In a "Timeless" Firm, a More Beautiful Business Emerges

By Tim Williams

Imagine a work environment in which you are judged solely by your effectiveness. Not by how many emails you answered, how many online meetings you attended, or how many hours you logged on a timesheet. 

In a world where only effectiveness matters, you’re have all the incentives you need to focus on the most important emails, participate in the most critical meetings, and execute the most essential tasks. Trivial pursuits are much less of a temptation, because distractions seriously erode your ability to produce results. 

”Busyness” vs. keeping promises

When you are accountable only for results — not for activities — the conversations you have with your supervisors and colleagues change significantly. You don’t have to defend or explain how you spend your time. No one is talking to you about your utilization rate or even the number of hours you work. Furthermore, no one cares how busy you say you are. Your self-reported level of “busyness” cannot serve as an excuse or reason for not fulfilling a promise or meeting a deadline. 

It’s been said that the definition of a professional is someone who is hired to produce a result, not execute a task. This is the essential difference between knowledge work and manual work. Management consultant Peter Drucker, who helped define and describe modern knowledge work, said the responsibility for productivity rests with individual knowledge workers themselves. Unlike manual labor which usually involves a set of objective, repeatable tasks, knowledge work is subjective, which means professionals must make a series of judgments which are focused more on the quality of the outcome than the quantity of the outputs. 

30 days vs. 30 minutes

While it might be rational to hold a manual worker accountable for how they spend their time, it makes much less sense in the realm of knowledge work. When Henry Ford was giving a plant tour, he answered a guest’s question about an executive that didn’t look particularly busy this way: 

“Why do I pay $50,000 to that man over there with his feet up on his desk? Because a few years ago he came up with something that saved our company $2 million dollars, and when he had that idea his feet were exactly where they are now.”

Albert Einstein spent many hours gazing out his office window, an activity that made him more valuable, more productive, and more effective — not less. The philosopher George Santayana once remarked “I’ve never had a good idea seated at my desk.” Creative directors in ad agencies often have their best ideas during a morning run, in the shower, or driving to work. How should they account for that on their timesheet? Moreover, how long does it take to have a good idea? The answer can range from 30 days to 30 seconds. 

Time spent vs. value created

Professional firms with a culture centered on the billable hour not only do a suboptimal job of capturing the value they create, but suffer from a host of unintended consequences. They unwittingly signal that what matters most is utilization, not accountability. Internal incentives revolve around tracking and accounting for time spent, not results created — quantity of time instead of quality of work. 

On the other hand, firms that choose to move away from the outmoded hourly billing model create a culture that emphasizes true productivity. Teams are focused on solving the problem, not spending the time. Collaboration happens more consistently because team leaders are not fretting about too many people billing too much time. They know that collaboration between “expensive” people will likely produce a better solution, usually faster. That’s in the client’s best interest because they’re getting more effective work, usually in less time. It’s in the agency’s best interest because they can earn a fair fee for the solution (by charging a fixed price instead of an hourly rate) and let their team move onto the next assignment instead of worrying they haven’t “spent the estimated hours.”

Every professional knows timesheets have never been an honest or accurate representation of how people spend their time. And when time tracking is removed from daily expectations, employees focus on what really matters: deadlines met, not hours spent (remember there is no direct correlation between percent of estimated time spent and percent of actual project completion). A culture without timesheets is more honest, not less.