End of timesheetsThis week marks the two-year anniversary of a very significant event for Corbett, Duncan & Hubly. On July 1, 2012, we stopped time entry in our firm and dove headlong into pricing all customer work in advance. It hasn’t been easy, and we don’t have all the answers—but we have learned a lot—and gotten used to this new way of operating.

Here are just a few of the things that we’ve picked up:

1. Customers don’t pay for the time you spend doing their work. They pay for a result. If you set a price and a scope up front, you don’t need to talk them off the ledge when they receive an unexpected bill and call you to discuss it. Nobody likes a surprise invoice.

2. Inputs don’t really matter to customers. What they care about is what results they are expecting, when they can expect them, and what the relative value of those results is that they are willing to pay for. Everything else is secondary. If you are a customer of CDH, and this isn’t the most important thing to you, then let’s have lunch so we can better understand your needs.

3. Looking back at billable hours or utilization statistics doesn’t tell you how you are doing for your customers. It just tells you how busy your people are. It doesn’t tell you if you are getting better at pricing, and it doesn’t tell you if the hours that people are putting in are valuable to the customer. Here’s what matters:

– is the work product good?
– did we do what we set out to do?
– is the customer happy?
– what can we improve upon next time?

4. You don’t need billable hours and statistics as the majority information for a performance evaluation. In fact, we stopped tying those metrics to evaluations when we were still keeping time. Your managers know who your performers are, and who they aren’t. Some of your best performers work lots of hours and are heroes for their customers. Some of your worst performers also work lots of hours. What information are you looking at to make the distinction?

5. We have plenty of information we look at to run our firm without billable hours. It can be done. How? I’d be happy to discuss it with you.

As I said, these are just a few of the things that we have learned. We made this change in how we operate so that we could really focus on making a difference for our customers. At the end of the day—that is what really matters.

What do you think?