January 11, 2024

The Art of Operational Excellence: 4 Key Lessons for Growth

Jani Folland
Managing a professional services firm is no easy feat, with competition for both clients and talent, maintaining profitability, and keeping your people happy. However, it doesn't have to be an uphill battle. Investing in operational excellence is key to achieving long-term success and growth. Let us share with you our four fundamental lessons on what drives operational excellence and people's happiness in professional services firms’ operations.

Professional services firms thrive on the thinking of their talent: their insights, skills, and out-of-the-box thinking in solving the challenges of today. But placing such talent in the wrong setting burns the spirit of the professionals as well as your profits.

What I learned from my years in leading consulting agencies and businesses in the UK, Nordics and EMEA is that to build an environment that nourishes the creativity and growth of the people in it, professional services firms need operational excellence. When you design your operations and your organization to weather any storm, people first, you are equipped to see beforehand any issues and prioritize impactful actions that keep the consultants happy. It is the standard your company needs to strive for at all times because at its best, it creates a virtuous cycle of more enjoyment, stronger customer relationships, and business gains.

What should you focus on to transform operational mediocrity to operational excellence? This blog post examines the components of operational excellence and what I have learned to look at in leading high-growth consulting firms.

Lesson 1: It All Starts with Utilization 

If you want to drive operational excellence and ensure your professional services business is profitable, you must track utilization. Utilization rate is the amount of employees' work time that brings in revenue but at the same time you can follow it to ensure balanced workload. By allocating and managing people to projects in the most motivating and efficient way possible, you can maximize your company's productivity by reducing the direct costs of labor and maximizing people's motivation, performance, and customer satisfaction.

To build operational excellence with utilization, you have to align the right people with the right projects at the right time. It is a balancing act that keeps you from overspending and burning out the people by utilizing each person’s skills and seniority to their fullest capacity. While 100% utilization rate is impossible to obtain, you can neither underwork or overwork people, since it can lead to issues in projects, processes, and ultimately eats your profitability. Overutilization can increase the risk of burnout and create a sense of urgency that can be detrimental to both employee and client happiness. Additionally, one person's high demand can create bottlenecks for other projects, leading to further delays and challenges.

Balance starts with knowledge. To operate with excellence, make sure that you always know: 

  • The costs and rates of the people for you and for the clients
  • Everyone’s current level of utilization
  • Consultants’ future availability
  • Alternative profiles to the preferred individuals
  • People's desires and interests

Lesson 2: Cross-team Collaboration is the Source of Accurate Action

Achieving operational excellence in professional services firms is heavily reliant on improving cross-team collaboration. This is where your operations play a significant role: they need to ensure that the firm and all its units are succeeding together, not just individual departments. The biggest threat to this is siloed data and teams. 

Typically, organizations operate vertically in silos, which hampers business planning, collaboration, and transparency. When you lack visibility into the interconnected factors that impact your delivery capability, you risk that your right hand and left hand do not work in sync. Sales might commit to customer projects without understanding the impact on the delivery team or project managers promise individuals to projects without knowing their time, desires or contractual limitations. 

Overlooking key aspects of your operations can lead to inefficiencies, lack of motivation, and the danger of underdelivering to your clients. To avoid these mistakes, it's important to prioritize transparent data sharing and establish processes and tools that facilitate cross-team collaboration. Without an accurate view of your operations, any decisions made will be based on incomplete information, putting your people and business at risk.

Lesson 3: A Single Source of Truth Fuels Your Business Growth

The benefit of working across teams is sharing data and insights, which is pivotal in operational excellence. Because the more accurate the data is, the more informed and timely decisions as well as smooth processes you can enjoy.

To achieve data transparency, consider centralizing and standardizing your data in a single source of truth. This ensures consistency across teams and provides people with a complete overview of the company's performance. To make this simple and to get to data-based decisions faster, use tools and software that automate and visualize reports and empower people to act with confidence. This way you spend your time smarter: quick decisions based on chewed data take less than various meetings just to understand the raw data. Plus, you get to deal with excitement rather than frustration.

Data transparency is also a key ingredient in improving utilization as well as cross-team collaboration, people first. For example, business managers need to track and monitor resource utilization to avoid over- and underutilization. What if all the information about projects and people's availability, skills and interests were stored, updated and displayed in real-time, in one platform? Think how much easier it would be to make the right decision for the benefit of the people, clients, and business.

Lesson 4: Investing in Purpose-Driven Tools and Technologies is Worth It

According to recent findings, 27% of small professional service firms have difficulty meeting deadlines due to slow processes and inefficient tools. While these technologies and processes can be irritating, their importance cannot be overstated when utilized correctly. To achieve operational excellence professional services firms need smart use of modern technology. 

Picture allocations: everything is harmonious until a project changes or a vital skill is reassigned. Without technology, you have to check data, check with different people, and consume a lot of time and energy in a simple thing. But with operations management software, you can empower managers as well as consultants to swiftly adapt, assessing what can be done and spot client or individual needs. In minutes, a task that once took hours using multiple tools and spreadsheets is completed. This not only saves time but ensures agility when faced with change.

Technology isn't just a time-saver; it's a profit protector allowing you to deliver customer needs better. With access to centralized data on skills, people's interests, availability, billable rates and utilization, managers can build cost-effective, professional and motivated teams, safeguarding your business stability even in growth.

With the tools and technologies available today, you can automate your processes to create maximum capacity for your business as well as headspace for people. By using technological tools and by automating repetitive tasks, you boost efficiency, speed up workflows, and improve decision-making as well as free employees' time for creating customer value. You create more capacity without the additional cost and without the additional stress on people.

Create Sustainable Growth with Operational Excellence

Focusing on operational excellence is a smart investment in the success of your company and the people. When you prioritize people-centric efficiency through optimization, cross-team collaboration, data transparency, and technology, you gain valuable insights that can help you capitalize on opportunities. This approach not only frees up time spent on administrative tasks, but also reduces costs, improves the quality of work and the happiness of people - when done right.

At its best, operational excellence creates a positive impact on your team and company culture. By optimizing your operations, you show your team that you value their time, creativity and professional growth. You want to keep them motivated and foster an environment where top talent is attracted and retained, leading to increased revenue and building a strong reputation. By prioritizing operational excellence, you can create a virtuous cycle that creates opportunities for people, better quality and more revenue you can then reinvest in your growth and people's well-being.

Run your professional services firm with operational excellence

About the Author

The author, Jani Folland, is the Head of Agileday's International Growth. He is an experienced leader in professional services industry with over 14 years of experience in international business, customer experience, professional services sales, go-to-market strategies from leading companies. Read about Jani's experience and why he chose Agileday here.

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