more client facing opportunity would likely have more chances to identify new opportunity, although even those with fewer client facing opportunities can still generate new ideas to up-sell. Define the rules of engagement for consultant up-selling - Since a key tenet of consultants owning their utilization metric is up-selling, it is important to collaborate with the sales team on a suitable process. Important considerations will be around maintaining alignment with account planning processes, internal communications, and compliance with contractual responsibilities.

5 5 Summary Should the consultant own the utilization metric? My bias has long been to drive accountability as low in the organization as possible. And my own experience has proven to me that most consultants do respond in a positive manner to this method of driving utilization. Your approach and results will certainly vary based on your own situation. Talk with your senior leaders about the idea. Have them participate in constructing the approach that s right for your company. I think you will find that results from driving utilization via a consultant metric, is a strategic tool for the ever challenging task of managing utilization. About the Author Randy Mysliviec leads RTM Consulting, providing high impact advisory services for technology companies professional and consulting service businesses. RTM Consulting provides strategic and operational advice helping technology companies increase revenues, grow profits, and deliver best-in-class solutions by leveraging professional and consulting services more effectively. Acknowledged by industry sources as an expert in Global Resource Management (GRM), Randy helps multinational companies with the complex challenge of operating professional services teams serving the global market. RTM Consulting is a Certified Partner of TPSA and contributing member of PSVillage All rights reserved.