John Tyreman: 0:00

Some black holes aren't way out in space. They're right inside your firm, pulling your team, your energy and your profit into the void. Let's talk about it on the podcast. Welcome, experts, practitioners, marketers, sales pros, consultants, entrepreneurs to the Breaking Biz Dev podcast. I'm John. He's Mark, and we're here to talk about all of the different black holes that are devouring your firm and sucking up the most important resource. You have your time. Mark, how you feeling today?

Mark Wainwright: 0:52

I am, I'm well I love how you've, you've taken this black hole thing and just run with it, John. This is, this is good. we're gonna talk about all the things that are taking way too much of your time, things that are distracting, things that you're focusing on that you shouldn't be focusing on that take away your time and your energy and your resources and fail to actually help you improve, grow your business, be successful, all that stuff. So yeah. Here we go. Black holes. Okay.

John Tyreman: 1:19

We wanna steer clear of these ones. Yeah. So, uh, just before we dive into our topic du jour today, I just wanna remind listeners to. Follow the show wherever you are listening or watching the podcast, leave a rating and a review and fill out our listener survey, which is linked in the show notes.

Mark Wainwright: 1:36

Yeah, I don't know if there's any particular reason why we've gone into the, into the universe today, John, but it seems like a, it seems like a, a fun metaphor for discussing all these distractions that are, that are happening both internally and externally in your. Organizations, so Sure. What the heck? Let's call'em, let's call'em black holes. And we've got ones that kind of range far and wide here, so,

John Tyreman: 2:02

Yeah. And, and the only, the only metaphor I could think of let's, let's make hu humans multi-planetary, right? Isn't that like Elon Musk's mission?

Mark Wainwright: 2:12

here we go.

John Tyreman: 2:13

Anyway, let's not go down that wormhole. but Mark, the first black hole that you came up with was utilization. Why is uh, utilization a black hole?

Mark Wainwright: 2:23

This sounds so specific and wonky. But if people have spent any time in professional services firms, this is one of the numbers that people talk about and. Utilization just to kind of make sure everybody we're, we're, we're defining this, right? Right. This is, this is, given a hundred hours of time, how, how, what percentage of that are you, are you spending doing billable work? Right? So this gets into the minutiae of counting minutes and seconds of your life, and if you are doing billable or non-billable work, and it sounds fantastic. Particularly for people who, look at, boy, if I'm gonna be billing more of my time and we're gonna be making more money, it sounds really like a great idea. Right? But it fails. Like the big one that it fails at is determining efficiency. First off, tracking utilization measures activity, not sort of impact or ultimate outcomes, right? It's, it just shows you, that, that everybody's got a full plate of work, a full schedule but not necessarily that they're working on the right things or they're not actually advancing. Projects forward, they're, we're spinning our wheels, so we're measuring time spent, not necessarily client outcomes or value created.

John Tyreman: 3:51

We're measuring how much time is spent, not how the time is used. Yeah,

Mark Wainwright: 3:55

exactly. Exactly. All right, so a second one here, and we'll clip through these

John Tyreman: 4:00

sure.

Mark Wainwright: 4:01

tracking utilization, actually punishes efficiency. We mentioned that, that word earlier in that, throwing hours, at something, endlessly

John Tyreman: 4:12

Yep.

Mark Wainwright: 4:13

doesn't necessarily, make us. Be more efficient. People slow down their work in order to stay billable and not actually get things done quickly. And when we think about doing things better and more quickly and more efficiently, we, we things like process improvement and, and innovation come to mind. But when we're just sitting there tracking hours, we're actually working in opposition to innovation process improvement. We're not necessarily finding ways to do things faster and better. We're just making sure that our plates are full.

John Tyreman: 4:50

I've worked with graphic designers who intentionally like make sure they fill up certain hours before they share like designs, because they don't wanna set the precedent that, oh, something can be generated more, more or less quickly, you know?.

Mark Wainwright: 5:04

and in the, the, the, the world of artificial intelligence these days there's there's a ton of opportunities for things to be done a little bit faster and faster here and there, but unfortunately, that doesn't necessarily empty someone's plate, right? They just get more stuff thrown onto their plate. So.

John Tyreman: 5:18

that's true.

Mark Wainwright: 5:20

Here's another one. tracking utilization kind of ignores sort of the client experience. High utilization doesn't necessarily mean your clients are happy and satisfied, there's no measurable or recognizable connection between those two things. It doesn't say anything about the, it's not a measure of trust or interaction or communication or alignment with our clients and their goals. And utilization is completely internal, right? Your clients want you to be focused on them, but here we are focused on our hours time spent, all, all that your clients want to be, stay focused on the outcomes. And utilization doesn't necessarily focus on outcomes. It just, it focuses on how busy you are. Tracking utilization, distorts decision making.

John Tyreman: 6:04

All right, So what do we mean by this?

Mark Wainwright: 6:05

well, it's, it's, we, we assign people to projects. So-and-so's, not quite busy enough. This person's too busy. We start just start pushing hours around to keep everybody kind of equally billable, not necessarily in a way that serves clients best, serves the firm best, et cetera. Right? So that tweaks and distorts our decision making. Other types of activities maybe that are non-billable marketing, selling. Organizational improvement, process improvement, operations, things like that. Things that ultimately will benefit your organization internally and the clients that gets pushed aside in, in sort of, in service of, keeping utilization rates at a, certain level.

John Tyreman: 6:49

I've seen this play out culturally where, because there's internal meetings that talk about this and like, who's got enough hours? Do you have hours to take on this? This amount of work? Right? And then that creates this like culture of billable work is always and always will be more important than. Non-billable work when that that isn't always the case.

Mark Wainwright: 7:12

And associated with all that, we end up optimizing our organizations around utilization and not for client service or, ultimate sort of efficiency and effectiveness. Another one, tracking utilization can hide or obscure inefficiencies, if we're kind of enslaved to the utilization thing, we aren't necessarily paying attention to, oh, we did poor QC on this so that we have to rework it. We scope, at the beginning we scope things poorly so that, we're just focused on filling up hours and throwing more and more hours at the job or the project or the client. And it doesn't ultimately serve the client well. It shows how busy we are, not how well we're actually doing the work and serving our clients. The last one that I had written down here. When you lead with utilization,'cause effectively that's what you do really, pretty early on in this whole sort of consultant client relationship thing, the hours and time ends up dominating the conversation. So clients don't al always necessarily walk into these client consultant engagements thinking they're just buying time, but eventually that's what they're doing. They're just buying time. Right? And they're not really focused on. Outcomes, no one's really looking at the outcomes clearly enough. And, we're overly focused on just talking about how much time we're gonna spend on your, job, not what ultimately are we achieving and what are we creating together and what, what value is the client gonna get out this work together? So but to move on to the second one, John, and this. We are, we are in all parts of, of, of the universe here trying to avoid black holes. This one was an interesting one that you brought up, and it's the black hole number two, which is meeting bloat.

John Tyreman: 9:04

Yeah. So if we're thinking about. Time sucks and black holes meetings are a huge part of that, especially as firms grow time is a resource and time belongs to people and people working together to solve problems and achieve outcomes for clients. There are going to be a lot of internal meetings that arise in coordinating and collaborating, or at least that's the natural tendency. Of many firms. And so I was looking into this and I found some research from this, uh, SaaS product called fellow.ai, which is like a meeting transcription software. But they put out some good research and it showed that managers, directors and senior executives spend 30 to 35% of their work week in meetings. So think of like a dozen hours of your week. Every week is spent in meetings. another Archie app is another meeting software, but they also did a little bit of research. They found out that the number of meetings has actually tripled since 2020, coinciding with the rise of. remote work using Zoom conference meetings, things like that. I mean, if we apply the cost of salaries of our employees to these meeting times this research found that meeting time costs companies on average, 30,000 per employee per year. that's not including the time that's actually spent scheduling and coordinating and prepping for the meetings. That's just the meeting times themselves.

Mark Wainwright: 10:35

crazy. That puts, that puts such a, such a sharp point on that. So black holes of meetings, meetings have tripled since 2020. That's insane. Not to kind of say the obvious here, but John, from your perspective, why is this such a huge black hole?

John Tyreman: 10:51

Well, I think it's a huge black hole because on some level the capacity that you have to meet should be focused on your clients and the external marketplace. And actually in digging into this research, it, it, I found that it was internal meetings that caused mo more of this bloat than external meetings Did.

Mark Wainwright: 11:10

Okay. Yeah.

John Tyreman: 11:11

For this, it's, it boils down to a matter of if you, if you have a distributed workforce, then there needs to be a focus on asynchronous communication. And so can, can this meeting, could this meeting have been an email? Right. And that, that sort of old adage. So, yeah. I think most meetings are actually, they're, they're not really productive. They're more just touch bases and status updates, or it's been on the calendar every week for, however many years. And it's just what we do. It's part of our culture. What's the cost of your internal meetings and how can you lower that? I think that's one black hole that firms could take a look at.

Mark Wainwright: 11:48

Yeah, yeah, there's definitely an opportunity cost and I will say, just anecdotally, from my experience, I think I can be,'cause I have a, a reasonable number of meetings with, with, with my clients, but the vast majority of the meetings that I have are only 20 or 30 minutes long. Which it's still a meeting, but I'm not taking an hour of someone's time every time we get together when it didn't need to be that long. So, yeah, I try to keep things really sharp because I know, particularly when I work with practitioners who are trying to learn how to sell that the time they spend with me. Is really ultimately not as critical as the time they need to be spending with their clients and prospective clients. So I have to, make the effort to shorten the time with me so people can actually be out there, having conversations and, and selling their services. So yeah, that's case in point with me All right, so the third one here. That you put down is the shiny object syndrome.

John Tyreman: 12:49

We've all seen it, the shiny object syndrome. It's prevalent in entrepreneurs. And it's when the shiny object syndrome is when you see something new out there in the marketplace that you think could help solve a, a business challenge that you have or if we're thinking about this within the context of firms, but it kills your, ends up killing all of your focus and totally derails you. And I found some research from the Digital Marketing Depot and this was a survey that was done a few years ago in 2022, but I think it's still relevant. this survey looked at. Sales led organizations who went through a digital transformation initiative, so changing out some of their software, right? Their digital platforms, mostly their CRMs. That was the kind of the big focus here. CRMs and marketing automation platforms. And they found that 40% of these businesses changed their tech platforms that were less than two years old, two years. Companies are changing these technology platforms every two years. So why is this a black hole? Well, it's the illusion of productivity, right? We're gonna buy a new CRM so that we can be more productive with our sales resources. But if your sales process is not well defined, then a new CRM isn't gonna do you any good, right? So.

Mark Wainwright: 14:21

gonna, it's not right. Not a silver bullet for sure.

John Tyreman: 14:24

It also, uh, It gives you the illusion of leverage. And so that's believing that this new technology and investing in this will solve bad habits too. So it's not like you don't have the, if you don't have the process to find, that's one thing. But if your salespeople are not showing good habits or if they're not following the process the right way, a new CRM isn't gonna help with that.

Mark Wainwright: 14:47

Right, right. And, and, and it might even work in complete opposition to that, in that, if there's a new tool that's introduced it's complex, it's confusing. There's too many, too many buttons, there's too much,

John Tyreman: 15:00

yeah, that's true.

Mark Wainwright: 15:00

they don't get it. And when people get sort of confused and they they kind of resort to their sort of default behaviors, which a lot of times are not. Good behaviors. So yeah, this comes up all the time and you bring up the CM systems, there's a lot of technology systems out there that I, I think people perceive as these big solutions, these silver bullets, right? And there's a ton of them. CM systems are absolutely one of them. I remember a call I had with a. A senior most leader in a fairly large professional services firm. And this was kind of really early on. I can't remember if it was pre-contract or post-contract, but it was very early on in the conversation and I had actually been working with other people in the organization and this, this pro, I just had a scheduled conversation with this senior most person. And I wasn't 30 seconds into the conversation where. This, this person was asking me about the CRM systems, like what CRM systems should we buy? I was like, wait a minute. What? You're the number one person in this large professional services and you're talking to me about, about, software we're, this is not, this is, we need to be focused on something else.

John Tyreman: 16:08

Yeah. And it's not just CRMs either. I mean, it's, social scheduling platforms, it's research software. There's all sorts of bells and whistles out there that are these shiny objects that are just drawing us away from what really matters.

Mark Wainwright: 16:21

So true, so true. And I feel like we're gonna loop back to this at least a little bit'cause you had another one on your list here that kind of bumps, starts bumping into this, this, this shiny object thing as well. So,

John Tyreman: 16:31

we're coming up on a supernova black hole here. So the next one that we're, we're mo, first of all, we're moving away from these black holes that distract us internally. Suck away our time and focus and energy. Now we're gonna take a look at some of the black holes that are out there in the marketplace that the clients see as well,

Mark Wainwright: 16:54

You're listening to breaking biz dev

John Tyreman: 16:56

the podcast that beats up, breaks down, and redefines business development for the professional services firms of tomorrow. Your hosts are John Tyerman, founder of Red Cedar Marketing, the podcast marketing company for experts and professional services firms,

Mark Wainwright: 17:11

And Mark Wainwright, principal consultant and founder of Wainwright Insight, the fractional sales manager and sales consultant to professional services firms.

John Tyreman: 17:21

If you find this podcast helpful, please help us by following the show and leaving a review on Apple podcasts

Mark Wainwright: 17:26

and now back to the show.

John Tyreman: 17:30

the hourly billing rate. So, mark, tell us why is the hourly billing rate a black hole?

Mark Wainwright: 17:37

Well, thi this is, this is very close to utilization. These two things are associated, but they are. They are different. And just to differentiate the two, so you know, hourly billing is we are going to assign a particular dollar amount to this person's, time to an hour of Bob's time right? Is going to be$300. I had, we had an, I had an interesting conversation at a, at, at a with one of my clients recently and we, this, this topic, there was an email that was flying around that says, oh, so and so and so should have a$300 billing rate. Then there was some, there was an email tennis match going on, between everyone saying, oh yeah, absolutely. It was like, oh, clients aren't gonna pay that. It's like, oh, so it was, and it happens, and this conversation happens a lot. Particularly, when you're in planning for, future years, annual planning, things like that. When you go through this sort of, well, we have to increase our rates, that, that kind of a thing. So we're talking about. Assigning a dollar amount to an hour of time, right? So that's what this hourly billing thing is. And fatal fly number one, it, it ties value to time, not results, right? So again, this is, not a radically different conversation from utilization, but you know, they are, they are very, very close. So, associates value with time not results. Clients don't wanna buy hours, they want to achieve some outcome, Buying hours says time is the product, not your actual sort of expertise. It's just the time. The faster you work, the less you earn. That's all you, you like all those things, right? Are, kind of bad news when it comes to the billable hour. There's another thing that I talk about quite frequently. Is that it creates this, this automatic and kind of almost built in sort of conflict of interest, right? Right off the bat, you wanna start charging more'cause you wanna throw more hours at something and maybe rightfully so. But the clients want the exact opposite. They want the polar opposite, right? They want to get what they want to get faster. They want their outcomes faster, and they want you to spend less time on it. So all of a sudden now you're locked into this. Billable hour thing where the client wants you to spend less and less time on it. The client wants you to be innovative, they want you to be creative, they want you to be efficient, but you don't want those things because that means if you're billing them by the hour and you're spending less time doing it, you're gonna make less ultimately. And that's not good. So it creates this, this friction point. And ultimately, in a client consultant relationship, any kind of friction starts to erode trust. So that's a problem.

John Tyreman: 20:16

Yeah. That's amazing. Major misalignment.

Mark Wainwright: 20:18

Right, right, right. This, this next one is, is associated with something I said earlier. Is it, it penalizes experience? Right. So people who are really, really good at something who have a a, a reasonably high billing rates can solve things dramatically faster than than others can, but the end result is good for the client. You spend less time doing it, but bad for you because you suddenly made less money. So, and, and you can run your little, your little spreadsheet there and you figure it out. So yeah, that's, I mean, if it takes, it takes experienced Bob, two hours to do something that it would take, an inexperienced, junior staff member, 10 hours to do. Which, do you make more money one way or the other? So it's, it's, it's a conflict In most other fields, and most, most other industries, mastery and expertise are rewarded in this situation. When we're talking about Bill the billable hour, they are not. So that kind of caps your growth, which is another point here is that if you are building your organization, based on these sort of building blocks, you know these bricks, like the ones behind you, John, these bricks of, of the billable hour. How fast can you actually grow that thing? Can you actually scale it? Can you, can you start to, five x or 10 x your organization? Can you actually grow that quickly if you're constantly, you're trying to. Kind of add, add time that you can then bill, which means you're adding more people when you're, which you're adding more costs. So there's the rub there, right? Capture growth, it can, doesn't let you scale because in order to bill more hours and grow, you have to add more cost. So you don't actually ever scale, you don't double your margin, triple your margin, whatever else. So that's.

John Tyreman: 22:09

a pretty doom and gloom picture here,

Mark Wainwright: 22:11

Yeah, well, that's, that's part, this is a deep, dark black hole, John.

John Tyreman: 22:14

Yeah.

Mark Wainwright: 22:15

and, yeah, I mean the, you're the analogy, the analogy fits, right? So, so, and, and I guess the, the, the, the last bad point I wanna make about this is that the rest of the world has kind of totally moved on from this, right? I mean, the, the SaaS companies, manufacturing companies aren't focused on. Any of this stuff. They're, they're focused on efficiencies and process improvements and they price by outcomes, not these inputs. So professional services are lagging behind just about all industry, industries out there. So what can we do? Just to put a fine point on this there's a bunch of things we can do. We can refocus ourselves on the billable hour in time to value and focused on client outcomes, right? We can rethink pricing models instead of just billing hours. We can do just basic, straight up fixed fees, retainer models, subscription models, different hybrid models that explore pricing differently, that really show we're focused on outcomes and value, not necessarily just the billable hour.

John Tyreman: 23:15

Yeah. You get creative though, right? I mean that, and that's the challenge,

Mark Wainwright: 23:19

you do need to get creative. And this means, unfortunately, rethinking the foundation, right? Because like we said, these billable hours are the foundation, so rethinking this, right? So we need to think about different metrics rather than just as we touched on it earlier, utilization. Let's focus on sort of cycle time or throughput, right? Throughput is output and flow. Like, what is the, how quickly are we generating this work and what is the quality of it and not just time spent. So, it's, it's there, there's a bunch of different ways that you, client satisfaction. We can determine our kind of ultimate success focused on the client and their happiness and satisfaction with it, client retention, other things like that. We can avoid rewarding busyness and have all, all of our metrics, all of our success indicators focused on clients and client outcomes.

John Tyreman: 24:13

Yeah.

Mark Wainwright: 24:14

And hopefully, we can start doing some of these small, changes now and we can start to iterate and improve. On things as we go, rather than just feeling like we're stuck in the mud. We gotta build the hour, we gotta focus on utilization and some experimentation and innovation need to start happening in firms so that they can, figure out their, their way out of this nasty big black hole, John.

John Tyreman: 24:45

This is a big one. Yep. And like we mentioned, it's gonna take some creativity for firms to kind of step out of that comfort zone of measuring time because it is, easy and readily available and kind of intuitive to, to take a look at and price that way. But to your point, packaging services and different ways and fixed fees and retainer models, subscription models. Yeah, we've, we've talked about this on many different episodes in the past, but yeah, this is a big one.

Mark Wainwright: 25:15

So we've, we've, we've definitely discussed it. We are re-skinning it today as a massive black hole and it is for sure. Alright, John, you had a last one listed here. And this is a, a another, like I said, I think this one is adjacent, adjacent to the shiny object, syndrome. Yeah, but sometimes it's even bigger than that. This one is social media.

John Tyreman: 25:40

Yeah. Social media is really a double-edged sword, right? Because on one hand it's an efficient way to. Network with your target audience and grow relationships. But on the other hand it's a time suck, right? I mean, how, how many times have, I don't know about, I can't speak for you, but I've, I've logged onto LinkedIn to do something and then lo and behold, 10, 15 minutes goes by and I'm like, God damn. Like, where did that time

Mark Wainwright: 26:06

Yeah. Right, right.

John Tyreman: 26:08

But it, it's, it's a major source for of business for my firm. So, you know that, that's that kind of double-edged sword. So how do you make most effective use of social media? How do you turn it from a black hole into, I don't know. wormhole to your destination. Right.

Mark Wainwright: 26:27

yeah.

John Tyreman: 26:28

I, I did some research and I, I found this from an Edelman study in 2024, they found that 54% of C-level executives spend an hour or more per week reading thought leadership content on social media. And here's another stat. According to Hinge Marketing's high growth study, 53% of high growth firms have an active focus on both networking and creating content on social media.

Mark Wainwright: 26:55

Yeah, so that, so that says to me that, there's some eyeballs on it and it's, it's, it's a worthwhile venture.

John Tyreman: 27:02

It's an investment. It's a worthwhile investment. It's an opportunity but you need to be aware of the gravitational pull that it has. so what firms do, I think this is where we talked about focus in the past, and I think focus is a big thing when it comes to social media, maintaining a focus on the task at hand, whether that's prospecting, list, building, creating content, researching your target audience, engaging with your target audience. These are all different activities on social media, but being focused on what the task is at hand. I think we'll help you from getting sucked into the void of the videos and the feed. And there's this 90, 91 rule, which is kind of common among social media marketing circles.

Mark Wainwright: 27:50

a minute. Did you say nine 90? Wait, 99 1.

John Tyreman: 27:56

99 1, I think we're adding up to a hundred, but essentially this is on any given social media platform, 90% of users passively consume content, while 9% of users occasionally create content or engage, and then 1% actively engage in creating content every single day on these platforms.

Mark Wainwright: 28:20

Yeah.

John Tyreman: 28:20

So that's the the breakdown there. And I think for when firms are going through and thinking about social media, do you want to be part of that 90% and have the social media become a gravitational pull and pull you away, or are you going to be part of that one to 10% and actively engage on social media and focus on the tasks that actually move the needle?

Mark Wainwright: 28:44

let's wrap it all up here, right? How do we escape the gravitational pull of these massive black holes? We unfocus on these stupid, unimportant, distracting, metrics that a lot of times are internally focused, check and check boxes, having too many meetings, utilization and refocus on what's most important, the right metrics, the right people, our clients, our prospective clients. So unfocus on the things that are unimportant, refocus on the things that are most important. All right. This was, this was fun. We, yeah, there's a lot of, there's a lot of time sucks. There's a lot of black holes out there. John, I think this has been a, a fun one. Thanks for joining me on our discussion about Black Holes. Until next time.

John Tyreman: 29:27

Until next time.