Do you get top value from your team members?

Related posts on financial aspects of a small business operation

1.      Basic Financial Aspects in Every Business

2.      Financial Statements – Critical Information on Which to Base your Decisions

3.     Getting Value for your Manpower - Tracking and Forecasting

4.     Business Control Gauges - Monthly Management Report

The single largest expense in an architect’s office is manpower; wages paid to those who help create services, which are offered to clients.  Getting the maximum value from those employed in your firm is one of the keys to success.  In small architectural firms it is not common practice to track where each employee’s time is spent, using timesheets.  Some offices have timesheets, but fail to take advantage of all the valuable information they can provide.

Each team member has a role to play in a successful office.  Some facilitate the running of the office and are not directly involved with the client services.  Those directly involved providing client services track their time so that the cost-of-the-work on each project can be identified.  Tracked time spent on each project determines the profitability of each project.  If the project is profitable, all of its aspects are evaluated to see what factors played a role in its profitability.  On the other hand if a project is not profitable, it is prudent to determine why not.

Some team members will consistently complete projects, which have a good profit margin.  And some team members will consistently complete projects which lack profitability.

 

All factors affecting the projects profitability

and/or lack to profitability need to be examined at their completion. The following is a checklist of items to review when evaluating profitability of a project.  Remember, all this information can all be gleaned from well-kept and documented time sheets.

                   -     Was the fee adequate for this type of project?

-       Examine the in-house team – who worked on the project?

-       Review the consultants – did they do their work efficiently?

-       Examine the client – did he provide all the information promptly?

                          - did he change his mind throughout the project?

-       Permits – was the process of getting permits time consuming?

-       Details – were there difficult details to be worked out?

-       Materials – were there new or experimental material uses on the project?

-       Other special conditions or factors impacting the project.

 

Tracking time using timesheet, monitors the profitability of each project.  When records of time spent on projects are kept, they can be used to set fees for future similar projects.   And, evaluations of projects at their conclusion. give feedback and guidelines for completing future projects in a profitable manner

Most small architectural practices know that tracking time through timesheet is a useful tool for managing the most precious commodity in an office: manpower.  However they fail to take the time to maintain an office culture of time tracking and tabulating time.  They do they do not take the time to have a proper debriefing at the conclusion of each project to learn from experience, so they are often caught in repeating inefficient practices over and over again, never improving their internal effectiveness and their profitability.

Instead of evaluating the newly completed work, they rush ahead to start on the next project without learning form the last.  I may feel productive but its not.

As I experienced in the early days of my practice, the same mistakes happen over and over again.  My colleagues did this too: we never took the time to learn from our mistakes.

How did I eventually begin to learn from experience and incorporate the learnings into my day-to-day routing of running and office and producing services for my clients?

The answer is systematization!  And as I said in a prior post “a system is not a system unless it is written down and incorporated into the company culture.”

Let’s use the example of completing the design and construction of a project in a systems environment.

-       a project has a beginning and an end that are clearly identified

-       in the process of completing a project, there are key milestones

-       no project is begun until all the milestones c/w target dates are recorded on chart

-       at each of these key milestones there is a checklist of items to be completed at              that point

-       at these milestone, management can review the project and make input – they review the chart to see if the progress matches the timeline.

-       included in the chart are meetings with the client where their input is of value

-       the final step in each project is an evaluation of profitability and a debrief where all the lessons learned on the project are recorded and incorporated into the production systems

This process will continuously improve the efficiency and effectiveness of work done of projects: project-after-project, year-after-year.  It’s well worth the time and effort.

Based on my experience, before I incorporated production systems into my practice we were completing projects on schedule 30% of the time.  Once these systems were written down and incorporated into day-to-day use in the office we were completing projects on schedule 65% of the time.  Of course, this equated to a large improvement in the profit margin.

  NORBERT LEMERMEYER    Phone: 780 490 8831    Email: norbert@architectureplusbusiness.com    Website:  architectureplusbusiness.com     Twitter:  @archplusbis     Blog:  Architecture+Business Blog    Author:     The E-Myth Architect    Why Most Small Architectural Firms Don't Work and What To Do About

NORBERT LEMERMEYER

Phone: 780 490 8831

Email: norbert@architectureplusbusiness.com

Website: architectureplusbusiness.com

Twitter: @archplusbis

Blog: Architecture+Business Blog

Author:  The E-Myth Architect   Why Most Small Architectural Firms Don't Work and What To Do About

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