This blog post was written by Kicksaw Co-Founder Kenny Goldman and Director of Operations Casey Long.
Tried and true methods are worth paying attention to. It’s often more effective to take a successful company playbook and replicate it, rather than try to reinvent the wheel. It’s practical, it usually works, and no one will fault you for applying an already “winning” formula. But sometimes, convention no longer serves. Or, even worse — convention masks a systemic problem (did you know that 50% of traditional CRM implementations fail?). In those cases, it’s time to try something new.
In the early days of Kicksaw, we knew our customers and employees were looking for something different. Kicksaw was founded upon the idea that we could build a truly client-centric services business, while also creating a company where team members thrived. We wanted to do something audacious.
The standard playbook for small consulting businesses is straightforward. Clients are given detailed, itemized statements of work, centered around billable hours. “Resources” (AKA our people) are assigned to projects, or portions of a project, and are optimized for individual utilization. Each employee is viewed as a resource. The more they contribute, the more revenue the business generates. This simplicity is enticing, but has its drawbacks. Incentivizing utilization often creates bad incentives that negatively impact the customers and employees.
When priorities are being set, resource utilization and customer value can clash. Unfortunately, customer value tends to lose out to utilization because consulting businesses emphasize profits over customer outcomes. To counter this, these businesses lean on metrics to complement utilization, monitoring things like budget and schedule burn. But at best, these are poor indicators for value provided, and always take a back seat to utilization.
Separately, an emphasis on utilization places enormous strain on delivery teams. Resources are often over-assigned to appease dissatisfied customers, or shuffled abruptly to fill a utilization gap.
Furthermore, many consulting businesses place utilization targets on managers. Customer needs always take priority, which limits opportunities for professional development and growth. At Kicksaw, we’ve seen examples of other firms who expect managers to bill 30 hours per week while also managing a team of up to 10 team members. This is a fast track to burnout, and it’s rife within the industry.
In the early days of Kicksaw, we decided that this model wasn’t for us. Our view was that empowering teams to own a book of business, prioritize work the way software product teams do, and focus on customer value would build a stronger consulting business with happier customers and employees. And that’s been exactly the case!
In 2019, we brought our Fractional Sales Ops model to market. The first move we made was to structure our delivery organization into a set of teams called pods. A given pod works together on a single book of business, comprising 5-6 clients at any given time. The pod is a cross-functional team with a Salesforce project manager, a solution architect, and a consultant doing the bulk of the hands-on-keyboard work.
In the traditional model, resources and clients are pitted against one another based on whatever client is most in need at the moment. At Kicksaw, the pod is autonomous. Our pods, in partnership with our clients, are responsible for controlling the pace and prioritization of their work. We use simple metrics to measure the output of work compared to their client’s contractual commitments. This builds tremendous rapport and autonomy within pods, which leads to better client outcomes. Decisions about prioritization are not made in a vacuum, because all of the stakeholders involved are making them together.
We structured our contracts into what we call the Fractional Sales Operations model, combining the best of the traditional managed services and statement-of-work-based approaches with our own philosophies. Kicksaw clients pay a mix of a monthly project management (PM) fee and consulting hours consumed. The PM fee covers project management, discovery, and solution design, along with specific enablement functions. The engagement runs on a month-to-month basis, which allows us to focus on value-add work rather than an arbitrary deadline that will become stale shortly after project kick-off. The hourly costs incurred are for the actual buildout of features and solutions. We work to set expectations with clients around how long a given project will last and how many hours will be required. That said, customer needs often shift as their business evolves, and our most successful projects will run in perpetuity. Our ability to be nimble and respond to customer needs sets us apart. Contrast this with other firms who require changes to scope to move through an arduous change-order process. The beauty of our model is that, when requirements inevitably shift, we expect and welcome it.
An easy trap for all consulting firms to fall into is the role of an order-taker. Clients submit a ticket, the solution is built to scope, and everyone moves on. This often doesn’t work out well for customers, because sometimes the right answer is to do nothing. Structuring our model to include PM fees gives us the confidence to push back on customer requests that don’t set our customer up for success.
Pods report against an overarching project plan and timeline, but more importantly, we have ongoing discussions with clients about value provided compared against costs incurred. Most clients settle into a rhythm with their pods where the level of output becomes fairly predictable, and they view their projects as ongoing product roadmaps where new functionality is rolled out consistently month over month. In a traditional statement-of-work-based approach, consultants do their best to estimate the total effort of the project. Baking in an overhead calculation for things like project management and solution design work well for project scopes that are completely static. Typical estimates are 10% for project management, which is far too light to be able to support companies through digital change. In today’s business environment, requirements are ever-shifting, and customers have come to expect more flexibility from consultants. The Fractional Sales Operations model affords that flexibility, and in turn, provides more value.
Additionally, this structure casts internal conversations of delivery performance and success in a new light. Instead of tracking utilization metrics, managers and pods are encouraged to approach their book of business with an entrepreneurial spirit. They have the flexibility, and our trust, to prioritize the projects in their portfolio based on their assessment of the “facts on the ground.”
As a services business, we make money by charging our customers for our expertise and effort. In some ways, the difference between our model and the status quo is subtle, but the outcomes for our customers and employees are significant. Stakeholders benefit from a more modern approach, where focus on value for customers and employee outcomes are paramount. As we continue to grow, new challenges will emerge, as they do for every dynamic enterprise, but the confidence we have in our model won’t waiver. We are never going back to the status quo.