SCALING UP IN THE CREATIVE WORLD of Web Development & Digital Marketing
Over recent years I’ve consulted to a number of web design agencies, social media and SEO marketing businesses. What is common in this industry is the unique challenge the owners face between the creativity and leadership of web design, copy writing, content creation roles and managing the balance of different skills of creatives, developers and designers required to deliver their services.
From my experiences there are a number of case studies to demonstrate how, looking at things from the perspective of a productivity expert, quickly uncovered additional profit potential – which may never have come to light had we not had the discussion.
Productivity vs Creativity
Behind the technical development work, web design involves a large degree of creativity, but the perception exists that maintaining productivity levels stifles creativity. Working with the Directors & Project Managers of a thriving web agency, the surface issues highlighted that projects were running over budget, eroding the profits.
The Project Managers were spending too much of their working day updating and manipulating spreadsheets to try and keep on top of scheduling the outstanding work. Although their existing software had extensive project task lists and the amount of work remaining to be completed was visible, estimates of how much budgeted time was still required to finish the job were not visible. The project management was task focused, but not time managed.
This lack of reporting systems or logging time, meant information was not readily available to monitor how much time was spent on each project. Individual projects could not be managed to ensure they achieved the required profit margin. It was also not possible to tell whether sufficient jobs were completed in a week or over the months, to recover the overhead costs of running the business, until the financial reporting was completed a couple of weeks after each month end. By that time it was too late to act, and address the inefficiencies.
As our work evolved, and their understanding grew of how productivity directly affects profitability, the Directors quickly recognised it would be a key measurement needed in the business. They would need to track and monitor the time spent on the design, development and launch of the web packages, as well as the management and administration time involved in delivering the projects.
Despite our best efforts to establish productivity measures by asking the team to log in to projects on the company software being tested at the time, the software simply didn’t have the capability to provide meaningful productivity measurement reports. We had to either revert to manual tracking and reporting mechanisms or look for a different software.
As manual tracking would add, rather than detract from, the already overburdened administrative tasks, the business owners took the bull by the horns and did their research. Having only implemented a new software package the previous year, they took the brave decision to adopt a completely new software, that would deliver the productivity reporting, and start over again.
This has paid dividends (no pun intended), with information now being available to report on the levels of resource dedicated to the projects, compared against budget. The team can be better managed to focus on what’s behind schedule, where too much time has started to accrue on individual projects, or where more projects can now be started as the work is being finished more productively.
Additionally, as the time logs begin to provide more meaningful information as to how long each part of the project is actually taking (rather than estimating), this can be fed back into the budgetting for more accurate quotations in similar projects, for future quotations.
The company has the luxury of using this reporting and the data to decide whether to increase the profit margins by maintaining their pricing structure but using less resource, so achieve higher margins, OR maintain their current profit margins, and pass on the productivity improvement to the client, making themselves more competitive in the market.
The important point here is that had they not known the detail of how much time the programmed tasks would take, they would not have had the facts and figures to drive and inform their strategy decisions.
Another web design agency I consulted to, recognised the work assigned to an expensive senior developer could and should have been done by a more junior, less costly role.
The amount of time the senior developer spent on complex coding was less than 10% of their total work load, so the value they were adding to the client project was not justifiable for the cost of salary and employer expenses incurred by retaining such a highly skilled resource.
There was also the problem of frustration on the part of the senior developer, being asked to spend most of their working hours on relatively simple coding, which would have been quite demotivating for the employee concerned.
The owner took the difficult, but logical decision to remove the senior developer role. This required them to take on the complex coding themselves, which is not idea but for the level of work involved at the time, was the right decision. A junior developer was then recruited at a much lower salary base, contributing to a more sustainable and profitable business.
This last case study demonstrates how costly under utilised staff can be if not highlighted and addressed, especially in this new era of remote working where a manager of business owner isn’t always working alongside the team to see how they’re managing the work load. It’s a natural extension from the first case study, where logging the actual time spent on specific tasks of the project work was the main issue. But in this case, the actual planning of the work wasn’t managed sufficiently by the owner, to achieve acceptable levels of utilisation to ensure a profitable, sustainable business.
During the launchpad workshop of this digital marketing agency, we reviewed the to do list the business owner used to share the workload between their staff members. This was a simple spreadsheet for the week, listing the copy writing requirements, social media marketing scheduling for clients etc. The business owner had, quite rightly, developed standards of time of how long each piece of work should roughly take, but this wasn’t translated onto the spreadsheet of the team were working from, so the staff were completely in the dark as to the owners expectations.
Using that week’s list, I suggested the owner added in a column of the time allowances they based their resource requirement planning on, for each of the job roles. When we summed up the time of all the jobs on the weeks list for each team member, quite alarmingly it highlighted that one person would be utilised about 19% of their working hours for that week, and the other employee for just 6% of their time.
Clearly this demonstrated the business owner could onboard a significant amount of additional clients, to achieve a much higher turnover and profitability, without having to increase the salary cost to his business. It would mean, however, that a more robust management system and monitoring mechanisms would need to be developed and implemented, to ensure the workload would be delivered to the required quality standards and within the allocated time frames.
Three Key Solutions to Boost Productivity
Taking the individual challenges faced by the owners of the 3 case studies above, we can summarise three key solutions to boost productivity, without stifling the creativity required in the digital industries.
1. Set Standards
Ensure each piece of work assigned has a budgeted time allowance and the staff involved are aware of how long they should be spending roughly on the task.
There should be a mechanism for monitoring or recording the actual time spent, and the actual time reported in the system where it’s visible. The time allocation for each specialiaty or skill is the key driver for the project profitability so if that’s not being recorded the manager or owner has no way of knowing where the project went over budget.
Monitor & Control
The company’s management systems should include a point of monitoring for each staff member to review their performance and productivity. If the information is recorded that provides a tangible and objective reference point to guide the employee, and reduces any ambiguity as to what’s expected of them.
Review & Refine
The monitoring meeting is the opportunity to check in with each team member and disucss what went well, what they struggled with, and support them with extra training or guidance to improve the next time. This is the fundamental concept of continuous improvement.
2. Explain Scope & Quality
It’s probably most relevant when onboarding a new client project, that the team are given a complete overview of what the client has been sold, in terms of size, depth and quality of a website, or marketing campaign. If your team are overdelivering but taking up a lot more time than has been budgeted then your profit margins will begin to erode.
Its up to the account manager to ensure the clients expectations are met, but the team have to stay within budget if your business is to succeed.
3. Balance Your Resources
As I demonstrated in the case study above, it’s important to know how much resource you need not just in terms of quantity, but also the ratio of skills for the mix of projects you have. A strong forecasting and budgetting tool should help you ensure you recruit according to your project requirements, and avoid bringing in expensive staff that won’t use their skills to their best advantage if your portfolio of projects doesn’t require it.
It’s important to ensure that the team you build are kept interested. A senior software developer is soon going to become demotivated and lose interest if they spend the majority of their time on low level coding that doesn’t stimulate them or make best use of their skills. They’ll soon get bored, and move on – potentially taking your clients with them.
Your Next Steps to Greater Productivity
In summary, to optimise the productivity of your teams and maximise your profitability, you need robust technical management control systems combined with balanced, well-trained, supported and engaged employees to create an evolved, effective team who will work together to achieve the results you seek.
Alluxi is here to offer you support through these times of change, bringing a facts and figures approach to evolve your business and realise your goals.
As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the Alluxi Business Success Scorecard.
Take just a few minutes to respond to the scorecard and see how your business ranks in 10 key success areas. You’ll be invited to book a follow-up Productivity to Profit Breakthrough Session to discuss the results in more detail and identify how you can implement rapid and measurable improvements.
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