Studio Operations & Forecasting: The Good, the Bad & the Ugly - NYC 2019

“You won’t be in control of your business until you can accurately predict it.” One of Rob Harr’s early mentors and business advisors must have said that a thousand times during their time together—and it’s true. Join Rob for a deep dive into studio operations and forecasting. Take a guided tour through the good, the bad and the ugly, and uncover actionable strategies to help you take control of your business.

Get an inside look at how you can put forecasting at the heart of your business to improve project planning, cash flow, hiring, sales and more. Discover a relatively simple weekly cadence to implement (that doesn’t lose sight of your people), and dig into metrics to determine what you should track and what’s just noise. Before long, you’ll actually be in charge of your business.

Transcript

1. Rob Harr STUDIO OPERATIONS & FORECASTING: THE GOOD, THE BAD & THE UGLY @robertharr
2. GOOD MORNING!!
4. #DaytonStrong
6. Digital Diversity Days. November in Dayton
10. SSID: harvest_guest Password: getharvest W ifi
11. Workshop Guarantee.
13. Studio Operations & Forecasting: The Good, the Bad & the Ugly
14. Studio Operations & Forecasting: The Good, the Bad & the Ugly Or… What I wish someone had told me about running a studio 10 years ago.
15. YMMV!
16. I AM NOT A LAWYER! This is really small print that Rob Harr is not a lawyer. All of the things that he says should be checked with an actual lawyer who know what the heck they are doing. This is not a time that I would suggest that you “Better call Saul”.
17. Speak Up
18. Collaborative Notes Link in slack.
19. Why are you here?
20. Agenda Part 1: Backstory Part 2: Designing Operations Part 3: Lunch! Part 4: Forecasting Part 5: Outcomes Part 6: Anything goes
21. What is this?
22. THIS IS NOT A TOOLING TALK!
23. +
24. THIS IS NOT A PRICING TALK!
25. Hourly web work for hire.
27. So what is this then?
28. THIS IS A STUDIO OPERATIONS WORKSHOP!
30. What is operations?
31. Figure out what you make, then spend less than that!
33. Operations is the HOW between SALES and PROFIT.
34. Operations is more of a discipline then it is magic.
35. Discipline > Motivation TAN GEN T!
36. I believe the single biggest win for operations is forecasting.
37. For us, all of our operations centers around accurate forecasting.
38. GIANT SPOLIER!
41. Studio Operations & Forecasting BACKSTORY
43. Become a Real Company™ Find a great client Get some computers
44. Become a Real Company™ Find an event to speak at Figure out a vacation policy Become a Real Company™
45. Writing the codes.
46. FORGE
47. Employee #1
48. Failure?
50. Story
51. Web software studio specializing in development and design.
52. Hourly work for hire.
56. “You won’t be in control of your business until you can accurately predict it.” ~Geoff Mandeville
57. I am a HOW Person.
58. Rob Harr Ben Callahan
59. Rob Harr Ben Callahan
60. PM Buddy.
61. PM Buddy.
62. Optimized for sustainability and sleeping at night Goal
63. Running a business is hard.
64. Running a profitable business is even harder.
65. Running a profitable business while treating people like humans is a constant struggle.
66. Our Craft What we believe. Business
67. Our Craft The Truth. Business
68. Our Craft It’s all about the people. Business People
69. Project don’t fail for technical or design reasons, they fail because of the people involved.
70. There is no “One Way.”
71. Why I do this.
72. Genuinely take
 care of our people
73. Genuinely take
 care of our people Genuinely succeed
 in our business
74. Genuinely take
 care of our people Genuinely succeed
 in our business
76. Succeed in business by taking care of our people.
77. Studio Operations & Forecasting DESIGNING OPERATIONS
78. To not be needed at Sparkbox. Goal
79. Autonomy. Goal
80. Under a 10 handicap. Goal
81. “A company can seize extraordinary opportunities only if it is very good at the ordinary operations.” -Marcel Telles
82. This is a cash intensive business.
83. Good Operations is everyones job.
84. Resources Talent
85. I am in the talent business.
86. People are our biggest asset.
87. 2 kinds of Companies: Talent Producers Talent Consumers
88. The employee arrangement Sarah 2080 hours a year Developer Salary Vacation Benefits
89. Our Fake Team $45k $80k $100k $60k Salary $21 $38 $48 $28 Hourly cost
90. Our Fake Team - Individual rates - 4x $84 $152 $192 $112 Bill Rate $45k $80k $100k $60k Salary $21 $38 $48 $28 Hourly Cost
91. Blended Rate $45k $80k $100k $60k Salary $21 $38 $48 $28 Hourly Cost $33.75Average 
 Hourly Cost 4x Multiplier $135 Bill Rate Our Fake Team
92. Value Hourly Rate $45k $80k $100k $60k Salary $21 $38 $48 $28 Hourly Cost $33.75Average 
 Hourly Cost ? Fuzzy Math $185 Bill Rate Our Fake Team
93. People have different values in different contexts. TAN GEN T!
94. 20% 5% 6% 11% 58% Your Budget 58% Compensation 11% General + Admin 6% Rent 5% Advertising 20% Net Margin
95. 20% 5% 6% 11% 58% Your Budget 58% Compensation
96. Growth costs $$$$
97. Apprenticeships.
98. 6 months
99. For most of us it comes down to staff utilization.
100. Hours per week?
102. 32 or More?
103. What gets measured gets done. TAN GEN T!
104. Different target utilization by role.
105. 80%
106. Devs 95% Designers 95% PMs 60%
107. Slack Projects and Maintenance Agreements TAN GEN T!
108. Investment projects. TAN GEN T!
109. There are seasons for things.
110. Surviving Growing Thriving
111. Surviving Growing Thriving
112. The people and clients you start with will not be the people and clients you end with.
113. Ending well.
114. The end of things often colors how they view the whole.
115. Treating people like humans should not be a differentiator in our businesses. But it is.
116. Alumni.
117. Designing efficient companies.
118. Maximizing overhead value.
119. Freedom is not free.
120. I am a simple man. I love simple solutions.
121. Design your week.
122. Process is for people.
123. Monday Tuesday Wednesday Thursday Friday Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Director 1:1’s All-Team Demo Forecasting updated
124. Monday
125. Weekly Breakfast M onday
126. Hit list M onday
127. Timesheets M onday
128. Projects Stand-up M onday
129. Invoicing M onday
130. Monday Tuesday Wednesday Thursday Friday Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices
131. Tuesday
132. Late Invoices Tuesday
133. Sales Report Tuesday
134. Tuesday
135. Profitable Projects vs Profitable Portfolio TAN GEN T!
136. Monday Tuesday Wednesday Thursday Friday Late Invoices Sales Report Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices
137. Wednesday
138. MicroCash W ednesday
139. Micro-Cash flow
140. Micro-Cash flow
141. Future P&L W ednesday
142. Micro-Cash flow
143. Micro-Cash flow
144. $$$ Meeting W ednesday
145. Humans Meeting W ednesday
146. Monday Tuesday Wednesday Thursday Friday MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices
147. Thursday
148. Director 1:1’s Thursday
149. Monday Tuesday Wednesday Thursday Friday MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Director 1:1’s Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices
150. Friday
151. All-Team Demo Friday
152. Forecasting Updates Friday
153. Monday Tuesday Wednesday Thursday Friday MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Director 1:1’s Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices All-Team Demo Forecasting updated
154. Monday Tuesday Wednesday Thursday Friday MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Director 1:1’s Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices All-Team Demo Forecasting updated
155. Selfcare TAN GEN T!
156. Monday Tuesday Wednesday Thursday Friday MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Director 1:1’s Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices TAN GEN T! All-Team Demo Forecasting updated
157. Monday Tuesday Wednesday Thursday Friday Morning yoga Coffee Afternoon Golf league Morning Lifting Coffee Morning Lifting Coffee Weekly Breakfast Blocked Lunch TAN GEN T!
158. Smart Hours TAN GEN T!
159. Lifestyle Hires TAN GEN T!
160. Executive Assistant TAN GEN T!
161. Director of Humans TAN GEN T!
162. You will always have something to do. TAN GEN T!
163. TAN GEN T!
164. It is ok to punt to future you. TAN GEN T!
165. Monday Tuesday Wednesday Thursday Friday All-Team Demo Forecasting updated MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Director 1:1’s Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices
166. The other 20%
167. Last year. Story
168. ✈ LA -> SF -> Seattle ✈ Story
169. Storey
170. Spirit Week. Story
171. Story
172. Story
173. Story
174. Story
175. Story
176. Story
177. Wearing in the rut.
178. “Luck has the smell of Perspiration” -Mark Schlereth
179. “Luck is what happens when preparation meets opportunity.” -Oprah
182. Month Close Client Strategy Meetings OPS Team Meeting M onth
183. Estimated Taxes Semi-Annual Tax planning Q uarter
184. Year End Close Staff Retreat Owner Retreat Year
185. Optimized for Sustainability and Sleeping at Night
186. What are you optimizing for?
187. OPS Cadence Exercise
188. Studio Operations & Forecasting LUNCH TIME!
189. Studio Operations & Forecasting FORECASTING
190. image credit: http://thedealnewsroom.tumblr.com/post/123030031822/quantum-energy-co-founder-you-can-make-money-at
191. What we think of as magic is what we have yet to completely understand.
192. Forecasting is more of a discipline then it is magic.
193. Discipline > Motivation
194. Three simple steps.
195. Step 1: Measure Yesterday Step 2: Predict Tomorrow Step 3: Grade and Adjust
196. Step 1: Measure Yesterday
197. The first step in developing this superpower is to be able to measure what happened yesterday.
198. You have to get this right.
199. Metrics
200. Capacity
201. Utilization
202. Step 2: Predict Tomorrow
203. How many hours, on which projects during the week, and time out of the office.
204. This is a team effort.
205. Forecasting is an operations exercise, not a project management exercise.
206. Develop a forecasting cadence.
207. I think weekly works best.
208. Monday Tuesday Wednesday Thursday Friday Timesheets due at 9:30 am Forecasting updated before close of business
209. Step 3: Grade and Adjust
210. Using letter grades.
211. Ask good questions.
212. Accuracy vs Precision TAN GEN T!
213. Context Matters TAN GEN T!
214. TAN GEN T!
215. It is really that simple…
216. It is really that simple… Except it’s not.
217. “Don’t confuse simple with easy.” -Dan John
218. Bring on the pain.
220. Start with a small group.
221. Stick with it.
222. Wear in the rut.
223. Celebrate the small wins.
224. Rolling it out to the team.
225. Remember the humans.
226. Transparency
227. Clearly setting expectations.
228. What gets measured gets done.
229. Forecasted Work vs Actual Work
233. Monday Tuesday Wednesday Thursday Friday Timesheets due at 9:30 am Forecasting updated before close of business ForecastBot runs at 9:00 am Individual sheets updated
234. No one will watch things more closely than the humans being measured.
235. Where we are now.
236. The truth about time.
237. Step 1: Measure Yesterday Step 2: Predict Tomorrow Step 3: Grade and Adjust
238. PM Buddy.
239. Operations Team
240. Monday Tuesday Wednesday Thursday Friday All-Team Demo Forecasting updated MicroCash updated Future P&L updated $$ Meeting Humans Meeting Late Invoices Sales Report Director 1:1’s Weekly Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices
241. It takes a team to not be needed.
242. PEOPLE WHO WORK 
 ON THE BUSINESS. PEOPLE WHO WORK 
 IN THE BUSINESS.
243. LEADERSHIP TEAM OPERATIONS TEAM OUTREACH TEAM
244. DIRECTOR OF PROJECTS DIRECTOR OF HUMANS TECHNICAL DIRECTOR X 2 CREATIVE DIRECTOR
245. COMMUNICATIONS DIRECTOR
246. Biggest win for 2019: Communications Team TAN GEN T!
247. Story DIRECTOR OF BUSINESS DEVELOPMENT
248. COMMUNICATIONS DIRECTOR DIRECTOR OF BUSINESS DEVELOPMENT
249. Accountant
250. My Job Now
251. Focusing on a single client.
252. Coaching
254. Shit rolls uphill.
255. It is ok to punt to future you.
256. Metrics
257. OPS Team Goals O PS
258. Give backs O PS
259. Team Utilization O PS
260. Long term partnerships O PS
261. Outreach Team Goals O utreach
262. No whammies O utreach
263. Sales Targets O utreach
264. Combined Goal Com bined
265. To not be needed at Sparkbox. Goal
266. The biggest risk to Sparkbox. TAN GEN T!
267. OPS RACI Exercise
268. Studio Operations & Forecasting OUTCOMES
269. Forecasting Cashflow
270. Micro-Cash flow
271. Monday Tuesday Wednesday Thursday Friday Timesheets due at 9:30 am Forecasting updated before close of business ForecastBot runs at 9:00 am Individual sheets updated MicroCash updated
272. Most of our costs are fairly consistent and predictable.
273. This may be the single biggest win.
274. Accurate Forecasted P&L
275. Micro-Cash flow
276. Micro-Cash flow
277. When to Hire
278. When you can accurately forecast cash and future needs, these decisions become much easier.
279. Winning in business is when our capacity for sales is bigger than our capacity to do the work.
280. Accurate Sales Report
281. Future Available Capacity
282. Good forecasting helps with current negotiations.
283. Monday Tuesday Wednesday Thursday Friday Timesheets due at 9:30 am Forecasting updated before close of business ForecastBot runs at 9:00 am Individual sheets updated MicroCash updated Weekly sales report
284. Sales
285. People buy people, not process or brands.
286. A good portfolio is merely table stakes in finding work. TAN GEN T!
287. The best predictor of project success is how our stakeholders feel about it. TAN GEN T!
288. Client Happiness = A small delta between project expectations and project reality. TAN GEN T!
289. Client TAN GEN T!
290. Managing Client Expectations TAN GEN T!
291. Setting Client Expectations TAN GEN T!
292. Research Vendors Vendor Selection Negotiation Project Expectations Set TAN GEN T!
293. Research Vendors Vendor Selection Negotiation Project Expectations Set Expectations Managed TAN GEN T!
294. There is no silver bullet with sales. TAN GEN T!
295. Setting Goals
296. Achievable Goals vs Aspirational Goals
297. “A goal is not always meant to be reached, it often serves simply as something to aim at.” -Bruce Lee
298. One of the ways to make you have regrets in life is only to chase things you are sure to catch.
299. Being ready for slower times.
300. Shovel-Ready Tasks
301. Q4 2016 Story
302. Estimating New Projects
303. Estimating software projects at the beginning is irresponsible and impossible.
304. I believe the biggest risk for software projects is building the wrong thing. TAN GEN T!
305. Reason 1: Estimating software projects is impossible because: Clients are really bad at describing their actual needs.
306. We are bad at estimating work because we are optimistic. Reason 1: Reason 2: Clients are really bad at describing their actual needs. Estimating software projects is impossible because:
307. We are bad at estimating work because we are optimistic. Reason 1: Reason 2: Clients are really bad at describing their actual needs. Business needs change over time. Reason 3: Estimating software projects is impossible because:
308. But…
309. We can compare future estimates to projects in the past that feel the same.
310. People Over Process
311. Embrace your staff’s super powers.
312. Clearly set team expectations.
313. There are no shortcuts.
314. Embrace the “Office of the Presidency”
315. The best part of our companies is that they are made up of humans. Humans sometimes suck. The worst part of our companies is that they are made up of humans.
316. Accept the fact that you will be completely wrong about things that you are sure you learned.
318. Make better mistakes.
320. Rob’s two basic rules for happiness in business:
321. Life is too short to work with people you hate. Rob’s two basic rules for happiness in business: Rule 1:
322. If you ever become annoyed by a client, it is only because you’re not charging them enough money. Life is too short to work with people you hate. Rob’s two basic rules for happiness in business: Rule 1: Rule 2:
324. Studio Operations & Forecasting ANYTHING GOES
325. THANKS! @robertharr rob@heysparkbox.com