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Fixing the Downward Spiral in Professional Services



Too many projects. Not enough resources. High attrition. Low morale and low reputation both inside and outside of the company. While the effects of the professional services downward spiral are easy to identify, it’s the root causes that are difficult to see. Attempts to improve resource management or project oversight help, but they continue to mask the real issues of operational inefficiency in our basic customer-facing delivery models.

In an ideal world, each project would require a dedicated group of resources a specific length of time to complete a project. We’d ship a team of people in on Monday and by the scheduled end date, they’d all be freed up to start another engagement. While we know this isn’t plausible, the root causes of the downward spiral can only be identified by studying the primary departures from it. 

Departure #1: Allowing Customers to Control Revenue

Rather than making it clear that the customer has just secured a talented team of resources for a specific window in time, we allow them to reschedule the project timeline to fit their availability. This adjustment allows them to dictate our ability to generate revenue from that engagement. Why do we allow this without consequence? The contract mutually agreed a timeline, a resource capacity and an expected monthly price.

We can partially control this. I’ve written contracts that require a customer to engage in the project otherwise, the resources will be reassigned. In other words, if our intention to generate revenue from this project is thwarted solely by the customer’s lack of engagement, then we have the right to seek that revenue elsewhere. We trialled this approach for more than two years and never had a customer reject the clauses. This is because it makes sense to everyone at the time of deal closure.

Departure #2: Layered Project Staffing

To compensate for Departure #1, we begin to layer projects onto consultants to account for the revenue generating inefficiency. I recently heard someone say that we should assign resources by estimating the maximum number of projects one person could handle. If a person could handle 4 of these projects, then staff them at 25% on each. While I understand the thought process behind this approach, layering a consultant with the maximum number of projects can accelerate the downward spiral.

This approach maximizes the impact that context switching, escalations or workload fluctuation has on all of the projects. When one project has an issue, it now affects the maximum number of other projects. It exacerbates the impact. The goal, instead, should be to minimize simultaneous projects. We can achieve this by focusing our delivery methodology on maximizing the use of resources wherever possible. For example, while running a CPQ consulting company, we built a project staffing model that consumed at least 50% of a resource at all times. We explained to customers that this level of resourcing gave them the greatest possible chance of success; which is true.

For the customer, knowing that every resource only had one other project gave them peace of mind that our team was dedicated to their success. As a sales tactic, we asked customers to ask our competitors if they would guarantee the same ration of consultants to projects. Needless to say, it proved a winning tactic.

Departure #3: Controlling Project Progress

When a project doesn’t finish on time, it interferes with the start the next project. The turmoil makes it look as though we need better resource management. This can help, but it won’t stop resources from not being available because of project delays. If we want to fix this problem, we have to focus on improving our control of projects.

Customer accountability during the design stage is key to finishing a project on time. During design, the customer must understand that its role is to specify a solution that will work in the production environment. Not, to make that determination once they get their hands on it in testing.

Allowing the customer to bait and switch the purpose of testing to become what they want, rather than what they asked us to build is the major cause for project delays. We can control this by ensuring that customers develop test cases that only reflect the validation of the design they agreed and not a series of test cases that reflect what they wish would happen. This should be contractual. Again, I’ve spent years writing this into customer contracts and bar a few objections we’ve always managed to agree to this term because it makes perfect sense.

Doesn’t iterative development fix this? Yes, if you do it right. A project requires at least 10 or more sprints to accurately predict its run rate. When the customer is funding a project to be completed (not kind of completed), then the run rate has to be accurate otherwise the project's budget suffers. Unfortunately, most professional services engagements don’t have the ability to generate this many sprints. So instead, they go ahead with 3-5 sprints only to find that the same issues occur but now without a completed design to which to hold the customer accountable. Personally, I think this is a far worse result, what do you think?

The Titanic had a Detailed Audit Trail

Over the past 10 years or so, we seem to have moved away from the importance of project-based certifications because they simply haven’t provided the increases in quality outcomes. Many industry executives do not believe that project manager certification is as relevant nor that ISO 9001 certification has done much more than provide an audit log of the disaster.

While these programs have some value, we believe there is a significant disconnect from the real issue. Our 8K Certification was developed as an alternative to other programs that refocuses a team's efforts on operational behaviors that increase the likelihood of a successful project. A certification for a professional services team should verify that they have project delivery best practices built into their operating model. Isn’t this what the customer wants? In the coming weeks we have teamed up with BigTime PSA to start elevating the level of discussion around this topic.

The professional services downward spiral starts because we keep trying to make up for operational inefficiencies already built into our model. Instead of waiting for other methods to make magic happen, we need to actively fix the model. Any customer is going to agree to increase its engagement and to be held more accountable if it means their project is delivered faster, closer to budget and of a higher level of success. All you need to do is ask.


Join us on August 14th, as we start detailing a series of operational best practices that make up the 8K Certification. The first session will give a broad overview of the program before running follow up sessions to move into each discipline in detail.

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