By Dick Grove
I hate timesheets. They are probably the single most corrupting force in public relations because they reflect time as a value in itself, not the results of time spent. One of the few absolute truisms of both the advertising and public relations world is, “the most creative thing PR or ad firms do every week is their timesheets.”
I was reminded once again of this in reading an article by Kerry McKibbon in AdWeek… 9 Arguments Against Timesheets and for Modern Compensation Models
With my apologies to Ms. McKibbon, I’ve condensed the responses to her arguments against timesheets to just her most salient points. To all of which, I most heartedly agree.
Timesheets are the only way to measure value.
Time and value are not the same. Value isn’t about time; it’s about great quality in the work relative to overall price.
How do you manage pricing? Timesheets help us cost things out.
A lot of factors should go into agency pricing, including services, timing and deliverables. Pricing is as much an art as it is a science.
How do you manage scope creep or change? What about benchmarking?
It’s easier to manage scope change, up or down, on deliverables than hours. You either gave it to a client or didn’t. It’s more quantitative than burn. And in my experience, clients prefer quantitative.
How do you forecast and recognize revenue without measuring effort?
The first step here is a scope broken down by phase or service with further breakdown by deliverables or assets…you can forecast and recognize them as deliverables.
How do you prevent passionate teams from going too ‘all out?‘
Some proactivity is great. I love giving my fave clients bonus work. It will pay off in the long run in client satisfaction and longevity. If you’re consistently over delivering to the detriment of other accounts, no timesheets are needed, just a conversation.
How do you know if you’re going to be profitable?
Staffing, overhead and profit all need to be budgeted against signed and forecasted revenue. But 36 hours for this client or 47 for that client shouldn’t matter as much as overall profitability. And if resources are over-extended or profit is low, then figure out the gaps and rebalance: price higher, get average salaries down, better manage scopes or a mix of the above.
But timesheets are a way to stay honest about time spent to achieve a result.
Even if we assume time equals value, a timesheet is almost always an inaccurate quantification of time spent.Tangible results are the most honest way to serve a client. And then, again, the value is in the quality of those deliverable results. Time and value are not the same. Value isn’t about time; it’s about great quality and results.
Dick Grove, Chairman and founder of INK Public Relations, whose firm is paid on performance and deliverables, and not hourly fees.
