Episode 13 Transcript

Matt Finch: Hi everybody and welcome back to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. My name is Matt Finch and my guest today is president and CEO of RTM Consulting and managing director of the Resource Management Institute, Randy Mysliviec. How are you doing?

Randy Mysliviec:. Hey Matt, it's great to be with you today.

Matt Finch: Great, fantastic. And we have a huge variety of guests on our show, but I'm not sure anybody that's got that long a title in that many organizations. So we'd love to learn a bit more about you Randy and what is it that you do, who'd you do it for and tell us about these wonderful organizations you represent?

Randy Mysliviec:. Well I'll start at the top there Matt. I've been in the tech industry 40-something years, that really dates me, but I started out in the technology industry, working for a company called IBM that's still around and prospering today. And I've worked for just a number of technology companies over the years and mostly computer hardware, computer software firms, that kind of thing. But a big part of my life in the profession was spent in the area of services. A matter of fact, I worked for a company here in Cincinnati called Convergence where I started a professional services business there. And that’s what led me to the idea that maybe I could share some of what I had learned in my years in professional services or other services environments with other companies. I then decided to set out and start my own firm, which became RTM Consulting, which is the parent company of the Resource Management Institute.

RTM consulting does consulting in the services space. We help firms with any kind of services, professional services, management services, field services, support services; any kind of services that you want to get better at is what we do. And out of that came a lot of work in a specialty area called resource management. You know, these companies all have lots of pools of professional services workers, or field services workers, or call center workers or whoever they might happen to be. And the efficient and effective use of those big pools of people is a discipline we call resource management. Some people call it workforce management, but to us, it's really one and the same thing. And that's how we started the Resource Management Institute which focuses on building better and best practices for resource and workforce management. We started five years ago and we have almost 900 corporate members today. We do extensive market research, run events several times a year, in various things, all resource workforce management related and we provide training for resource managers. And so we've got an exclusive resource management certified professional program where we certify managers in the discipline of resource management. So that's a bit about us and we're also headquartered in Cincinnati, Ohio.

Matt Finch: Yeah, wonderful. I mean, you gave us a great overview there. And I think the interesting thing for me with this is these kinds of industry bodies that spring up over time. And someone like yourself, who's been through a variety of different organizations, a real industry veteran when it comes to services. Bringing all of that knowledge and consulting, help, mentorship and guidance to up and coming resource managers. Or people that want to take the certification or learn something from a podcast or learn something from a course or an event that you might put on. I think that's really fantastic. And we talk a lot on this show about the services industry being slightly underrepresented in comparison to other equivalents when it maybe comes to our sales colleagues or client success or whatever it is. And to have a dedicated resource management institute and organization specifically for resource managers work. Absolutely, wonderful.

So great to have you on the show today Randy, I really appreciate you coming on. I think our listeners are gonna learn an awful lot from your insights. I think one of the things we wanted to dive into specifically today, talking about the subject of utilization. And just as a general concept, if we think about utilization as the usage of people's time, resources and being used for the maximum amount of time and profit on the right projects at the right time. That's it from a helicopter view at 35,000 feet, but at the end of the day, resource is a person, so how does utilization affect a person? We really want to dive into that. And I know that you've got some reports and stats and data that you wanna share with us today. So tell us a little bit about why we as services professionals should really care about utilization? What is it about utilization that's a great measure of our services?

Randy Mysliviec:. So it's a great starting question for us on this. If you think about Mavenlink and who they try to reach with their capabilities, their customers are predominantly service providers and professional consulting services. A lot of marketing agencies and those service entities are made up of lots of people, right? And people are, generally speaking, in those organizations the most expensive investment, right? Three quarters of a typical service provider budget is put into salaries and wages for those employees and or contractors that are providing those services. So if you think about that, every point of utilization for those companies can amount to a huge amount of money. And I won't dimensionalize it exactly, but just take a 500 person organization, then take $75 an hour and multiply that times roughly 2100 hours a year and just take 1% of that number. If you just make a 1% improvement, it sends massive amounts of savings to the bottom line for those companies. Not to mention the fact that they've freed up some resources that they might've otherwise filled with a contractor or another employee or whatever. So there are a lot of other aspects to utilization, but the most important thing to focus on is just the amount of money tied up in people and what one point of utilization can mean to a company.

Matt Finch: Yeah, absolutely. And I know that the Resource Management Institute does a lot of surveying of the people that you work with. Tell us a little bit about the survey from this year. Who did you survey and what kind of responses did you get? Just so when we're talking through some of these statistics here, we get an idea of where this has come from and the background behind the survey.

Randy Mysliviec:. So when we published a survey you're referring to Matt, it was the 18th survey we've published as an institute so far on a variety of topics related to resource management. It was the third one we published specific to utilization. And over time we've been expanding the domains, we originally started out with professional consulting services and we added our enterprise IT. Then later added marketing agencies and we just recently added accounting, audit tax and advisory firms and product development organizations. And in that specific survey, we had 51 different companies participate in a survey. It was more than a hundred individual respondents because sometimes we'll get people running different operations inside those same companies. But we had 51 companies with over a hundred respondents, all answering a long list of questions about utilization. How do they measure it, how they're performing against it? Is it getting better? Is it getting worse? What's getting it in the way? What about the processes? What about the tools we're using?

We also just got some great data and the great news is it's the third time we ran it. So we have trending data from 2018 our first run, to 2019 or second run and now to 2021, this one was done in the third quarter of last year. We published a report early in the fourth quarter of last year and so we got some great trending data. It's the only place I know where you can get data specific to these domains. And all these companies are looking for benchmark information, right? What does good look like? Am I doing well or not doing well relative to my peer group? And as a service executive, if you recognize a point that 75% of my cost is tied up in people, boy you're not doing your job if you're not paying attention to that particular metric.

Matt Finch: Yeah, I think the interesting thing about the trending as well is that you've obviously captured a really unique moment in the world with COVID. You've got pre, during and hopefully soon post COVID data that you're going to track. So really interesting to see how that impacts things as well, certainly from a utilization perspective. Talk us through what were your top two or three takeaways from this year's survey? Good, bad and otherwise. What were the things that you really felt stood out for you?

Randy Mysliviec:. I'll start with the good stuff. Number one, utilization is getting better. We as an institute take pride in the fact that we’re hopefully being a catalyst to the industry to get better at something that's so important to those companies, their economics and their customer satisfaction and stuff. But overall utilization is getting better; a pretty big leap in professional consulting services. It was in the low double digits, which is huge. And we have a pretty good sample size, so we feel good about the data. On the enterprise IT side, not as big a leap, but again, in the middle single digits as far as improvement in enterprise IT and use of people. The data on marketing agencies, this was the first run where we got data from marketing agencies and some of the other domains. But generally speaking, one point of good news is the industry's getting better at driving utilization up and that's a benefit for everybody. Another thing I'll mention is we're making headway in how resource management is being governed in these companies. If I went back 15 years ago before I started RTM Consulting and then later in 2016, the Institute, resource management at that time was just not on the forefront of the mindset of most executives. If you asked them about project management or quality management, you'd get a lot of head nods saying yeah, we're really focused on that, but then I asked about resource management and it would be buried down in some third process someplace and I always kind of wondered why that would be. Because again, if three quarters of your costs are tied up in this, why wouldn't that be the top of your list for the things that you're focused on?

So throughout that survey, we looked at governance, progress on metrics, use of tools, accountability and how often are they reporting results and things. So again, encouraging news, we're either holding steady or getting better at how we, as an organization, are moving resource or workforce management up as a priority in these companies. And that's a big one. Then the third one I'll mention is that we at the Institute, we're not a software vendor. Our members work with companies like Mavenlink to get their automation technology for resource management. But you can't do good resource or workforce management without good automation tools and that's where Mavenlink comes in with that kind of stuff. And there are obviously a lot of other vendors out there that do that, but the commitment to companies to using automation tools to enable these processes is clearly there. We're seeing continuous movement forward in, not only the satisfaction with the use of those tools, but the fact that people are getting more out of those tools as they go on, which leads me to the bad side of things.

On the downside, one thing we saw, a one point improvement across the board was that the connection or use of spreadsheets is still way too high. It depends on which domain you were looking at, but they're all on a 47 to 57% or points of range of organizations that invested in one of these modern automation tools. Yet they're still using spreadsheets almost as much as they were 10 years ago and that's a real head scratcher. And there's a lot of reasons for it, which I could do a whole podcast about, but we've gotta make more progress as an industry. And by the way, the tools today have the capability to help people move away from spreadsheets. That is one of these cultural things where I've been using spreadsheets for years and now you're asking me to not do it that way and I'm gonna have to do it a different way. I'm totally convinced when they finally kick the spreadsheets out the door and get onto these tools and use those capabilities, they'll be happy with the result. Less duplicity of data, the integrity of the data will be better, they'll get to the answer more quickly and get more value from their investment in these automation tools. That's the first thing I would mention on the bad side in regards to spreadsheets.

In the utilization report, one of the things we talked about or asked people about was how they measure utilization. And it wouldn't be intuitive that I would think how I measure it has anything to do with how utilized my people are, but it does. It makes a big difference. And so we've been big proponents of using the 2080-hours standard as your denominator. So if you're gonna measure how many billable hours or how many productive hours I got on my person and put that up as your numerator and divide by a number, we're telling you to divide by 2080 all the time. It's basically 52 weeks times 40 hours and that's how you get to the 2080, a pretty simple thing. But there is a preponderance of organizations that have made up their own number. I took off vacation and now I'm using 1,760 hours, or I took off this and I'm using 1,560 hours. The only way the industry can get to a benchmark is we have to agree that we're gonna measure things the same way. Are you measuring in Fahrenheit or Celsius? It's gotta be one of those two, right? And don't give me a third standard or else it's hard for me to figure out where I am. So we're trying to push people toward that standard. And we're making really good progress over the last five years in that in this report, we saw some people sliding backward.

So the reason I'm making this point real simple is because data doesn't lie. And two surveys in a row now, we have data that says if you use a 2080-hour standard, you're actually getting… Take all the comparisons of math away and just make apples to apples comparison to the real data. How many hours of billable productive time am I giving my people? The people have adopted a 2080 standard and overwhelmingly got a better utilization out of their investment in people than those who adopt a different standard. You're probably gonna ask me, “Why the heck would that be, you're just changing the denominator?” And the simple answer is if I change my denominator, my numbers look better. If I go into my boss and say hey, I got 75% utilization and I'm using a 1560-hour standard and I'm comparing myself to somebody using a 2080-hour standard, well that's not fair. And so we see organizations finding all kinds of reasons why they want to adopt a smaller number for their denominator. And what happens is it makes it easier to hide behind inefficiencies in the organization.

So we want people on a 2080-hour standard, that's the best way to measure it. I got different vacation standards in Europe than I do here in the US and that's fine, but deal with that in your targets, not in how you measure because there's a big difference. So again, the data doesn't lie and we got two extensive surveys on this that said if you adopt a 2080-hour standard, you'll get a better result. So that was my second one, a long-winded answer, but I wanted to make that point because it's so simple to fix, but yet so many people have not yet fixed it. And then the third is just a little bit of backsliding we saw in accountability related to resource management. We saw people wanting to push the accountability down into organizations instead of it being up into C-suite, or a senior vice president level wanting to push it down more in a VP or general manager level. And it wasn't a huge shift, but there was still a decline nonetheless of more senior level management accountability to better resource management. And we think that needs to go in another direction.

Matt Finch: Why do you think that is? That seems to me that it should go the opposite way around, so interesting observation.

Randy Mysliviec:. I don't really know the answer. And if I could speculate without any data to back it up, I will tell you my undata-based opinion is it's related to organizations that maybe slid backward on their utilization. So they change their 2080 standard or something else to make themselves look better and then they put it someplace so somebody else could own the problem. Now I don't wanna paint a broad brush over everybody in an organization because not every company acts like that. But I really don't know and it's something we'd like to get underneath. We hope to see it come back and swing back the other way and hopefully that'll happen.

Matt Finch: Yeah, definitely. Did you see anything in the data that led towards some kind of trend related to COVID working from home? Was utilization at all impacted by what happened, other than maybe there's less business around at certain points in time, like an economic one, but anything from a process perspective?

Randy Mysliviec:. So interesting enough, there was no significant shift that we could tie one way or the other to the pandemic. Now I did say earlier that utilization since our prior landing period of 2019, the pandemic came right in the middle of that and we took this survey in the third quarter of 2021 and utilization actually got better. So could I tie the two together? I think I could without having clear data to tell me that, but my instincts would tell me it probably did get better to some degree because of the pandemic simply because you had more people working remotely. And there are obvious downsides of people getting distracted at home and maybe not getting as much work. Particularly in some communities, 45 minutes driving to work and 45 minutes driving back and you're getting more focused time.

So I don't know where the trade-offs or the balances are but overall, the Institute got a lot of inquiries about the pandemic and its effects and how we operate the processes. The good news is when we design the just-in-time resourcing process methodology or solution that gets taught in our certification course, it doesn't matter whether your people are remote, working for the company, your contractors, employees, we don't care. The process takes care of that and makes it easier to work in a mixed environment. People working at work, people working remotely and those sorts of things. I would mention too, our company, RTM Consulting, way back in 2008, we initially started with an approach that said a lot of big consulting companies were forcing their employees to come to the office and then put them on a road 5 days a week. And we took the tact of we don't want anybody traveling more than maybe a third of their time and learned how to do consultative work. You know, management consulting, operational consulting, technology consulting and do it from our homes. So when the pandemic kicked in, we're already doing that and now we're just not traveling at all and doing business as usual. And I think a lot of companies figured their way through that as well because we're not getting the calls back to say get on a road and start traveling again. And I think the industry is largely better off as a result of that. There'll be some downsides because of the work at home, there are some negatives there, but it'll work.

Matt Finch: Overall good and not forgetting the financial element of the cost of travel and all the lost opportunity being on the road versus actually doing the job. Yeah, wonderful, a great point. So Randy, I'm really intrigued into some of this data that's coming out here. If you were listening as a services leader, what would be the top two or three things that I could do that could help me better increase utilization in my organization?

Randy Mysliviec:. Well, I'd point to a few things. If you go out to the RMI’s website, we have all of our past events prerecorded. We've got White Papers and all kinds of stuff out there, but in quite a few of the state of RM broadcasts that we do at the Institute…A matter of fact, we're doing our annual broadcast tomorrow and there's a slide in that deck, which we've published quite a few times. It's got 10 best practices for resource management listed there. I would encourage people to go pull that page out, stick it up on their wall or wherever and pay attention to those 10 things. Because while we have a ton of best practice information in our knowledge base, those are the 10 that we tell people, if you wanna be good at this, at least do these 10 things. And some of those things I'll highlight for you, some of the bigger ones are building a resource management office and hire good RMs. Again, resource management relative to say project management is still pretty nascent. People have been at it for 10, 15, 20 years, but project management, we've been at it for 60, 70, 80 years or however long. It's a lot more worked out because there are so many people who have been focusing on it.

We've been pushing this concept, the resource management office that looks kind of like a project management officer or a PMO, as they know on that side of the business. Put it all off on its own, put it in a generic place, we call it neutral, make it like Switzerland. Put it someplace where it can grow and develop without the influences that might cause us to not make the changes culturally that we need to make to move to a different way of doing resource management. And then hire resource managers and resource management is not an admin function, you need smart people with good analytical capability to look at reports and look at data and get to know people. And so hire really good RMs and don't make it an admin function.

Now we selfishly tell you to come to the RMI, send people to class and use our process. You don't have to use our process, but we have when done, we give you nice big books and it's relatively inexpensive to send people through this course. You get the process and you can walk back and modify that process however you want to meet your particular needs, but don't reinvent the wheel. We've been spending years at this and we've got it down. We've got hundreds of companies using this process, go get the process and start with that as opposed to starting from scratch. By the way, we have a way to train people in that process so you can get everybody trained. Get off the spreadsheets and get a modern PSA tool and I tell people to do that sooner than later. Call your favorite automation tool vendor and tell them to come talk to me about solutions on a resource management side and cut the cords with the spreadsheets, really important. And then the last one I'll mention is to get on the 2080 standard. Measure utilization, get on a 2080-hours standard, it will make a difference. You'll be able to compare yourself to your peer group and we're pushing out the data to give you that benchmark stuff. Again, those four things I just mentioned and another six are on this one slide that you can get out of our state of RM broadcast and you get a copy of it. That's what I would tell somebody to go do if they were just picking it up and starting from scratch.

Matt Finch: Yeah, love it Randy. And just the things you've said just to summarize. Centralized resource management function, certified process, looking at things like the 2080 standard, get certified as an individual, run the process that you want to run and then automate solutions to help drive that.

Randy Mysliviec:. Yeah, that point you made, centralization is really important. Department silos, I tell people, are the worst enemy of a company trying to do good resource management. I mean that's how I was taught to work as a manager 40 years ago, was to build up a great department, get great people and then protect them. Today, you wanna do the opposite, you want to hire great people and grow and develop them, but make those people available to the enterprise to help your customers wherever they need help. And by the way, employees love that too because they get a chance to look outside their own department and get some opportunities to grow and develop which they might not otherwise get if you bottle them all up in one place. So there's a lot that can be gained.

Matt Finch: Yeah, definitely. I'm certainly seeing a lot in many places; software sales services. This concept of shared services. So rather than you having a department and just do your job, like you said, protect that team and build your own little empire and not have them cross other silo barriers. Actually going in the opposite direction is way better for individuals, career development, opportunities, that kind of thing. It's way better for the organization. And it really allows you to build a best practice across every part of an organization, as opposed to just focusing on the 2, 3, 4, 10 people that might be in your world. You can impact a much greater cohort of people if you act more as a shared service for the business, as opposed to I'm sitting in my little world and doing my thing by myself. So just thinking and moving towards the future, we can see historically in the past what the data tells us, but where do you really think people should start? What trends are coming down the line? What's something that we don't know about now that you think is gonna be really important in the future?

Randy Mysliviec:. First of all, the future's gonna be amazing and we're gonna see a lot of change. I think it'll certainly be a lot of process change, but we're gonna see a lot more on the technological side of things that will really start to help us here. So we'll continue to do the things we do, pushing best practices and helping to evolve and educate people in trying to do that. I think the exciting part of resource management and workforce management going forward is gonna be the application of technology to make resource managers more productive. They're not gonna replace resource managers, they're gonna allow those people to do a much better job of doing that, so things like artificial intelligence. And so today, the tool vendors all say they have good staffing technology to help you with staffing and they're pretty good. They're way better than they were 10 years ago. Artificial intelligence will take staffing to a whole new level.

The difference with an RM who's got a project they're trying to staff and they're looking at a database of people that might be available. And they're trying to quickly make that decision of putting those two things together is with AI, you can start looking at okay, well is that the best cost choice to make? Maybe I can get that same person, the same skills and a lower price someplace else who's also available. Maybe I can find a person who is a perfect match for their professional development plan. And so maybe they're not the cheapest, but I helped employee engagement, employee morale by putting a person in there that's gonna say hey, thanks boss, I really appreciate the opportunity to get put on this project. I mean AI can consider things like location, cost, personal desires, professional development needs, all kinds of variables and do it like that, right? Resource managers take a lot longer to do and so AI tools are gonna help a lot.

Forecasting is a huge weakness, it's the number one problem our members have. And with resource management, you can't materialize people overnight. If you wanna hire somebody, it takes weeks and months, particularly in today's environment. Or if you have to trick people or if you have to reskill them, we're talking in terms of months for these things. So if you don't have a forecast that’s at least accurate in the terms of months, you're always behind the curve. You can never get ahead of the problem and you're always playing triage. And so AI and better business intelligence capabilities are gonna bring forecasting to a whole new level. Because when you think back to when supply chain first started, companies started coming up with all these methodologies and algorithms to figure out what widget do I need on that store shelf, in that city, on that day, at that time. And if you had asked them 10 years earlier, if they would have the kind of precision they have today, people would've laughed at you and today they're pretty doggone accurate. I think we're gonna take resource management with AI and BI to the level supply chain organizations are today with bringing that to the world of resource management. It's gonna be super exciting because then we can look at our processes and say how would I change those things, then to take that intelligence I'm getting and put that to work to create more strategic advantage out of resource management.

Today organizations are just concerned about controlling costs. I could say you know what, next year I know the inflation's kicking in, I gotta give people pay raises. I actually wanna lower the cost per hour of my delivery function. That's possible. It's being done, I've done it and so it can be done, but you need the kind of technology and process to get there, but wow, that's super powerful.

Matt Finch: Yeah, it is. I think the most interesting thing about those comments Randy is the added value that this gives to a resource manager. This is not technology that's going to replace you, it's technology that's going to help you become more strategic. And help you become more valuable to an organization by being able to make more advanced level decisions than simply on a spreadsheet, put a person's name in a box and hope that it works out. I think that's a really powerful thing as a resource manager to take away from some of those future trends.

Randy Mysliviec:. I think that's right on the money. I think it's gonna make a huge difference. And you’re exactly right, it's not taking stuff away, it's gonna add more value to that whole process and experience of resource management. Tomorrow on our broadcast, I'm gonna be talking about the convergence of resource management and workforce management. To us, they've always been one and the same, but we recognize organizations that say they're doing workforce management and others saying they're doing resource management. For us though, it's the right person, right place, right moment in time with the right skills. In the end that's the single grounding point for both of those terms and whatever they mean to you. But we think those two things are gonna converge.

Matt Finch: Yeah spot on, absolutely. So Randy, final thoughts as we're coming to the end of our session here today. What would you think would be the main point that you would ask our listeners to take away from our conversation today?

Randy Mysliviec:. All those Mavenlink customers do and lots of companies have a service-based economy now. The line's crossed about, I don’t know, 7, 8, 9 years ago, where we're no longer a product-based economy, we're a service-based economy. If you run a services organization, if people are intensive, you have to be good at resource management because it's not just utilization and cost. The more you get the right person, the right skills in the right place, the right moment, the more you'll have fewer project failures, you'll have happier customers and you'll have better quality. I mean everything wins, but you can't be good at services unless you're gonna be committed to being good at resource or workforce management. People, processes and technology, those things have always been true, they're not gonna change going forward. But you wanna be good at services, good at resource management and you'll be competitive in the future and hopefully turn that into a strategic advantage for your company.

Matt Finch: Yes, absolutely. I love it. Randy, fantastic conversation, really encouraged everybody to dig into that report and dig into all of this fantastic data. Randy, thank you so much for joining us on the podcast today. Audience, if you'd like to learn more about resource management and utilization, go to the RMI website at resourcemanagementinstitute.com. See their great resources as we've just said. They also have a fantastic program that allows you to become resource management certified, a resource management certified professional. That's a wonderful thing, Randy, that you're providing, really excited to do that. I've actually sent a few folks from my own personal team through that course and they've come back so jazzed to know what this is all about. The future of resource management and how that can apply to our software and to our clients as well. Really wonderful Randy, thank you again so much.

As always everybody, please reach out to the podcast at mavenlink.com if you have any questions about the show. We're always encouraging people to reach out and ask questions. We've got some great future guests coming up as well. If you'd like to learn a little bit more about what Mavenlink does and how they can support you as a resource manager, please also go to mavenlink.com and check us out over there. Randy, thank you again, I really appreciate your time.

Randy Mysliviec:. Thank you man, we appreciate it.

Matt Finch: All right, take care. Bye everyone.