No Timesheets vs. Utopia

Imagine your house is on fire. You were able to get your family out in time, even grabbing some precious pictures along the way. Now your distraught family unit is standing in the middle of the street watching your American Dream go up in a fiery blaze.

The fire department arrives, they get out the hoses and just as they are about to attempt to extinguish the inferno, you run up to the lead firefighter and scream: "WAIT! WAIT! WHAT ARE YOU GOING TO REPLACE IT WITH?"

Sound absurd? It is. But it's almost the exact mindset we find in firm leaders when confronted with the possibility of trashing their timesheets. Rather than admit the incalculable damage timesheets are inflicting on their firms currently, they want to make sure they have the perfect utopia figured out before they do away with them.

I would have thought stopping existing damage, even in the absence of a replacement, would be of value. I was wrong. In effect, most firms won't let us get rid of their timesheets (fire) until we have constructed the perfect (and I do mean perfect) replacement. Talk about letting the best be the enemy of the good.

(Okay, folks, stay with me on this, it's a somewhat historical analogy, but it's very applicable to this issue. Sorry Mr. O'Byrne, you're not going to like this!).

Before communism crumbled in the old USSR, there was an old Soviet joke: "What is socialism? The longest road from capitalism to capitalism."

This is more profound than it sounds. Firm leaders in PKFs today ignore the deleterious effects of timesheets as much as the citizens of the old Soviet Union ignored Gosplan—the governmental agency that determined those fictional five year master plans. What did the citizens pay attention to, if not the official plan of the government? The black and grey markets, which were the only place where there was an objective reality—and goods for sale—communicated by prices.

Communism was supposed to create a utopia—a new man, a new society, a new way of living together. It sounds great in theory. In practice, it sucks. Communist practice has never lived up to communist theory. Just like timesheets. The problem for old communists—think Fidel Castro—is they never compare the reality of today with the alternative. When the suggestion is made they switch to capitalism, communists compare capitalism to their utopian vision, not the existing hell they are in.

They praise a utopian future of peace, brotherhood, prosperity and justice while their people perish in the gulags their obsolete economic ideas have created. Oh sure, they occasionally recognize there exists some human rights abuses, not to mention material deprivations, but it's always for the greater good. Because, you see, the future will be better. It's always about tomorrow, never today.

Lenin said, "You can't make an omelet without breaking eggs." As the eggs—and bodies—pile up, there is, alas, never any omelets.

A key mentality is to judge communism by its best intentions, while judging any and all alternatives by a utopian standard. With communism, there are only tomorrows, no recognition of the untold harm it is inflicting on today, or yesterday. Communists are ruthless in their criticisms of every new alternative, but never the existing regime. After all, their intentions are decent and honorable—they are idealists when it comes to the status quo because it will inevitably get better.

It's an inept pursuit of yesterdays' tomorrow; only tomorrow never arrives.

In addition, the few times true believers in communism—especially those fortunate enough not to live under it—would recognize the failures of the countries that had adopted it, they turned to incremental regimes. Yes, the Soviet Union was not the paradise we thought, but China will be different. Then North Korea. Then Vietnam. Then Cuba. Ad nauseam.

Even today, some die-hard communists—mostly on American campuses—still insist communism was never properly implemented, and if only we had the "right people" it would, of course, work. These individuals hold on to their utopian dreams while not recognizing the reality of their vision is rotting.

To borrow from Karl Marx, communism—not religion—is the ultimate "opiate of the masses," clung to because it offers answers to life's most vexing questions. It is a special form of blindness not to see reality.

Now, if you were to replace communist and/or communism in the above paragraphs with "firms with timesheet," and/or "firm leaders who believe in timesheets," and replace "capitalism" and/or "alternatives to communism" with "no timesheets," I believe the analogy is the same. Here's why.

Like capitalism, no timesheets seems a counterintuitive system. What, no one in charge? No one looking over the shoulders of our team members making sure they are efficient? No Big Brother?

No timesheets, like capitalism, is an "inarticulate wisdom." It works better in practice than it sounds in theory. Firm leaders will project all sorts of deleterious consequences to not having timesheets, while not attributing the Gulag their people are currently in to a world with them.

Like the incremental communist regimes mentioned above, firm leaders will engage in their own form of incremental tweaking of the toxic symptoms of timesheets, all the while leaving the cause firmly entrenched. They will put their faith in the new regime, embracing all sorts of fads—from work-life balance to chair massages—leaving the basic belief in the effectiveness of timesheets themselves unchallenged.

And like communism itself, timesheets destroy human capital, or at the very least, impart negative human capital. They keep professionals mired in the mentality they sell time. Mired in the mentality that time equates to value. Mired in the belief that filling out a timesheet is a form of proper project management, and the only conceivable way to communicate value to the customer ("but we spent the time").

Like communism, timesheets promised an omelet, but all they delivered was broken eggs. In the case of PKFs, the broken eggs consist of the talent drain and the negative morale of those who have to account for every six minutes of their day as if they were prisoners.

Rather than dealing with the cause of the malaise that currently exists among the professions, firm leaders, like devout communists, fail to recognize that the timesheet is the tapeworm devouring them from within. This parasite lives on the life force of its host without making a contribution of its own. In this case, the life force of the PKF is intellectual capital.

This tapeworm is the cause of the Seven Deadly Sins of the billable hour and timesheets in the professions:

1. Value equates to time, hence billing by the hour
2. Timesheets communicate value to customers
3. Timesheets are necessary to measure productivity
4. Timesheets are necessary for cost accounting
5. Timesheets allow us to budget projects
6. Timesheets are a substitute for proper leadership
7. Billing by the hour forces us to price in arrears (not a good time to learn the customer doesn't agree with your price)

So when we hear firm leaders bemoan all of the real and imagined costs of getting rid of timesheets, plus the utopian standards in which they hold any possible alternative, I frankly remain as amazed as a fireman would be with the question, "What are you going to replace it with?"

If a surgeon cuts a cancer from your body, that is not the question he would expect. Timesheets are a cancer, but beware anyone who suggests getting rid of them. You better have an answer for every possible contingency that could ever happen, even if the existing timesheets are rotting the firm from the top down.

Irish statesman, author, orator, political theorist and philosopher Edmund Burke once wrote: "A state without the means of some change is without the means of its conservation." If firms are going to create tomorrow, they first have to cast off yesterday. If you want to try something new, you must first give up doing something old, otherwise your learning process will be impaired. You simply can't have the trial without the errors, as they are essential to all learning and growth.

Unlike PKF, our bodies have a natural mechanism to discharge waste. We have conclusively proven that timesheets are waste, and have even answered the absurd question to the fireman of what firm's need to replace them with. Here, again, is what replaces the timesheet:

• Value Pricing
• Key Predictive Indicators
• Project Management
• After Action Reviews
• Before Action Reviews

Obviously, the above require more intellectual capital, creativity, imagination, skill, and talent to accomplish than mindlessly completing a timesheet and loading the result into a time and billing program. But that's the point. Rather than destroy human capital, the above functions create it, and in the process create wealth not only for the firm and its stakeholders, but more importantly, for the customers it is privileged to serve.

To firm leaders everywhere, let me emphasize: Stop comparing no timesheets to some utopian standard that doesn't exist. Instead, compare your rotting status quo to the possibilities and vistas that no timesheets, along with the above functions, open up to your firm.

In Plato's Republic, he described a perfect society called "Utopia." The word is taken from the Greek words ou (meaning "no, not") and topos (meaning "place"). Thus, utopia is "no place."

Utopia doesn't exist. The current state of PKFs around the world, in terms of talent attraction and inspiration, quite frankly is atrocious. Why does the present have to wait for some unachievable future before leaders take action?

All I know is we at VeraSage have given you the replacement. Now, let us put out the fire that is destroying your firms.

Yes, the work in front you is hard, but I can't think of anything worth having that is easy.

We will even help you. Just ask—but ask the right question.