Workshop: Studio Operations & Forecasting: The Good, the Bad & the Ugly - Owner Summit 2019

7a6f8abf3af4af2ab8720782b06c9d77?s=47 Rob
February 11, 2019

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

February 11, 2019
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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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  7. SSID: harvest_guest Password: getharvest W ifi

  8. Workshop Guarantee.

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

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

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

  12. 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”.
  13. Speak Up

  14. https://sli.do #H732

  15. Collaborative Notes https://bit.ly/bureau-forecasting-summit

  16. Why are you here?

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

    Forecasting Part 4: Outcomes
  18. What is this?

  19. THIS IS NOT A TOOLING TALK!

  20. +

  21. THIS IS NOT A PRICING TALK!

  22. Hourly web work for hire.

  23. None
  24. So what is this then?

  25. THIS IS A STUDIO OPERATIONS WORKSHOP!

  26. None
  27. What is operations?

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

  29. None
  30. THANKS! @robertharr rob@heysparkbox.com

  31. Operations is the HOW between SALES and PROFIT.

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

  33. Discipline > Motivation TAN GEN T!

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

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

  36. GIANT SPOLIER!

  37. None
  38. None
  39. Studio Operations & Forecasting BACKSTORY

  40. Story

  41. Web software studio specializing in development and design.

  42. Hourly work for hire.

  43. None
  44. “You won’t be in control of your business until you

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

  46. Rob Harr Ben Callahan

  47. Rob Harr Ben Callahan

  48. PM Buddy.

  49. PM Buddy.

  50. Optimized for sustainability and sleeping at night Goal

  51. Running a business is hard.

  52. Running a profitable business is even harder.

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

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

  55. Our Craft The Truth. Business

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

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

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

  59. Studio Operations & Forecasting DESIGNING OPERATIONS

  60. To not be needed at Sparkbox. Goal

  61. Autonomy. Goal

  62. This is a cash intensive business.

  63. Resources Talent

  64. I am in the talent business.

  65. People are our biggest asset.

  66. 2 kinds of Companies: Talent Producers Talent Consumers

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

    Vacation Benefits
  68. Our Fake Team $45k $80k $100k $60k Salary $21 $38

    $48 $28 Hourly cost
  69. Our Fake Team - Individual rates - 4x $84 $152

    $192 $112 Bill Rate $45k $80k $100k $60k Salary $21 $38 $48 $28 Hourly Cost
  70. 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
  71. 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
  72. People have different values in different contexts. TAN GEN T!

  73. 20% 5% 6% 11% 58% Your Budget 58% Compensation 11%

    General + Admin 6% Rent 5% Advertising 20% Net Margin
  74. 20% 5% 6% 11% 58% Your Budget 58% Compensation

  75. Growth costs $$$$

  76. Apprenticeships.

  77. 6 months

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

  79. Hours per week?

  80. 32

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

  82. Different target utilization by role.

  83. 80%

  84. Devs 95% Designers 95% PMs 60%

  85. Slack Projects and Maintenance Agreements TAN GEN T!

  86. There are seasons for things.

  87. Surviving Growing Thriving

  88. Surviving Growing Thriving

  89. Designing efficient companies.

  90. Maximizing overhead value.

  91. Freedom is not free.

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

  93. Design your week.

  94. 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
  95. Monday

  96. Weekly Breakfast M onday

  97. Hit list M onday

  98. Timesheets M onday

  99. Projects Stand-up M onday

  100. Invoicing M onday

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

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

  103. Late Invoices Tuesday

  104. Sales Report Tuesday

  105. Tuesday

  106. Profitable Projects vs Profitable Portfolio TAN GEN T!

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

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

  109. MicroCash W ednesday

  110. Micro-Cash flow

  111. Micro-Cash flow

  112. Future P&L W ednesday

  113. Micro-Cash flow

  114. Micro-Cash flow

  115. $$$ Meeting W ednesday

  116. Humans Meeting W ednesday

  117. 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
  118. Thursday

  119. Director 1:1’s Thursday

  120. 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
  121. Friday

  122. All-Team Demo Friday

  123. Forecasting Updates Friday

  124. 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
  125. 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
  126. Selfcare TAN GEN T!

  127. 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
  128. Monday Tuesday Wednesday Thursday Friday Morning yoga Coffee Afternoon Golf

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

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

  131. TAN GEN T!

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

    T!
  133. 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
  134. The other 20%

  135. Wearing in the rut.

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

  137. Estimated Taxes Semi-Annual Tax planning Q uarter

  138. Year End Close Staff Retreat Owner Retreat Year

  139. Optimized for Sustainability and Sleeping at Night

  140. What are you optimizing for?

  141. OPS Cadence Exercise

  142. Short Break

  143. Studio Operations & Forecasting FORECASTING

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

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

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

  147. Discipline > Motivation

  148. Three simple steps.

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

    Grade and Adjust
  150. Step 1: Measure Yesterday

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

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

  153. Metrics

  154. Capacity

  155. Utilization

  156. Step 2: Predict Tomorrow

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

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

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

  160. Develop a forecasting cadence.

  161. I think weekly works best.

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

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

  164. Using letter grades.

  165. Ask good questions.

  166. Accuracy vs Precision TAN GEN T!

  167. It is really that simple…

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

  169. Bring on the pain.

  170. None
  171. Start with a small group.

  172. Stick with it.

  173. Wear in the rut.

  174. Celebrate the small wins.

  175. Rolling it out to the team.

  176. Remember the humans.

  177. Transparency

  178. Clearly setting expectations.

  179. What gets measured gets done.

  180. Forecasted Work vs Actual Work

  181. None
  182. None
  183. None
  184. 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
  185. No one will watch things more closely than the humans

    being measured.
  186. None
  187. Where we are now.

  188. The truth about time.

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

    Grade and Adjust
  190. PM Buddy.

  191. Operations Team

  192. 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
  193. It takes a team to not be needed.

  194. PEOPLE WHO WORK 
 ON THE BUSINESS. PEOPLE WHO WORK

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

  196. DIRECTOR OF PROJECTS DIRECTOR OF HUMANS TECHNICAL DIRECTOR CREATIVE DIRECTOR

  197. Accountant

  198. To not be needed at Sparkbox. Goal

  199. The biggest risk to Sparkbox. TAN GEN T!

  200. Studio Operations & Forecasting OUTCOMES

  201. Forecasting Cashflow

  202. Micro-Cash flow

  203. 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
  204. Most of our costs are fairly consistent and predictable.

  205. This may be the single biggest win.

  206. Accurate Sales Report

  207. Future Available Capacity

  208. Good forecasting helps with current negotiations.

  209. 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
  210. Accurate Forecasted P&L

  211. Micro-Cash flow

  212. Micro-Cash flow

  213. When to Hire

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

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

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

  217. Shovel-Ready Tasks

  218. Q4 2016 Story

  219. Estimating New Projects

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

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

    really bad at describing their actual needs.
  222. 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:
  223. 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:
  224. But…

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

    that feel the same.
  226. People Over Process

  227. Embrace your staff’s super powers.

  228. Clearly set team expectations.

  229. There are no shortcuts.

  230. 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.
  231. Accept the fact that you will be completely wrong about

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

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

    Rob’s two basic rules for happiness in business: Rule 1:
  234. 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:
  235. None
  236. THANKS! @robertharr rob@heysparkbox.com