Tuesday, April 23, 2002

More on the combination of misinformation and the expectation that you blindly adhere to it: when asked at a company meeting what the maximum revenue potential is for a given month (especially relevant question, considering the fact that we've lost about 25% of our billable resources in two months, and 45% in the last year), our president stated that it's pretty simple: take billable rate times the number of hours in a month times the number of billable resources. Of course, he joked, that means you don't take vacation or get sick, but that's still the maximum. Heh heh. And he's absolutely right, for any individual. Collectively, for the organization, that number is impossible to achieve. Projects don't stop and then start again cleanly. Some resources have more "in demand" skills than others. People do take vacation, or get sick. I figured a more conservative number -- again, for the organization -- of 80% of the president's calculation. Then I compared that to history: how did we actually do, for each of the past 34 months (that's as far back as we've been tracking time with our internal project management system). We did better than 80% of the maximum only seven times. At best, we were able to hit 90% of the maximum, but only twice in 34 months. The more accurate estimate for the company would be that in any given month, we determine revenue using the following formula : (billable rate) * (billable hours) * (billable resources) * 75%. Of course, this might not actually be misinformation from the president. He might believe that the company revenue target really is as simple as rate times hours times resources. In that case, though, we're looking at a combination of ignorance and arrogance, which is maybe worse than misinformation and blind allegiance. 9:08:15 AM