The age-old agency practice of billing by the quarter-hour is broken. For starters:
- The “on the clock” mentality often gets in the way of a true agency-client partnership.
- If you check DMs for a client on Twitter, is that really worth a quarter hour?
- On the flip side, if you’ve built up a long-standing relationship with a reporter and can get a story placed incredibly fast, the value of that relationship is worth more than the brief period of time it took to secure the coverage.
These are just a few of the many reasons we shy away from billing by the hour, instead shifting toward a hybrid of tracking time and value-based outcomes.
But, there’s another, even more important reason. I believe billing to the hour — and the need to be accountable for all your time — limits creativity. And, I’m not the only one …
Creativity Zig Zags
As I was listening to HBR’s Ideacast the other day, I was struck when Bruce Nussbaum explained that creativity and innovation don’t move in a straight line. He noted that businesses gravitate toward the analytical tools of efficiency; however, creativity doesn’t work on the principle of efficiency. To me, timesheets are the perfect example of one of those tools of efficiency. By making people accountable for their time, in theory, we’re helping them stay focused on the task at hand, adding a layer of accountability that ensures time isn’t being wasted on non-essential tasks.
But, at what cost?
If someone knows that they’re accountable for every minute of their day and that they’re required to hit a specific billable percentages, they’re less likely to meander off task. Great. But, they’re also less likely to explore a random idea that may or may not develop into a brilliant concept or opportunity for a client.
Trust your employees. (If you think they’re wasting time at work, that’s a personnel issue. Not a timesheet issue.) Encourage creativity and innovation. Bill based on the value you deliver. After all, clients will be far more impressed by a creative idea than a long list of tasks, broken down by quarter hour increments.
Do you agree/disagree that billing practices can stifle innovative thinking? How do you strike the balance between accountability and creativity?