In 1970 the Labour Party published a poster during the General Election describing the Tory opposition as “Yesterday’s Men”. It was a short-lived element of the campaign and was withdrawn very quickly. The Labour Party lost that the election, but we can understand the thrust that the Tory old guard had not moved with the times. Prime Minister Harold Wilson had some years earlier talked about “”burning with the white heat of technology,” which he saw as something in which the country should be involved. He believed in modernity or at least thought it was a good theme for winning elections.
As an aside I hope I can say that Wilson was not a conviction politician. He wanted to be Prime Minister, achieved that objective, and thought that was enough.
Perhaps that was not so much of an aside though when we see people in larger businesses promoted beyond their appropriate level in accordance with the Peter Principle. They are often yesterday’s men and women with yesterday’s ideas, just happy to be where they are. In the modern world, we have to adapt in business or our business dies.
Yesterday’s people stick with yesterday’s ideas. I have nothing against time sheets for seeing what directors, partners and employees do with their work time. I do have an issue with charging out clients according to how much work time is spent on them.
- It ignores the value of the work done for the client; perhaps a lot more than some arbitrary charge-out rate.
- It gives the client no certainty as to the bill they will receive, and
- the client might believe that your people will string out the time to charge more than your business deserves.
Because you’re worth it
I believe that as far as practical and especially in professional services, your client deserves a fixed price. That price should reflect the value of what you are doing. The knowledge you are selling is worth a significant sum. It may be saving your client a large amount of money and the value of that is what the client is buying.
After all, how much does an iPhone cost to make? The answer is a small fraction of what it is sold for. The customer is buying the experience, comfort she is in safe hands, and the valuable and probably money-saving service you offer. This means you can pitch your price at a level that makes a good profit.
You deserve it, don’t you?