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

7a6f8abf3af4af2ab8720782b06c9d77?s=47 Rob
August 30, 2019

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.

7a6f8abf3af4af2ab8720782b06c9d77?s=128

Rob

August 30, 2019
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Transcript

  1. Rob Harr STUDIO OPERATIONS & FORECASTING: THE GOOD, THE BAD

    & THE UGLY @robertharr
  2. GOOD MORNING!!

  3. None
  4. #DaytonStrong

  5. None
  6. Digital Diversity Days. November in Dayton

  7. None
  8. None
  9. None
  10. SSID: harvest_guest Password: getharvest W ifi

  11. Workshop Guarantee.

  12. None
  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.

  26. None
  27. So what is this then?

  28. THIS IS A STUDIO OPERATIONS WORKSHOP!

  29. None
  30. What is operations?

  31. Figure out what you make, then spend less than that!

  32. None
  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!

  39. None
  40. None
  41. Studio Operations & Forecasting BACKSTORY

  42. None
  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?

  49. None
  50. Story

  51. Web software studio specializing in development and design.

  52. Hourly work for hire.

  53. None
  54. None
  55. None
  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
  75. None
  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?

  101. 32

  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

  180. None
  181. None
  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.

  219. None
  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

  230. None
  231. None
  232. None
  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

  253. None
  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.
  317. None
  318. Make better mistakes.

  319. None
  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:
  323. None
  324. Studio Operations & Forecasting ANYTHING GOES

  325. THANKS! @robertharr rob@heysparkbox.com