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Archive for July, 2011

One of my close, personal friends is a “Talker”, so I write this post with love…

The “Talker”

Definition: A consultant who rambles on and on about anything and everything…and can talk you into oblivion (without noticing). This consultant is the type of person you can ask a question of any topic to, and you can count on never hearing “I don’t know” as the response.

% of consultants that exhibit this trait: ~1 in every 100 consultants

Detailed definition: This consultant can go on and on about any topic. They are happy to divulge their opinion, a family member’s opinion, or even a friend’s opinion on the subject. Sometimes, they even give you your opinion. This type of person is gifted with acumen…they have great knowledge that they either: 1) acquired from past conversations (and retained with an elephant-like memory), or 2) Googled and stored in the “vault”. When you get them going on a topic that they particularly like, it is referred to as “geeking out”. I often wonder if these folks are insomniacs – I don’t understand how they have time to learn everything about everything.

Example 1: As stated above, one of my close, personal friends is a Talker. Some have affectionately called him “diarrhea mouth” behind his back. He especially gets going late at night after a few beers. I can’t help but love him…he can ramble for an hour on a single topic, but he also has many other wonderful qualities that make him an excellent friend, especially the gift of techie knowledge. We often geek out together over our newest i-gadgets.

Example 2: A consultant at my firm is also a Talker, and because I am not a personal friend of his, his rambling often annoys me. I was first introduced to him on a project by way of gossip. Consultant friends were discussing a game they liked to play with him. When he came over to one of their cubes to fulfill his word quota for the day (one of the four or five times a day he did this), they would play the “timer game” with him. It would start with a question about a random, inane topic. His response would get secretly timed. Then the consultants would compare notes to see which topic he talked longest on, and that person would “win”. A variation of this game involved asking sequential random questions to see how long he could talk before getting interrupted by the client. While he was talking, they wouldn’t even look at him – they just continued working on their laptops, nodding from time to time to keep him going. For whatever reason, he didn’t mind – he would continue to look at them as he kept talking.

Why would a consultant behave in such a manner?

These people have no awareness whatsoever of their affliction. They may hear people snicker and joke directly about their lengthy conversations, but they seem genuinely surprised – as if it’s the first time they’ve been told they talk “a lot”.

How do you know when a consultant is a Talker?

At first, when you’re just meeting a Talker (and blissfully unaware), you politely nod and continue with the conversation although you don’t particularly care for it. Then you look at your watch and 15 minutes have disappeared…and the subject is still the same. An hour later, you are looking for someone to bail you out, or you suddenly “have to go to the bathroom”.

What can one do about Talkers?

These consultants are harmless. Although they have the gift of gab, they are generally sweet people who trade off their rambling with excellent technical knowledge that will save you in a tight spot. If you get caught in their avalanche of words, make sure you have an out (or your cell phone so you can text an S.O.S. message to a colleague).

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I’ve been meaning to do a series of posts on the characteristics of real-life consultants for a long time now. Unfortunately, a combination of travel, stressful work, and plain laziness has contributed to the delay. Therefore, enjoy my first “consultant profile” below…many more to come!

Warning: this first post is combined with a few, long soap box rants…

The “Over Biller”

Definition: a consultant who routinely over bills the client for hours “worked” by either them or a person who reports to them. Note that this only applies to project work that is charged on an hourly basis.

% of consultants that exhibit this trait: this is a little tricky, as this group is pretty quiet about their offenses. But I would venture to say, based on what I’ve seen, that ~1 in every 20 consultants is an Over Biller. All I can say is a big SORRY to those of you clients who have been knowing or unknowing victims of their crimes. 😦

Detailed definition: given that a typical consultant work week includes 40 hours of billable hours, this person bills the full 40 although they actually worked less than the 40 billed. Or they charge overtime which they didn’t actually work. Note that “actually worked” is a somewhat subjective term here, as people differ in their definition of productivity. We’ll just keep this simple and say that “actually worked” = “worked with honest effort”.

Now let me pause here and say that not every project and/or client is affected by the Over Biller. Only projects that are costed on an hourly basis are affected by this situation. These are often known as “time and material” projects.

Note that there is another kind of project called a “fixed bid”/”fixed cost” or “milestone-based”/”deliverable-based”. It is not affected by this, as it is costed on a preset amount of money per project or deliverable/milestone. In the latter situation, the client pays you X amount no matter how many hours it takes you to get there. You have an agreed upon set of deliverables and a fixed deadline, and the consulting team has to figure out how to manage their dollars and resources to meet the agreement. I’ll speak more on this later in this post.

Example 1: I used to know an Over Biller who would routinely ask the Project Manager how many maximum weekly hours he was allowed to bill, and then would submit that entire amount every week, even though he was clearly not working all of them. And when I say “clearly” – he would show up for a half day on travel days (2 days a week), be onsite for 9 hours the other 2 days, be completely unreachable on Fridays, and could be found at the bar every night after hours (no exaggeration). And while he was onsite, he would make personal phone calls for at least an hour each day, and go out for an hour-long lunch too (which was not a working lunch). So if you do the math, 40 hours billed roughly equated to 24 hours “actually worked”. Obviously, this guy had multiple personal issues going on. Luckily, this guy no longer works for the company I worked at. His reputation eventually caught up with him.

Example 2: I know a different consultant who over bills in another way. He may be onsite for 10 hours a day and bill for those 10 hours, but he spends at least 2 hours of each day jibber-jabbering about non-work topics. This person is also classified under the consultant profile “The Talker” (highlighted in a future post). It can be argued that this is not true over billing, but I am trying to highlight the various aspects of this profile – I’ll let you be the judge.

Example 3: One of my past project managers fit this profile by way of “management over billing”. He questioned me for charging less than 40 hours for a particular week, which was the true amount of hours I worked. He then requested to reject my time sheet so I could submit a full 40 instead. (Note that he did not ask me to make up the hours in a future week.) He then went on to explain how by charging less hours than budgeted for the project, I was robbing myself of a good bonus. I almost lost my cool during this conversation. We resolved the situation by submitting the time sheet with less than 40 hours, and I promised to work a minimum of 40 hours (and charge accordingly) in the future.

As you can probably guess, the Over Biller is someone I do not care for. Not only do I think that over billing is unethical, but I do not hesitate to call Over Billers thieves. They are literally stealing from companies, by robbing clients of money that was not fully reciprocated with services. Unfortunately, unless someone watches them and is onto their tricks, they can continue getting away with their offenses.

So, the question I have to ask here is: why would a consultant do such a thing?

There are actually multiple reasons for this, but in the end it seems to always come down to money.

A quick “101” on consultant bonuses: At most consulting firms, consultants accrue bonuses that are based on utilization. Utilization is the direct formula that indicates how billable you were in a period of time. For example, if a month has 4 perfect weeks in it with no holidays, that is 160 hours of potential billable time, 40 hours per week x 4 weeks = 160 total hours. If a consultant bills 160 of those 160 hours, they are considered 100% utilized for that month. If they bill 120 hours, they are considered to be at 75% utilization, and so on and so forth.

Now, the formula for bonuses is not always black and white. At my last consulting firm, the formula was based a little on utilization. The rest of the formula was completely subjective, based on a group vote at the end of the year .

At my current consulting firm, it’s completely black and white and based wholly on utilization. Based on each individual’s compensation plan (yes, they vary by consultant here), your bonus is based on a threshold of hours and an amount per hour over that threshold. So, if my threshold is 120 hours and my agreement is to get paid $100 bonus for every hour beyond that threshold, in a 160 billed hour month, my bonus would be (160 – 120) * $100 = $4000. This bonus is on top of my base pay.

Back to my soap box…so you can see the sinful attraction. If a consultant chooses to over bill, they stand to gain potentially a lot of bonus money on a regular basis. And the consulting firm also wins in this situation (barring actually getting caught), because they are getting more revenue for each hour the consultant bills.

But sometimes it’s not always the consultant’s fault. Sometimes companies tell their consultants to bill 40 hours every week, regardless of what they actually work. This is also known as a “straight 8” or “professional hours”, amongst other terms. The “straight 8” can work out to a wash, if a consultant actually works less than 40 some weeks and over 40 other weeks, but only bills a straight 40 each week.

How do you know when a consultant is over billing?

It’s difficult to tell, which is why people get away with it. In a virtual world, it’s hard to know when a consultant is truly working and when they are not. I know a few night owl consultants who are onsite for less hours than they seem to bill, but then work a few hours from hotel, thereby not actually over billing.

Usually, the symptoms manifest themselves when certain aspects of the project are not going well. For instance, one area of the project could be behind schedule (because a consultant is billing for false time and therefore not getting their work done). Or the quality of work is lacking for a particular person, obviously because they are not putting in the budgeted amount of time to deliver a quality product.

Or sometimes you can just tell…because you actually see the person surfing the internet for long periods of time on a frequent basis. Or perhaps they are billing crazy hours, like 16 per day, and yet you don’t see emails from them at all hours of the night, nor do they seem particularly tired.

But there could be other, more likely causes for the above reasons as well (i.e. incompetence). It is hard to say.

It is a rather interesting situation for clients in today’s consulting world, and I don’t envy their predicament. You, as the client, want to make sure the project you’re managing is delivered on time and to your specifications, AND at the agreed upon price. But you don’t want to be a clock watcher or a micromanager, or simply NOT LIKED by your consultant team. So instead of watching for the signs above, you implicitly trust that your consultants are being ethical. And you keep paying the bills and hope for the best and choose to pick other battles.

To be honest, I personally think this is the right approach. Some may argue that it’s naive – but this is the type of client consulting firms love to work with, and usually have fantastic, long-lasting relationships with. As long as you’re tough during the project bidding process and go through the contract and timeline with a fine tooth comb, you have done your best to mitigate most risks up front.

So to avoid this issue…why don’t all clients force milestone-based/fixed bid types of projects?

To bring back this point from earlier in the post…there is this other type of project that does not allow consultants to bill by the hour. But, honestly, from what I’ve seen, these types of projects are not successful for the client. And they force consulting firms to lose profitability, as they are usually grossly underbid to win the deal. I hardly see these projects, and I have dreaded the ones I’ve been on in the past, as they have ended in failure.

Since consulting firms have a commodity that businesses are willing to pay for – expertise about some thing – consulting firms have the upper hand and can usually control the terms of the project.

What can one do about Over Billers?

From a client’s perspective, I am honestly not sure what your rights are. I imagine the one trick you can play is to bet against the consulting firm’s reputation. Word of mouth is essential to a consulting firm’s revenue plan. Therefore, you could theoretically ask that the consultant be removed and then explain your reasoning why. (Then mention that you refuse to endorse the consulting firm’s reputation because of their unethical practices.) But you really need to have hard evidence (which is difficult to come by), or else your own reputation is at stake.

One other option – as some past clients have done – you could force your consultants to bill only the time they are onsite. But this actually can create more issues, as it will most likely conflict with the consulting firm’s policies. And if a consultant is surfing the internet for long periods of time while onsite, then this really doesn’t fix the root of the problem. Finally, consultants hate you, and you may get less than stellar consultants on your team because the good ones refuse to work on your project.

What can consultants do about Over Billers?

As for the other side of the fence…as a consultant, I personally feel that there is not much I can do about Over Billers. It is challenging to come up with hard evidence against them, and tattling on another consultant can blacklist you quickly in the community. Unless you’re in a position of management, your hands are tied. If you tell your company, you could risk getting fired. If you tell the client, you pretty much will get fired.

In the past when I was a manager, if I saw one of my employees over billing, I would confront them, reject their time sheet, and force them to correct their hours before the invoice went out. I would make sure that I had at least one witness from management before I confronted the offender. This did not make me popular, but at least I could sleep at night.

I have thought long and hard about Over Billers and what to do about their situation. Sometimes I wonder if I am too eccentric on this opinion. If an Over Biller gets their work done, and on time, does it really matter? Perhaps the overage is just the premium paid for the “cost of doing business” with an expert?

Well…perhaps.

But my uptight self still refuses to believe this. Because there is a direct correlation between hours billed and project cost, I refuse to take any other position.

So, for now, I occasionally work side by side with Over Billers, and keep my mouth shut (I am no longer in management). I do my best to set a good example and speak openly about how unethical over billing is. If a project manager or my company challenges me on lack of hours billed, I challenge them back (and have luckily not lost a battle to date). When I hear about suspected Over Billers I pay attention and form my own opinion. I try not to gossip about my findings.

As long as I work and bill an honest 40 hours a week, I find that my boat stays afloat just fine in the business world. And I work hard to make sure my client gets the most out of my billable time.

To the consultants out there who join me on my soap box, I applaud you. Keep up the ethical, honest work!

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