Workshop: Studio Operations & Forecasting: The Good, the Bad & the Ugly

7a6f8abf3af4af2ab8720782b06c9d77?s=47 Rob
November 09, 2018

Workshop: Studio Operations & Forecasting: The Good, the Bad & the Ugly

“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 Harr, Vice President of Sparkbox, 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 Sparkbox runs, and 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).

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.

WHAT WE'LL COVER
-What is Studio Operations?
-The difference between operations and project management
-Where to start with forecasting
-Improving forecasting through feedback loops
-Predicting and managing cash flow
-Getting your entire team involved

7a6f8abf3af4af2ab8720782b06c9d77?s=128

Rob

November 09, 2018
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Transcript

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

    & THE UGLY @robertharr
  2. GOOD MORNING!!

  3. None
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  8. None
  9. SSID: harvest_guest Password: getharvest W ifi

  10. Workshop Guarantee.

  11. Studio Operations & Forecasting: The Good, the Bad & the

    Ugly
  12. Studio Operations & Forecasting: The Good, the Bad & the

    Ugly Or… What I wish someone had told me about running a studio 10 years ago.
  13. YMMV!

  14. 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”.
  15. Speak Up

  16. https://sli.do #7591

  17. Collaborative Notes https://bit.ly/bureau-forecasting

  18. Why are you here?

  19. Agenda Part 1: Backstory Part 2: Designing Operations Part 3:

    Forecasting Part 4: Outcomes Part 5: Lunch! Part 6: Anything goes
  20. What is this?

  21. THIS IS NOT A TOOLING TALK!

  22. +

  23. THIS IS NOT A PRICING TALK!

  24. Hourly web work for hire.

  25. None
  26. So what is this then?

  27. THIS IS A STUDIO OPERATIONS WORKSHOP!

  28. None
  29. None
  30. What is operations?

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

  32. None
  33. None
  34. Operations is the HOW between SALES and PROFIT.

  35. Operations is more of a discipline then it is magic.

  36. Discipline > Motivation TAN GEN T!

  37. I believe the single biggest win for operations is forecasting.

  38. For us, all of our operations centers around accurate forecasting.

  39. GIANT SPOLIER!

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

  43. Writing the codes.

  44. FORGE

  45. Employee #1

  46. Failure?

  47. None
  48. None
  49. Story

  50. Web software studio specializing in development and design.

  51. Hourly work for hire.

  52. “You won’t be in control of your business until you

    can accurately predict it.” ~Geoff Mandeville
  53. I am a HOW Person.

  54. Rob Harr Ben Callahan

  55. Rob Harr Ben Callahan

  56. PM Buddy.

  57. PM Buddy.

  58. Optimized for sustainability and sleeping at night Goal

  59. Running a business is hard.

  60. Running a profitable business is even harder.

  61. Running a profitable business while treating people like humans is

    a constant struggle.
  62. Our Craft What we believe. Business

  63. Our Craft The Truth. Business

  64. Our Craft It’s all about the people. Business People

  65. Project don’t fail for technical or design reasons, they fail

    because of the people involved.
  66. There is no “One Way.”

  67. Studio Operations & Forecasting DESIGNING OPERATIONS

  68. To not be needed at Sparkbox. Goal

  69. Autonomy. Goal

  70. This is a cash intensive business.

  71. Resources

  72. Resources Talent

  73. None
  74. I am in the talent business.

  75. People are our biggest asset.

  76. None
  77. 2 kinds of Companies:

  78. 2 kinds of Companies: Talent Producers

  79. 2 kinds of Companies: Talent Producers Talent Consumers

  80. The employee arrangement

  81. The employee arrangement Sarah

  82. The employee arrangement Sarah Developer

  83. The employee arrangement Sarah 2080 hours a year Developer

  84. The employee arrangement Sarah 2080 hours a year Developer Salary

  85. The employee arrangement Sarah 2080 hours a year Developer Salary

    Vacation
  86. The employee arrangement Sarah 2080 hours a year Developer Salary

    Vacation Benefits
  87. Our Fake Team

  88. Our Fake Team $45k $80k $100k $60k Salary

  89. Our Fake Team $45k $80k $100k $60k Salary $21 $38

    $48 $28 Hourly cost
  90. Our Fake Team - Individual rates - 4x $45k $80k

    $100k $60k Salary $21 $38 $48 $28 Hourly Cost
  91. Our Fake Team - Individual rates - 4x $84 $152

    $192 $112 Bill Rate $45k $80k $100k $60k Salary $21 $38 $48 $28 Hourly Cost
  92. Blended Rate $45k $80k $100k $60k Salary $21 $38 $48

    $28 Hourly Cost Our Fake Team
  93. Blended Rate $45k $80k $100k $60k Salary $21 $38 $48

    $28 Hourly Cost $33.75Average 
 Hourly Cost Our Fake Team
  94. Blended Rate $45k $80k $100k $60k Salary $21 $38 $48

    $28 Hourly Cost $33.75Average 
 Hourly Cost 4x Multiplier Our Fake Team
  95. 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
  96. Value Hourly Rate $45k $80k $100k $60k Salary $21 $38

    $48 $28 Hourly Cost Our Fake Team
  97. Value Hourly Rate $45k $80k $100k $60k Salary $21 $38

    $48 $28 Hourly Cost $33.75Average 
 Hourly Cost Our Fake Team
  98. Value Hourly Rate $45k $80k $100k $60k Salary $21 $38

    $48 $28 Hourly Cost $33.75Average 
 Hourly Cost ? Fuzzy Math Our Fake Team
  99. 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
  100. People have different values in different contexts. TAN GEN T!

  101. 20% 5% 6% 11% 58% Your Budget

  102. 20% 5% 6% 11% 58% Your Budget 58% Compensation

  103. 20% 5% 6% 11% 58% Your Budget 58% Compensation 11%

    General + Admin
  104. 20% 5% 6% 11% 58% Your Budget 58% Compensation 11%

    General + Admin 6% Rent
  105. 20% 5% 6% 11% 58% Your Budget 58% Compensation 11%

    General + Admin 6% Rent 5% Advertising
  106. 20% 5% 6% 11% 58% Your Budget 58% Compensation 11%

    General + Admin 6% Rent 5% Advertising 20% Net Margin
  107. 20% 5% 6% 11% 58% Your Budget 58% Compensation

  108. Growth costs $$$$

  109. Apprenticeships.

  110. 6 months

  111. For most of us it comes down to staff utilization.

  112. Hours per week?

  113. 32

  114. What gets measured gets done. TAN GEN T!

  115. Different target utilization by role.

  116. 80%

  117. Devs 95% Designers 95% PMs 60%

  118. Slack Projects and Maintenance Agreements TAN GEN T!

  119. There are seasons for things.

  120. None
  121. Surviving

  122. Surviving Growing

  123. Surviving Growing Thriving

  124. Surviving Growing Thriving

  125. Designing efficient companies.

  126. Maximizing overhead value.

  127. Freedom is not free.

  128. I am a simple man. I love simple solutions.

  129. Design your week.

  130. 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
  131. Monday

  132. Weekly Breakfast M onday

  133. Hit list M onday

  134. Timesheets M onday

  135. Projects Stand-up M onday

  136. Invoicing M onday

  137. Monday Tuesday Wednesday Thursday Friday Weekly Breakfast TimeSheets due at

    9:30 am Projects Stand-up Prepare and Send Invoices
  138. Tuesday

  139. Late Invoices Tuesday

  140. Sales Report Tuesday

  141. Tuesday

  142. Profitable Projects vs Profitable Portfolio TAN GEN T!

  143. Monday Tuesday Wednesday Thursday Friday Late Invoices Sales Report Weekly

    Breakfast TimeSheets due at 9:30 am Projects Stand-up Prepare and Send Invoices
  144. Wednesday

  145. MicroCash W ednesday

  146. Micro-Cash flow

  147. Micro-Cash flow

  148. Future P&L W ednesday

  149. Micro-Cash flow

  150. Micro-Cash flow

  151. $$$ Meeting W ednesday

  152. Humans Meeting W ednesday

  153. 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
  154. Thursday

  155. Director 1:1’s Thursday

  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
  157. Friday

  158. All-Team Demo Friday

  159. Forecasting Updates Friday

  160. 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
  161. 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
  162. Selfcare TAN GEN T!

  163. 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
  164. Monday Tuesday Wednesday Thursday Friday Morning yoga Coffee Afternoon Golf

    league Morning Lifting Coffee Morning Lifting Coffee Weekly Breakfast Blocked Lunch TAN GEN T!
  165. Smart Hours TAN GEN T!

  166. You will always have something to do. TAN GEN T!

  167. TAN GEN T!

  168. TAN GEN T!

  169. It is ok to punt to future you. TAN GEN

    T!
  170. 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
  171. The other 20%

  172. Last week. Story

  173. ✈ LA -> SF -> Seattle ✈ Story

  174. Story

  175. Spirit Week. Story

  176. Story

  177. Story

  178. Story

  179. Story

  180. Story

  181. Story

  182. Wearing in the rut.

  183. Month Close Client Strategy Meetings OPS Team Meeting M onth

  184. Estimated Taxes Semi-Annual Tax planning Q uarter

  185. Year End Close Staff Retreat Owner Retreat Year

  186. Optimized for Sustainability and Sleeping at Night

  187. What are you optimizing for?

  188. OPS Cadence Exercise

  189. OPS Cadence Exercise

  190. Short Break

  191. Short Break

  192. Studio Operations & Forecasting LUNCH TIME!

  193. Studio Operations & Forecasting FORECASTING

  194. image credit: http://thedealnewsroom.tumblr.com/post/123030031822/quantum-energy-co-founder-you-can-make-money-at

  195. image credit: http://thedealnewsroom.tumblr.com/post/123030031822/quantum-energy-co-founder-you-can-make-money-at

  196. What we think of as magic is what we have

    yet to completely understand.
  197. Forecasting is more of a discipline then it is magic.

  198. Discipline > Motivation

  199. Three simple steps.

  200. Step 1: Measure Yesterday Step 2: Predict Tomorrow Step 3:

    Grade and Adjust
  201. Step 1: Measure Yesterday

  202. The first step in developing this superpower is to be

    able to measure what happened yesterday.
  203. You have to get this right.

  204. Metrics

  205. Capacity

  206. Utilization

  207. Step 2: Predict Tomorrow

  208. How many hours, on which projects during the week, and

    time out of the office.
  209. This is a team effort.

  210. Forecasting is an operations exercise, not a project management exercise.

  211. Develop a forecasting cadence.

  212. I think weekly works best.

  213. Monday Tuesday Wednesday Thursday Friday Timesheets due at 9:30 am

    Forecasting updated before close of business
  214. Step 3: Grade and Adjust

  215. Using letter grades.

  216. Ask good questions.

  217. Accuracy vs Precision TAN GEN T!

  218. It is really that simple…

  219. It is really that simple… Except it’s not.

  220. Bring on the pain.

  221. None
  222. Start with a small group.

  223. Stick with it.

  224. Wear in the rut.

  225. Celebrate the small wins.

  226. Rolling it out to the team.

  227. Remember the humans.

  228. Transparency

  229. Clearly setting expectations.

  230. What gets measured gets done.

  231. Forecasted Work vs Actual Work

  232. None
  233. None
  234. None
  235. 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
  236. No one will watch things more closely than the humans

    being measured.
  237. Where we are now.

  238. The truth about time.

  239. Step 1: Measure Yesterday Step 2: Predict Tomorrow Step 3:

    Grade and Adjust
  240. PM Buddy.

  241. Operations Team

  242. Monday Tuesday Wednesday Thursday Friday 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
  243. It takes a team to not be needed.

  244. PEOPLE WHO WORK 
 ON THE BUSINESS. PEOPLE WHO WORK

    
 IN THE BUSINESS.
  245. LEADERSHIP TEAM OPERATIONS TEAM OUTREACH TEAM

  246. DIRECTOR OF PROJECTS DIRECTOR OF HUMANS TECHNICAL DIRECTOR CREATIVE DIRECTOR

  247. Accountant

  248. To not be needed at Sparkbox. Goal

  249. OPS RACI Exercise

  250. OPS RACI Exercise

  251. Studio Operations & Forecasting OUTCOMES

  252. Forecasting Cashflow

  253. Micro-Cash flow

  254. 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
  255. Most of our costs are fairly consistent and predictable.

  256. This may be the single biggest win.

  257. Accurate Sales Report

  258. Future Available Capacity

  259. Good forecasting helps with current negotiations.

  260. 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
  261. Accurate Forecasted P&L

  262. Micro-Cash flow

  263. Micro-Cash flow

  264. When to Hire

  265. When you can accurately forecast cash and future needs, these

    decisions become much easier.
  266. Winning in business is when our capacity for sales is

    bigger than our capacity to do the work.
  267. Being ready for slower times.

  268. Shovel-Ready Tasks

  269. Q4 2016 Story

  270. Estimating New Projects

  271. Estimating software projects at the beginning is irresponsible and impossible.

  272. Reason 1: Estimating software projects is impossible because: Clients are

    really bad at describing their actual needs.
  273. 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:
  274. 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:
  275. But…

  276. We can compare future estimates to projects in the past

    that feel the same.
  277. People Over Process

  278. Embrace your staff’s super powers.

  279. Clearly set team expectations.

  280. There are no shortcuts.

  281. Embrace the “Office of the Presidency”

  282. Embrace the “Office of the Presidency”

  283. The best part of our companies is that they are

    made up of humans.
  284. The best part of our companies is that they are

    made up of humans. The worst part of our companies is that they are made up of humans.
  285. 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.
  286. Accept the fact that you will be completely wrong about

    things that you are sure you learned.
  287. Rob’s two basic rules for happiness in business:

  288. Life is too short to work with people you hate.

    Rob’s two basic rules for happiness in business: Rule 1:
  289. 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:
  290. None
  291. None
  292. Studio Operations & Forecasting ANYTHING GOES

  293. THANKS! @robertharr rob@heysparkbox.com