Over delivery

o·ver [oh-ver] de·liv·er·y [dih-liv-uh-ree]

1.Spending more time on projects than you've billed for

Service-based companies sell time. And there isn’t a firm on earth that doesn’t spend more time on projects than they can bill. Therefore, one of the biggest threats to profitability is ‘over delivery’: people taking longer on projects than they can get paid for.

The reality is most customers of project-based companies don’t get what they pay for – they get far more than what they pay for!

So how do you stop doing work for free?

We’re about to talk through a really simple technique you can implement right now that will lead to a big impact:

  • Reducing over delivery
  • Giving more capacity to do more work

The answer lies in telling your people how long they’ve got.

Making people aware of how much time they’ve been budgeted is the first step in getting to grips with over delivery. People are more likely to work within boundaries if they know where the boundary lines exist.

In our experience, however, what really propels project profitability through the roof is when your people want to know how much time they’ve got.

Before joining CMAP & J-Media Group, Judith Graham (our Operations Director) was the studio manager of a leading global pharma marketing and communications agency. The single most effective change she made was to cultivate a mentality in her project workers that the first question they should ask a project manager, before they delivered a client brief, was ‘how long have I got to do this’?

It’s natural to get caught up in the excitement of the client brief, creative juices coming up with grand and elaborate concepts. Now, of course you want to do the best you possibly can for your clients, but the truth of the matter is if you quoted two days it has to be the best job you can do in two days.

If you ask someone to finish something by the end of the week, they’ll complete it by the end of the week. They might finish it in 10 hours, they might do it in 12 hours, they could take 15. They probably could have always finished it in 10 hours… if they’d been given the boundary.

The result was project workers were much more realistic with what was possible to be delivered to the client. Clients started to get what they paid for. The studio continued to deliver excellent quality work for clients, there was absolutely no compromise on that; but it was coupled with a huge upturn in profitability.

The simple mechanism of giving someone a time limit (as well as a deadline) can be the difference between profit and little-to-no profit.

Your staff will still occassionally go over, but they’ll do it less. It’s not perfect, but you don’t need perfection to seriously increase profitability.

So what other benefits does this bring?

The less you go over budget on your projects, the more time you get back. Time that can be used & charged to other projects.

Imagine you’re a 30-staff firm with a £500 daily charge out rate for each staff member. Your workers start to over deliver an average of one day less a month. 30 days x £500 translates into an immediate £15,000 increase in profitability. Not to mention it’s also an additional FTE (+ a bit) too.

Workers who complete more of their work on time gives you the capacity to do more work without having to hire more people.