Timesheets kill cre­ativ­i­ty and are bad for agency culture.

I dis­agree.

Numer­ous arti­cles have been writ­ten on the sub­ject. The phi­los­o­phy is that you sell cre­ativ­i­ty, not hours spent, like a plumber or a lawyer. The price of a new iden­ti­ty is deter­mined by a lot more than just how many hours the team col­lec­tive­ly spent cre­at­ing it and for good rea­sons. Clients don’t chose to work with your agency because you are the quick­est to turn­around that logo, but for your unri­valled cre­ativ­i­ty and your exten­sive expe­ri­ence in the matter.

Fur­ther­more too large a focus on the con­tri­bu­tion or input, in hours and min­utes, of each team mem­ber is bad for cul­ture, see­ing what counts is the end result.

If track­ing time is the rea­son you are sell­ing hours instead of cre­ativ­i­ty or if track­ing time is the rea­son for cre­at­ing rival­ry in the team, I can see why one is against it. How­ev­er I don’t believe track­ing time itself is the issue here. What hap­pens with the data is.

The real­i­ty is that in an indus­try where bud­gets are being squeezed few­er clients use your cre­ativ­i­ty as the sole rea­son to work with you. The mar­ket is incred­i­bly com­pet­i­tive and oth­ers will often ser­vice more work for the same fees.

I’m not say­ing drop­ping prices or over-ser­vic­ing is the right thing to do, just point­ing out what you’re up against. As a defend­er of cre­ativ­i­ty you don’t want to join in the down­ward spi­ral of deliv­er­ing more for less. But at the same time the pres­sure is on to make the right deci­sion when that loy­al client of 15 years is forced to shop around now that their bud­get is cut.

So unless you’re run­ning an agency that is immune to these mar­ket trends, with high prof­it mar­gins, it is cru­cial to keep an eye on all met­rics from a busi­ness per­spec­tive. Includ­ing time spent.

While timesheets aren’t meant to deter­mine the sell rate of a project, they are instru­men­tal for track­ing prof­it. A healthy agency strives towards a 15 – 20% oper­a­tional prof­it mar­gin. When an agency finds itself with mar­gins too tight or even los­ing mon­ey, dif­fi­cult deci­sions need to be made. These deci­sions won’t just be based on unri­valled cre­ativ­i­ty and exten­sive expe­ri­ence either.

Along with how good it felt work­ing on a cer­tain project and how proud you are of the end result, you want to use finan­cial met­rics to decide which clients to keep and which once to ditch. What types of work to try and find more of and what type just isn’t worth the effort. Who in the team is best qual­i­fied to han­dle spe­cif­ic tasks. When it’s appro­pri­at­ed to do anoth­er cor­rec­tion round free of charge and when the client is tak­ing the mikey.

You want to work with clients that bring out the best in your team. Clients that push you for your most cre­ative work, but who are also grate­ful and respect­ful of your efforts. Clients who val­ue your con­tri­bu­tion. At the end of the day, you run a busi­ness that needs to sur­vive, not just one that gets a lot of likes and followers.

There is also a big dif­fer­ence between pro­duc­tion stu­dios and cre­ative stu­dios. One does the exe­cu­tion, which is eas­i­er to mea­sure in time spent or cost. The oth­er is more a strate­gic part­ner with val­ue that can only be mea­sured in results. If your focus is 100% cre­ative and strate­gic, I can see why you may not want to track time. But in many agen­cies, there isn’t a clear divi­sion between the two types of work. It some­times varies from cus­tomer to cus­tomer and project to project.

The biggest issue with timesheets inter­nal­ly is how they are used by man­age­ment and per­ceived by staff. I have dealt with agen­cies that try and use timesheets to cal­cu­late staff con­tri­bu­tion and to fig­ure out staff prof­itabil­i­ty. Hav­ing your team work under a con­stant latent threat of cas­ti­ga­tion for not doing well enough, is prob­a­bly not just the best way of killing cre­ativ­i­ty, but also to install unpro­duc­tive rival­ry in the team, not in the least between the cre­ative and the accounts team.

Prof­it per indi­vid­ual can’t be expressed by work­ing out the total rev­enue against the hours spent per per­son. It’s a short­sight­ed way of mea­sur­ing quan­ti­ty with­out tak­ing into account qual­i­ty. It does not val­ue cre­ativ­i­ty, or a per­son deliv­er­ing work faster than expect­ed, or a top notch sales per­son who just man­aged to get a pre­mi­um price for the work done, or a project that was just fun to do and made the team hap­py, or a client that is a great ref­er­ence, or time spent learn­ing new tech­niques,… Or the oppo­site of each of those. 

If quan­ti­ty is all that mat­ters, peo­ple will just be com­pelled to try and get the job done as quick as pos­si­ble, to not accu­rate­ly record all the time it took to com­plete. They will record hours they didn’t spend just to get their week­ly totals right.

Even though you’re not nec­es­sar­i­ly sell­ing hours but results to your cus­tomer, time is often the cur­ren­cy used inter­nal­ly for organ­is­ing work. You esti­mate how long some­thing might take and sched­ule in the work accord­ing­ly and the sched­ule is adjust­ed as you go. Cre­atives will try to get as much time as pos­si­ble to per­form their best work, account man­agers will be pushed to get the job done for the least amount of (time and) money. 

The solu­tion is to intro­duce trans­paren­cy in the busi­ness. Cre­atives need to appre­ci­ate the finances of a project as much as account man­agers need to appre­ci­ate cre­ativ­i­ty. They need to be allies rather than adversaries.

So be trans­par­ent about bud­gets and how they came about – trans­par­ent on how much a project was billed for and how much prof­it was made in the end. Or not made. Make sure cre­atives are involved when esti­mat­ing how much time some­thing is going to take, rather than to assume it will be sim­i­lar to that oth­er project. Give cre­atives space to plan their own work, rather that decid­ing for them what they will do today and exact­ly how long it can take.

Set the goals for the agency as a team and then work togeth­er as a team to achieve those goals. The only way you can do that is to make sure every­one is on the same page and it’s a shared responsibility.

If you are afraid to give cre­atives insights into your company’s finances, out of fear that they might leave, when they see how much you are charg­ing their work for, per­haps just not pay­ing them enough. Because if you’re pay­ing them a fair salary and your rates are in line with the mar­ket, the grass is just going to be exact same green on the oth­er side. If you are afraid they will leave and set up their own stu­dio, trans­paren­cy will make them under­stand it isn’t as easy as they might think.

At the end of the day your com­pa­ny needs to make mon­ey in order to pay salaries and rent. It needs to make prof­it in order pur­chase new com­put­ers or grow the busi­ness. There is a respon­si­bil­i­ty to pro­vide a sta­ble work envi­ron­ment for employ­ees and be a reli­able part­ner for your customers.

If you don’t care about the mon­ey, then you shouldn’t be tak­ing orders from clients and you can call your­self an artist. But a cre­ative agency, as impor­tant as it is to defend cre­ativ­i­ty, still needs to be a sus­tain­able busi­ness. Met­rics need to be tracked, just like any oth­er busi­ness. Since you can’t mea­sure bricks laid, units rolling of the con­vey­or belt or miles dri­ven, you’ll just have to track time spent.

If done cor­rect­ly, track­ing time is not a nec­es­sary evil, but a way to make your busi­ness healthy.