Founder in Eleven

One major difference between consulting and contracting firms is “the bench,” or the status resources are referred to as they are between engagements.  The phrase itself comes from sports, where resources on the bench are available when needed for the game, but too often has a negative connotation when compared to team starters.  “Billable” versus “unbillable” could also be used, but “the bench” implies more of a full-time unbillable role, as opposed to a resource that might only be unbillable for a portion of the day or week but the majority of their time is on billable activities.  

A similar term often thrown around is “the beach,” which some firms use interchangeably with “the bench.” However, “the beach” implies and even more negative connotation: that the unbillable resource is in some type of vacation mode.  A firm that uses “the beach” is easily identifiable as one that does not value unbillable resources. “Embracing the bench” focuses on the idea that it is good to have resources available when needed, versus the negative connotation where unbillable hours are to be avoided at all costs.  This post will discuss a strategy of embracing the bench for the long-term benefits of career development, client service, and long-term profitability.

Billable before Unbillable, but Don’t Get Greedy

Embracing the bench does not mean prioritizing unbillable hours over billable hours.  Most service firms are driven by billable hours and experience the following advantages over nonbillable hours:

• Billable hours drive revenue and can be seen as making individual employees profitable
• Billable hours drive client deliverables to successful completion which leads to referrals, additional engagements, and additional revenue
• Consultants typically receive better career experience on client projects than internal projects
• Billable hours give employees new experiences, which can include additional practice in technology and business

Given the above, founders and executives too often get caught in the “more is better” mindset  that all billable hours are better than ever having unbillable hours.  Too heavy a priority on billable hours can result in:

• Poor company culture – A negative connotation of being on “the beach” or “the bench” gives unbillable resources, who are very often not to blame at all for lack of assignments, a feeling of lesser value than billable resources.  In the worst cultures, the attitude between billable and non-billable trickles down the ranks.
• Bad projects/assignments – Given a firm’s focus on billable hours, any and all projects or assignments may be accepted even when there is no long-term benefit for the resource or the firm.
• Under-delegation –Consultants work additional hours and overtime rather than have extra resources available for delegation.  See my related post on solving the under-delegation problem.
• Just-in-time hiring – Resources are not hired until they are needed by clients, which leaves projects constantly over-sold, under-staffed, and behind schedule.

Embracing the Bench and Unbillable Time

Embracing the bench allows founders or executives to align the long-term career goals of the consultants with the long-term financial and cultural goals of the firm.  Having resources available that are not currently billable or responsible for client deliverables provides:

• Efficient training – Developing resources before they are needed can be done efficiently with classes of consultants. 
• Time for research and development – Having employees build knowledge in new products, business practices, or technologies that clients aren’t asking about today but may in the future.
• Time for marketing and sales – Having employees assist in promotional efforts for the company.
• Just-in-time staffing – Having staff immediately available results in more billable time as staff can be added to projects day-of rather than having to wait for hiring/training of new resources.

Founders should take a step back and address both billable and unbillable assignments from the perspective of the consultant rather than just on the financial goals of the company.  Consultants don’t always want to be “heads down” for a client as many will want to get involved in other efforts within the firm.  With a goal of career development in mind, the bench can provide:

• Experienced resources the time and focus to go deep on research and development efforts to create knowledge for the firm.
• Experienced resources the time and focus for their own career and skill development while still being billable part-time on client projects.
• Experienced resources to gain marketing and sales (proposal) capabilities while developing long-term pipeline for the firm
• Experienced resources to train and supervise inexperienced resources on research and development efforts to improve supervision and communication skills
• Inexperienced resources to train and develop skills without the client pressure and deadlines of billable efforts.

For experienced resources, one of the greatest drives to turnover is the need for work variety and the appeal of leaving the firm for a new company that offers experience with new technology.  Allowing experienced resources to supervise as well as work on research and development can avoid turnover and be consistent with an experienced resource’s long-term career goals.

Quick Fix – Embrace the Bench During the Daily Huddle

From a TSG perspective, we began embracing the bench early in our history.  Combined with our focus on college hiring as well as work/life harmony,  we found some benefits of the bench to include:

• Technical architects getting time away from the client to work on R&D initiatives
• Staff getting trained and ready to help on billable projects,  critical R&D, and sales efforts
• A reduction in recruiting expenses by not waiting until staff was needed to hire and pay for expensive headhunters or recruiting efforts
• TSG never having individual billable goals, and given the availability of resources on the bench, never having an issue with under-delegation
• Cultural benefits of having staff working together on R&D in preparation for projects without the pressure of client deadlines and technology directions

Combined with the right staffing focus (see related article on the daily huddle for advice on staffing), the TSG bench did not have a negative connotation and was viewed by the team as a strength rather than weakness.  During the huddle, we would bring up the unbillable resources and would talk about opportunities in R&D and for billable clients.  With the consultant’s mentor and product managers as one team in the huddle, we would brainstorm what would be best for the consultant, client, and company, focusing on the best outcome for all three.

For those wondering, TSG typically averaged about 70% billable hours counting all hours (vacation, holiday, etc.) across the firm. The highest billable percentages typically came from the 1- and 2-year consultants (90%+), with managers and experienced resources typically averaging around (50%+) as their time was spent on R&D, product development, and sales efforts.