Episode 12 Transcript

Improving Agency Operations With Technology, Data and Automation w/ Bear Forsyth

    Brent: Welcome to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. I'm Brent Tremble, one of the hosts and my guest today is the head of operations at ORM andrew Forsyth, better known as Bear. Bear being your nickname, not a moniker of the agency, I should clarify for our listeners. ORM is a DCX agency that helps brands do better business by creating their own digital roadmap. Bear, it's great to have you on the show and thanks so much for joining.

    Bear: Thank you.

    Brent: In this episode, we'd love to explore your journey into operations. And in that agency context, the role of technology and data in a modern agency, as you go through modernization and how you prepare and support your org in making those operational changes and bringing them through a journey of change management. Which of course is always ongoing, but I think it'll be really interesting and relevant for our listeners. Before we dive in, tell us a little bit about yourself and then contextually your journey within ORM, your role and what your current admission is there.

    Bear: So I’m a Canadian who came to the UK as a tech and started looking after resource management during the Olympics. And I’ve gone through an interesting journey of agencies taking on kind of the next step, the next step, just learning and plowing away in operations. ORM is a return visit for me, I worked there a while ago and we did some great work together. And after I went and did a few other jobs I came back to them because it’s a really wonderful company to be with. We mostly work on platforms and services, making different applications, user journeys, simplistic, things like that. Now ORM is kind of a mixture of data technology, service consulting people. So it's an interesting challenge from an operational perspective because you have a whole host of different people working in different types of verticals and you've gotta bring them all together to make successful projects.

    So different people with different journey types, from creatives to technicians who know so very much more than I do about what they're building, to data and the clients. And it's an interesting challenge because there's so much there that everybody needs. And it's kind of part of the job that I really like, is that we're connecting all the different facets of the business, be it finance and HR, be it technology, be it a creative person or a content editor. Bring them altogether, allow them to work seamlessly together and allow them to collaborate and do their best work. So I think that the ongoing journey from doing just pure resourcing to doing all this operations stuff for me has just been really fantastic and I'm really happy to be doing it where I am right now.

    Brent: That's great. And maybe talk a little about, of course in the agency context, whether that's a creative comms shop, that's doing a lot of broadcast work. We'll be seeing a lot of that work here soon in the United States through the Superbowl, of course. Whether it's a public agency or activation or biddable media or in your case, digital transformation with platform builds and development and strategy, people in all these agencies are the product. And ultimately, talented people come together, collaborate and drive strategy all the way through to completion. So resourcing, I would assume in your case, had profound operation implications. And then moving from resourcing into operations seems kind of natural, but maybe not. Some folks move from resourcing to talent, some folks will move from resourcing to maybe recruiting. Talk to us a little about your journey, that switch from okay, I've got a handle on resourcing and now I want to take a broader view in operations.

    Bear: I would absolutely point to the one Olympics for this. I worked with a chap named Toddles, he's actually an American from Nebraska, a project manager and I think it was his fourth Olympics, if I'm not mistaken. And the point of my job with this was resourcing and it was actually in talent acquisition as well, so we were looking at bringing people in, training them, that whole side of it. And he really broadened the scope of that you have to think about project delivery, you have to think about timing and you have to think about stock management, logistics and all these sorts of things in doing the resourcing. You can't be focused on just the people, just the talent, or what is it you wanna hire and fill those holes. You have to look at the strategic view of it and how you fit that in with the wider project plan. And so for me, that journey was, I guess, educated and pointed. We had to get almost 600 people in the door, but we had to get them in the right places at the right time; minimal cost, all those sorts of things.

    So you looked to operations as a wider function, part of the project management office in our state and it allowed us to collaborate with the people who were purely looking at scheduling. And the people who were purely looking at talent and combining them with the people who are looking at deadlines, deliverables, shipping manifests and all that sort of type of stuff. And his goal was to bring it under one roof, bring it under a piece of technology or a single point of contact where you can look at that as the whole. And so for ORM, we kind of take the same sort of approach. Now I've carried this kind of forward through those agencies and you go into ones where it's more creative-focused. You need to focus a lot more on the people, the assets that they're creating, storage management, these types of things. And we go into technology agencies and it's more about we have the right talent at the right place for the right platform, but you also have to be able to supply them with everything else they need. They need to be able to access customer information, they need to be able to create documentation and they need to be able to put out release notes, et cetera. And so that widens that scope again, it's not just about the right person, right project, or right time. You know, there's everything around it in that sphere that you have to make sure also has those optimum conditions to give a project success.

    Brent: Optimum conditions, you know, there was a peer or a mentor I had from the UK as well years ago and he said operations in an agency create the conditions for success. I thought that was a really good line and it's interesting that you bring that up as well. In the case of ORM, you’re making that personal shift in maturation or growth from resource management, it's an overall operation. Of course, resourcing is gonna be a function of that. What was the journey like taking the agency through that? And I think you've done it a couple of times, but talk us through this notion you shared previously of moving from spreadsheet Meyer into more of a mature operations posture.

    Bear: Yeah, I had a very interesting conversation about this, spreadsheets are lovely, I'm a big Excel nerd, I love making spreadsheets. I'm gonna have to make one and I'm pretty excited about the concept of it, but haven't done one in a while. But the thing is that, just exactly that, I love it, I love my spreadsheet. I built it, I know what it does and I'm really proud of it. There's this sense of accomplishment in building something that works really well in Excel. There are people in every business who can do it well and then there are people in every business who think they can do it well. I probably am one of the people who think they can do it well, to be perfectly honest, but you tend to put this trust in it. You put this trust in the fact that you've built it and that you know what it does and know how it works and it's giving you the right information. And more often than not, if you give it to somebody else, they break it or they get a different story from it than you got because they filtered it differently or whatever the case might be.

    I've worked with a couple of businesses where our resource operations were in spreadsheets, our project finances, the overall business, finances, you know, everything was in there. And for some aspects like your calls on how much a client is gonna bring into the business over the next quarter. Sure, great, let's put that in there, we can add it up. But one of the things that you start looking at is that there are these errors introduced and then nobody's really paying attention from one sheet to the next. So you have a project manager who's focused on the delivery of their project. They're putting in their actuals so that they can track their burn and they're putting expenses or what have you so that they can effectively manage that cost aspect of the project triangle. But then there's me over there going, well my spreadsheet says that you had 40 hours booked and you're only using 24, so that's bad business and that's where we start to look at the holes that start to appear. And spreadsheet to spreadsheet they often don't talk. Interaction between them is possible, but people don't generally tend to make the project manager's budget spreadsheet talk to the resource manager’s for planning.

    Brent: Right, so it's data and silos.

    Bear: Exactly. It's not until you start to compare and do the work to bring those numbers together and those formulas together that you can start to pick up things like I say the mismatch between request, allocation and usage. Or that a person's cost may have changed, maybe a person was promoted and we haven't updated their cost, therefore your margin is out, all these sorts of little things that get introduced. The more you rely on that type of environment, the more you're naturally introducing those errors. But you become accustomed to the way that you're being presented data. And you don't necessarily question it if a function is running properly, then why do we worry about it? And it's not until you find something, maybe a big thing, maybe a small thing, but it's something that's showing you that your data's wrong. And so while I love it, I like working in the environment of the spreadsheet. At the same time, you have to recognize that over time, your data's probably gonna get worse rather than better. And the errors that you're seeing are gonna get wider.

    And so for the businesses that I've been with, one of the first moves is to move them into that OSR environment. To move them into a system where we can have the commander control, the comparison, the input, the output, the reporting are all coming from the same metrics. It's coming from the same calculations and it's coming from the same source. And as soon as you start to do that, you really get opened up to those things that you were missing before. The fact that yeah, sure, from your perspective, your data team’s been running at a hundred percent allocation because the project managers have been fighting for their time, but in actuality, so and so didn't have objectives ready to go. So there was nothing to do for a week and you've lost out on that opportunity to check and rebalance that.

    Brent: Yeah, so it's almost like a manifestation of, I think the math term is something around that, going back to sort of early business school, math here, so apologize in advance. But the base rate fallacy or base rate neglect where you're looking at two different data sets that are related, but ignoring that the potential for the base rate could be wrong. They're contextualizing information, what they're interested in is interesting to them, but they ignore the possibility that those two data sets aren't connecting and therefore they're kind of interpreting from incomplete data.

    Bear: Precisely.

    Brent: You know, we both proved that kind of accidentally that some second sophomore year business math can come in and be useful and be relevant. When you're looking at data and I think this would be really interesting to users and to listeners, particularly of those that are going through a journey of modernizing operations or doing similar to what you have, let's lift out of spreadsheets into something that's common. There are a couple of ways to think through that, right? You're looking at the array, you have experience, you're seeing disparate data and you are saying let's unify from the inside out. Let's begin maturing and getting this data into a platform where that has some common themes and we can orient around that.

    The other side might be the inverse where someone says we've got some data, it's bad, like the performance of the shop is poor. And our margin is maybe off, we seem to deliver projects late all the time. We seem to write off a lot of time at the end of the year, those types of things. And therefore they might pick a few orienting principles that are operational and focused. These are the operational levers, performance levers we want to orient from, now let's work back and see what we have to do to achieve this. Talk us through how you arrive or utilize those different principles.

    Bear: When you look at what you can do in managing a business and often from operations, people are talking about costs and they wanna see you manage the costs in your business. And so then you look at resource management. So you look at can we do as much as we're doing or more with less, or do we have positions we could outsource or contract, or what have you. I think I've found that that’s a lot of people's starting point, the first thing that they point out is like let's reduce costs, right? We need to plan for some better stuff here or whatever it might be. We're trying to optimize the business, they're not looking at how those people are truly being utilized by the business itself.

    They're not looking at the comparison of bookings to actuals. They're not looking at the comparative points of data about each function, resourcing is at, utilization is at, finance. Let's look at when we're doing our project wash up at the end, can we compare these things against our estimates, against our plans and so forth and do those comparative analyses there. And is there anything that we can do more efficiently through automation? And a big one for us has been automation in terms of managing business costs because we don't wanna introduce new applications, which introduces change. Somebody comes up with an application, they say this thing is fantastic. It does X really great, everybody wants to buy it, but is this the best way forward? One of the things that we've spent a lot of time doing is looking at how we can do what we're doing today in a smarter, more efficient way? And 9 times out of10 for us, that means let's automate the function.

    Let's take, for example, our JIRA system and integrate it with our timesheets so that we can get flow across data. We've got actuals, plus we have a record of estimates via actuals in the JIRA tickets. Let's automate the function of setting up projects to relieve administrative stress against our project managers. So our sales force connects into our Mavenlink application and creates the projects for us. Sending out invoices, doing financial planning, what are the revenue milestones in a project, all these sorts of things we can create functions for so that we reduce the administrative overhead across the business. And thus we can free up people to be either better creatives, better project managers, whatever they might be and without having to look at the cost academy at all. And we can look at that as the last thing because you started this off by saying, this is about people and that's absolutely true. And the people that we have in our business, we've hired for a reason we've hired them because they're smart and they're good at their jobs. So when you look at the efficiencies of your operations in the business, to look at cost-cutting as the first step, basically says that everything that you said about your people is probably not true. I guess that's maybe more an opinionated look on operational levers, but I think that's where I come from on that.

    Brent: Yeah. So this notion that the products are the people and in any agency consultancy, fee to service, hybrid type of service firm, payroll costs are gonna make up what, 60 to 70% of overall cost right? So your notion here is oriented around productivity, making people more efficient. Give them back more time to do what we intended for them to do, which is innovation strategy creative for our clients and make operations kind of a frictionless barrier to good performance.

    Bear: Exactly. Most people didn't go to school, earn themselves a degree and placed in a business like this to spend their time doing timesheets.

    Brent: Right, absolutely. Yeah, let me ask you another question. So we work a lot in a consultative fashion with clients and prospects and we use a few tools where we walk through a kind of current state. You know, where you are right now as an organization in operational maturity. And we subscribe to some third-party data that's very objective, it's been in the market for some time, it’s kind of a longitudinal study and it's from the service performance insight Institute. And they survey around a pretty sizable data set like 6 or 700 different organizations. And look at things like by your size of firm maturity in key process areas. And then if you are fairly mature, refined, you're using automation, using platforms, you're using, for instance, a CRM platform that's tied into an operational platform, that's tied into a general ledger. You have some integration and some automation there and you probably matured, like you might be a four out of five.

    In that case, there are some industries in dicey metrics that are relevant and that are kind of common. One of course might be EBITDA. If you're a shop of 300 people billing at a certain rate, you kind of understand where your costs are gonna be, your EBITDA. If you're really mature, it might be between 20 and 30%. Less mature, you might have negative EBITDA. You might have gross margin, but you may have made some tough hires, maybe had to sink some time into a demanding client and had a challenging year in terms of EBITDA.

    From your vantage point as an operational leader who's taken some firms through some change and is now approaching, it sounds like some good levels of maturity, what are the levers you look at as a leader that indicate things are going well, or we’re optimal or getting there? Are there things like profit, revenue per consultant, chargeability utilization, or is it more like compliance and more at the qualitative level around people, usability and things of that nature? People are happy or their churn is low. Share with our listeners. I think just to hear from someone in that operational role, what are some levers you look at that signal strength and health?

    Bear: Yeah, interesting. I can think of at least twice when that's happened with the large client taking up too much time, but EBITDA is definitely one of them that we constantly pay attention to. Even does one of the ones that every month in our company meeting, we talk about it. We talk about where we're at against the target, where we're going, how far are we? We also then look at where we should be in terms of billable hours for the year across the capacity of the business. As well as per head, per department, per skill area because we break down not just into technology, but then into Subsecs of technology, campaign, solution, QA, whatever that might be. And we look at the efficiencies and the utilization of those areas as well. So resource utilization, again it's a high-level one that everybody wants to know. They wanna know people are using it, they wanna know the best value of money out of the people that we have.

    Brent: And when you say utilization, so there's just raw sort of pure utilization, which is the function of how much someone is working and then there's chargeability or billable utilization. Which is of that, what percentage are people working on billable work? So yeah, in your case, do you split them out, are they synonymous?

    Bear: No, we look at them separately. So everybody in our business has a billable target percentage against the role. And we do look at whether or not an individual has met in that period, that billable target, but then there are other factors to that. There are sales and marketing time, so sales and marketing time has to be considered a productive utilization, productive function of the business because it's leading us to our next wins. We can also look at administrative time. So we track it independently and look at how that administrative time was spent and we break that down into some generic categories. We also look at training because we have training programs throughout the business and there are people doing certifications all the time. We wanna manage and measure that as well as a percentage of the business because we have that budgeted and at a value that we wanna spend per year. But outside of those projects, we look at the project’s health.

    Brent: Timely delivery, is that a metric you look at?

    Bear: Timely delivery, absolutely yes. We do compare estimated closed dates to completed in our system so we understand how projects are completed. So completing on time is one, completing on budget is always the goal with minimal defects. We operate at least 90% defect-free across our engineering teams. So we measure that again through labels and integrations between JIRA and Mavenlink to be able to track that in reporting. We look at project health checks. So we look at a rag status of five different areas- the client, the budget, the project itself, et cetera. And we measure those on a weekly basis so that we can also see when people are actually calling out issues, we can see it presented to everybody in the business and who's looking at these reports.

    If anybody's calling out their RAG status is Amber because of X, we're all aware of it. And so we have dashboards for that, then we have project and client margin. Obviously we're gonna be looking at that as well. And again, we track that in the same way. We set an initial baseline from what the project cost and sold as and then we track against that until the completion of the project where we get a final pre-ACA margin and a final margin after cost and expenses and we'll measure what happened there too. And we can do that, with our system we can go right down to the individual. So we can see whether there was a resourcing decision to put, let's say, a lead person on a mid-weight role and thusly, we burned faster project budgets, faster project costs as a result. So it's a wide variety, but I think it's all important.

    Brent: It sounds like in your role, a lot of these health metrics are driven by talent economics because you're an agency, your consulting firm, that's very natural. Whereas operations in a different industry might be very logistic. You know, it might be supply chain, it might be raw materials and those types of functions. So it sounds like a lot of these orient to the talent economics as well as client burn budget rolling up to the overall strength of the agency as it pertains to profit. It's interesting, one of my previous guests we were talking about and he does a lot of consulting in the space, has written some books and does some operational work, he was saying that orienting at least one of the metrics around a revenue per employee or consultant is a trend he's starting to see. And he thinks it's a good one, but it's a bit arbitrary, right? It's an outcome and there's a lot that goes into that, but saying that it's a good measure of strength. And you can measure year over year to see how you're doing. Is that anything you look at just out of curiosity?

    Bear: So I absolutely have an RRR report or Required Rate of Return per head. So we can see that, we have that set as a value for each individual, but it's not a report I’m relying on. To be perfectly honest, there's a lot more to the story about a person's work ethic and quality of work than there is to the rate of return on that individual. If a long-standing problem exists, there’s absolutely a need for action. But in a lot of cases, some of the people in my business who have the worst RRR are people who win us the most amount of business. And that's where the productive versus billable time comes in, is to understand what a person is doing as a well-rounded individual, rather than just that individual that we're selling time off.

    Brent: So looking at multiple dimensions of the business as it pertains to that person, not simply them as an output metric. You've gone through some of these processes of maturity and it sounds like at ORM, you've got them in a really good state and fine-tuning as you go. But you articulate the metrics that you're looking at and certainly connote a pretty mature organization. When you started on that journey of getting out of spreadsheets into more maturity, I'd love to hear and I think where listeners would really benefit from is your insight on change management. On gearing the organization up for that, probably articulating what was going to change, why it was going to change and then how that change was gonna be executed.

    And then in an agency that's chock-full of very talented folks articulating what's in it for me, is always the key because that drives a little bit of compliance. And of course, none of us have ever really lived until you've been chasing a thousand creative folks around the world to get timesheets in and so forth. But yeah, maybe just break it down, you know, the process of what was going to change, articulating why and what the benefit would be and then executing it. Was it kind of a big bang approach? Was it more incremental?

    Bear: I'm a believer in a more staged approach rather than a big bang. Although my personality is completely the opposite, I try to get everything done all in one go. So they kind of fight against each other, unfortunately.

    Brent: Did they ever Bear hug?

    Bear: I think it's more like if you've ever watched brown bears having it out. It's a battle. But at the beginning of 2021 when we implemented Mavenlink into the business, it was a big change for us in some ways. Because we were already working with a platform tool and it wasn't working great for us and we weren't getting the data that we needed out of it. We were having problems and concerns, but the end users enjoyed the product because it was fairly simplistic to work with. And what we had the challenge of doing was saying we wanted tenfold the data and information whilst not increasing the individual workload to give us that. In some ways there are successes and in some ways there are not, but the biggest thing for us is communication. And as you said upfront, there's always that ‘what's in it for me.’ And in a lot of cases, for us it was about explaining what was in it for the business. And the reason for that is because “We're all in it together,” is a saying that goes around a lot in the last couple years, but as a business like ours, we are. What we produce is the sum product of the whole, it's not an individual contribution that wins it.

    So understanding how the business was gonna be impacted was one of the first places that we went with it. You know, we're going to be able to do X better because Y. We'll be able to understand why last year we weren't able to give you enough training time. And being really communicative about it. I think hiding any of the things that you're about to do in order to even produce a wow factor at the end is just silly because people worry when they don't know the whole story sometimes. So we led everybody down the path of this is the product and we're actively training it on you right now, as we're showing you how it works. So we made that leap between introducing something to you learning it, kind of in a very seamless sort of way. We did that explanation and then immediately thereafter, people started taking part in seeing it and touching it and actively being part of it. And whilst that's happening, we're also able to iron out any of the thinking that we've done in advance because we've solutionized problems that we had. We've solutionized problems we didn't have, but everybody is gonna touch them. And same as with the spreadsheets, they're gonna break it in some way.

    So almost through active user testing of the implementation of our tool, we were able to refine and model the approach. And it was about a month-long period that we did this in and when we came out of it, we had a much better sense of how the tool was gonna operate for us and how the people were gonna work with it. And when we said we're launching this, everybody was very comfortable with the idea. Now, admittedly, we're a 60 person, 70 person business and you’re doing that on a much larger scale, it's gonna be a much different story. The amount of work that you need to do upfront ensures that all of those problems that you are seeing are actually dealt with and handled in a way that is gonna be beneficial to the people that you're working with. Highlighting if there's a change here, what will it do to this service? Or how will it impact the way that we communicate with our clients or work with our clients?

    Change in any business is often feared. I've heard a number of change managers say the worst part of their job is hearing from people that don't want to change. Why what we're doing is a bad idea. But change is inevitable, change is a constant. Everything in life is always changing and business will always change with it. The best thing that you can do is make people feel comfortable with the change that's gonna happen to the best of your abilities. And again, through communication, through the ability for them to be able to touch and test. If it's possible to get those cheerleaders on board who actually really like it and were there with you right from the beginning and transduce it. We were also lucky in the fact that part of the DCX wider business was already using the tool that we chose. And so we were able to pull them on, have them do their normal operations and see what came out of that. So we kind of had a very golden situation for this.

    Brent: And to your point around this notion of what's in it for me and then people who are reticent to change, as you've gone through this process and resulting benefit, have any of them come to you just anecdotally and said, “Gosh, this turned out pretty well?” And I see maybe profit sharing in the agency was better last year as a result. Or we were able to retain some folks that we might in a period of instability had to furlough or something tangible to that. Any success stories around that?

    Bear: Yeah, again you get both sides of it. So we've had people who have said that, for example, our integration with JIRA is absolutely fantastic, they love it. It makes their life so much easier because time just streams across, they don't have to spend as much time doing their timesheet at the end of the week. And you said earlier about chasing creatives around the world for them. I mean, every agency's problem is timesheets. So that person who comes back to it three weeks later, most of it's already done. And then on the other side, we had people who said that they find it awful, they like the old version better. They don't like that it automatically streams over because maybe they were putting in time there for a reason and they want to do this other thing. You never gotta win with everybody that's for sure.

    However, one of the project managers at the previous agency where we did this said to me that they found it easier to deliver their project because of the fact that they could trust that we had created the environment to give the data that we all needed. That he could trust in the system to say you have X amount left in your project, or you have this many tasks scheduled or what have you. And it was the right information because he had put in the care and attention to build the project, we had put in the care and attention to manage the system and the system data in the ways that we needed it. And we had put in the care and attention to create the reports that then output in a clear and concise manner, what they were doing and how they were impacting that project or the business. Which are always the good ones to hear about. It is always a feeling of great accomplishment when you make somebody else's life easier.

    Brent: Yeah, it sounds like in that case, to wrap on potentially a concept we talked about earlier, this notion that good operations in an agency consulting environment, create the conditions for success. So at this individual practitioner level, you were able to do that, create those conditions for success and it came through in a tangible way.

    Bear: Yeah and then other people won't notice anything has happened. That’s a wonderful saying, right? If you've done everything right, nobody will know that you did anything. Unfortunately for operations, that's also very true. If you're getting things right, people just think everything's running wonderfully. If you get it wrong, uh-oh!

    Brent: Listen, this has been great, so for our listeners, we've been talking to Bear (Andrew Forsyth) and his journey in operations, both personally from resource management into more of a full, comprehensive operation role. Currently leading change in operations at ORM. And before we wrap, any final thoughts you wanna leave somebody with? Maybe someone who's considering an operations role in an agency or making a switch from different practices and contemplating that. Anything at all, kind of as a final thought?

    Bear: I'd say I've done a lot of different jobs in my life, everything from manual labor to warehouses and IT roaming technicians and things like that. And it's probably one of the more satisfying roles I've ever had. If you make a career in operations, there's pretty much no end to the learning. It doesn't matter whether or not you have to pick up a new application or an entirely new tactic. You know, someone who's dealt with resourcing, who's suddenly looking at supply chain management, there is so much opportunity there. If you want to continue to flex and expand yourself, this is a role that does it forevermore.

    Brent: That's great. I appreciate the time, your depth of insight and level of details shared with our listeners today, so thanks again. As a wrap up and as is customary in practice, feel free to reach out to us here at podcast@kantata.com with any follow-up questions, suggestions for future episodes, anything at all. Again, that's podcast@kantata.com. Bear, again, thanks for the great conversation, really enjoyed it and I think our listeners will as well.