Slow and ‘happy’ wins the race
At MavenHive we don’t really have a lot of policies. Of the few that are floating around, the one that caps the billing hours* is the most exciting. After all, billing being the only source of revenue of a consulting shop, capping the hours sounds like a very tricky decision.
We cap billing hours at 32 hours a week, meaning that on an average, no individual at Mavenhive bills more than 32 hours per week. This cap being a policy at Mavenhive, we make sure that all our customers are fully aware of it. This is also a part of all our customer contracts. If anyone wants to work for more hours, they actually have to make sure that the customer is fine with it! As for the minimum number of hours, that depends on the customer too.
Assuming that 40 hours a week is usually the standard for billing, with 32 hours being the cap, pretty much everything including compensation, company operations, events and sponsorships, now need to be taken care of with 20% less revenue. With billing hours being that critical, one might think that increasing the number of hours is the way to go. However, it is exactly because of the importance of billing hours in a consulting shop, that we are trying to push the limits. We believe that if something is critical to your business, you should make sure you don’t follow the herd but rather, do things differently.
Doing things differently is fine, but one might wonder : Why cap the billing hours at all?
Now, there are a bunch of reasons for doing this. While most of them are obvious, it might still help to just talk about all of them together:
It’s never 40 — Though a lot of companies might say that they work 40 hour weeks, it invariably stretches to a lot more time since there is no capping. Especially when it comes to hitting revenue targets, finishing delivery and so on, people end up putting in a lot more hours. In most cases working 8 hours a day will include common distractions like internal meetings, learning, tea breaks etc. Capping and accounting for that with both customers and financial planning just ensures that we are never under pressure to do those extra hours of work.
In the end, this cap on billing hours helps us to achieve what we are here to build — something that is sustainable, both personally as well as financially, and, in that order.
Freestyle — One very interesting thing we realised was that when you cap the maximum amount of time you can spend on billable work, people end up finding time to do things that they would have never done otherwise. Like writing this blog, for example! :)
!Burnout — We have been in way too many ‘death marches’ to know what that means for sustainability. Each of us have been severely burnt out at least once in our careers and know how bad it can get. We are in this for the long haul and the risk of anyone burning out at MavenHive, is a risk not worth taking.
Efficiency — In a way, having lesser time to solve customer problems is good. It forces us to be extremely focused on our productivity and make sure that we don’t end up slacking in any way.
Question everything — Given that the revenue for services/consulting shops is a direct function of billing hours, it is one of those things that is never up for question. However, we firmly believe that there cannot be anything, even if it is at the very core of the business, that is not up for question. Questioning everything is not just an option, it is the rule.
80/20 Rule — A lot of product companies have explored the 80–20 rule. While some consulting companies have spoken about it, we have not heard of anyone who has diligently followed it. This is the first thing that almost always gets de-prioritised if the numbers for the quarter look bad. We follow it religiously only because it is baked into our business model.
Keep People Happy — Today, most folks in MavenHive belong to a demographic where they can no longer afford to sit in a dark corner of the office and hack away the whole night to glory. We used to do it, we used to love it and we absolutely miss it. But then, the realities of having a family life mean that to be able to hack on our personal projects, we need to reduce the strain and demand of delivery on customer projects.
Sounds good in theory, but how do we do it?
Like I said, this is something that we integrate into our financial planning. We make sure we set this expectation with every customer and that they are fine with just 32 hours of our time per week. Once they see our efficiency together with the effects that this has on their budgets, it is almost never a concern.
In the end, this cap on billing hours helps us to achieve what we are here to build — something that is sustainable, both personally as well as financially, and, in that order.
Thanks to @pavanks for the providing the outline of some of the why’s which this blog hopefully answers.
* Billable hours — A concept by which any typical consulting firm or consultants charges their client.
