50:7 Is time tracking actually holding you back?

Lee:

Welcome to the Trailblazer FM Podcast.

Lee:

This is your host, Lee.

Lee:

Before today's show, let me tell you two things. Number one, unfortunately my audio wasn't great. We had the wrong channel set, but I still wanted to share this episode. So we have used AI to enhance my audio. So it should still be a relatively pleasurable experience. The reason, though, that we want to let this episode out there live is because there is so much gold in there. When we're looking at how we manage and how we track time within our agencies, if we don't measure, then, well, we can't really correct things. We can't correct course. And my guest was fantastic in helping us understand how we can do this better in agencies. Also, be sure to stay tuned because there is a special offer right at the very end of the podcast with a code where you can get some money off a time tracking tool that you may be interested. And full disclosure, this is not an affiliate link. I'm not interested in making money.

Lee:

I think this is a cool tool.

Lee:

I think it's something that you might enjoy as well, but you don't have to use it. Do though, enjoy this episode and learn the value of time tracking.

Lee:

Welcome to the Trailblazer FM Podcast. This is your host Lee, and on today's show, we have the one, the only, it's Ilia, the marketing director of Toggl. Mate, how are you doing today?

Ilia Markov:

Very good. Thanks for having me, Lee. Really happy to be here.

Lee:

I am loving your glasses, by the way. So for the folks who are listening on the podcast, you're missing out on some prime glasses here. Go ahead and cheque us out on YouTube. There'll be a link in the show notes.

Ilia Markov:

This is actually my backup frame because I lost the really? Yes.

Lee:

Amazing. You have got an epic backup frame. I approve.

Ilia Markov:

Thank you very much.

Lee:

So, for the folks,

Ilia Markov:

I'm in the market for a new pair, so if you have any recommendations, please send them my way.

Lee:

No worries, folks. Let us know in the comments below on YouTube. Where should he go for a new pair of specs? So, for the folks who don't know who you are or who Toggl.com is, Ilia, could you give us a little brief bio?

Ilia Markov:

Sure, absolutely. I expect a lot more people know of Toggl than me personally, but as you said, I'm the marketing director at Toggl. Been with the company for over two years now, going into three. Loving it. Especially. One aspect of this, I've been through several different SaaS companies, but something that I love at Toggl is that it kind of sits on the crossroads between SaaS and agencies. Toggl is a SaaS company, but our customer mainly agencies and what we call knowledge service companies. Anyone providing their knowledge as a service really can benefit from our products. And that's something I love because I also have agency background. I've worked for a content marketing agency. I've even run my small content marketing agency. Kind of went from being a freelancer to running a small agency, which is, I think, the experience of many agency owners. And in this role we talk to so many agency owners, freelancers, knowledge workers in general, that it's really kind of like finding out what they struggle with and helping them out is what we do and something that I find very fulfilling. You're absolutely right.

Lee:

When most agency owners have become an agency owner because originally they started off being good at, say, creating content, designing websites, graphic design, et cetera, they then end up for maybe a friend building. Let's just go down the website track for now. They'll build a website for a friend, they'll start to realise they can actually get money for this. So they'll become a freelancer, they'll start earning good money, they'll get more business in, which is great. So they start hiring staff and before you know it, somebody who has zero business background is suddenly managing a team and managing clients and managing expectations and everything's going on. And I'd love to kind of share with you kind of where I was a few years ago. And I've got to be honest, sometimes I revisit some of these some months, especially in the stress area. So a few years ago I was a very busy agency owner. I was working all hours and it wasn't just me. So I was at the top of the chain. Here I am, the manager, working all hours, being contactable on holidays, et cetera. Very, very stressed out. And this was therefore reflecting in my team.

Lee:

My team too were working at capacity, they were putting in the extra hours. Me as the owner, felt guilty about that. But also I felt really frustrated because I wasn't seeing any profit on the jobs and I didn't really know what to do. If I sold more product, if I sold more websites, that was great. But then I'm putting more stress on my team and we have to work even harder. So we kind of stuck in this weird situation at the time where if we worked harder we might get more money in but we would probably burn out. And that kind of describes, I think, what a lot of agencies are going through. They either go through some of that semi regularly or they just find themselves stuck in that position where they are treading water. They're never quite making enough profit to grow, they're making just enough to survive, but they're not living a life. They haven't got a good work life balance. So I guess with your own experience of being a freelancer, of growing an agency, of working with Toggl and working with many agencies, what do you think are some potential issues that an agency owner in that scenario should start to explore?

Ilia Markov:

First of all, what you just described is a story we hear all the time. All the time, really? I think it partially comes from what you kind of mentioned a little bit earlier, where you start doing a specific piece of work, something that you're passionate about, that you like, you figure out that you're good at it and suddenly you have more work than you can handle on your own. And at that point you start bringing some help, maybe someone part time or even like a full time person. And at some point you kind of become the victim of your own success almost, I think. Because the thing is that as you start hiring and as you start building a business, the skills that you need kind of change. You're no longer the main doer of the work that you know you're good at, but you actually now need different skills. You need skills managing people, running an organisation, figuring out what needs to be done, selling, of course, getting clients, new clients, making sure your existing clients are happy and so on. So kind of the skills needed change. And that's where this break seems to happen.

Ilia Markov:

And that's how you start seeing these situations where people are constantly working and it feels like a constant grind, and you're just like just like a little thing can really tip you off balance and really kind of put your head on the line. Even many agency owners feel like that. Yes, it's true, we speak to many and one thing we see really constant with those agencies that are doing better is that the people who run those organisations really take time away from delivering the client work to think about how their business operates and what they need to do to improve those operations. And there's like two themes that we see with them. One is some of this time is spent on, yes, service work is inherently unable to be productized. That's one thing about it. But we see that those who take time to kind of productize bits of it as much as possible, either through describing processes, really outlining these processes and documenting them and making them repeatable and scalable as much as possible. That's one thing that kind of delivers success in that area of the operations of your organisation and the other thing is generating, collecting and acting on data as much as possible.

Ilia Markov:

And of course this is something that we specialise in at Toggl and our product kind of caters to that. But it's one thing that we see that when people start doing it, it gives them a much deeper understanding into the operations of their business and it kind of uncovers insight that they were previously blind to and now they are able to make much better decisions on the base of that insight. One such area, it's not the only one, but one such area is time. Because essentially at the end of the day, yes, you're selling your knowledge but you're not selling static knowledge that would be a product. You're selling knowledge as a vector almost. It's like knowledge applied in a specific direction because you're doing specific work for your client that you cannot just take and sell to another client. It's customised to that client. So that knowledge with that vector is what you're selling and that vector is the time you spent thinking about that client doing the work, delivering the work, maybe training them. There's like a whole lot of different things that you're doing with that knowledge and with the time. So once you start measuring your time, your main resource, your most important resource as a service organisation and kind of contextualising it what it goes on, you find these opportunities to improve that.

Ilia Markov:

The reality is many of our customers who come with us almost always 90% of the time, even more than that, maybe even 99% of the time, people come to us and they say we want to track time to make sure it ends up on an invoice, on the correct invoice. So as much time I spent working for a client, I want to make sure it's on their invoice and I get paid for it. And that's fair. As I said, many people come with that. But we see that once they start doing that, they start to develop an appetite for other ways that they can use this data to make even more optimizations to their business.

Lee:

I think a lot of companies do start with that kind of mindset, don't they? Of they're exchanging their time for money, they have an hourly rate, et cetera. And a time tracking service is great because hey, that goes on an invoice It's billable. On the flip side, I find time tracking for us at least has been extremely useful for us to work out how long something takes so that we can provide better estimates. We don't really charge per hour anymore, we kind of have some fixed products, we know roughly how long things take. We also understand the value that we provide to the client and we also understand what the market supports that we serve and what competitors charge, et cetera. So we can put forward something that doesn't represent necessarily the hours that we work, but it certainly represents the value that they are going to get and it helps us retain profitability. You mentioned earlier that the agency owners start to productize their service but I'm thinking it is very creative. It's quite hard to in my head right now and perhaps you can give me some examples. It's quite hard to productize creativity.

Lee:

You were saying about your knowledge, et cetera. You can't kind of put that somewhere. Well maybe there'll be an AI bot in the future that can just transfer your knowledge, I'm not sure. But when it comes to things like creativity, et cetera, how do they start to productize that? Because if you think of a design agency coming up with concepts, et cetera. The lead designer might be spending up to a week just on coming up with two concepts for one client.

Ilia Markov:

Absolutely. And that's what I meant when I said that service work, inherently you cannot turn into a product and you cannot productize it. But I think you can productize certain pieces of it. It really depends. Of course it really depends on what kind of work it is. If you are like a high level, highly paid designer who comes up with logos and brand concepts, yes, probably very small bits of your work will be productizable. I don't know if that's a word, but other pieces, yes, you can, let's say in a content and SEO agency, parts of the work are not like you cannot productize writing a blog post on a specific topic for a specific client. That needs to be done. But for example, building internal links or other parts of the SEO, of the technical SEO work. Yes, you can have like a process document that you give to a person and they just follow step by step. So that's the idea of productizing parts of the work.

Lee:

So I guess then, just trying to think of, say, the design element, let's go back to that kind of original web designer portion. I imagine there are a few things that you can productize that lead up to the designer taking over for the concepts. Equally, there are things that you can productize afterwards as well. So leading up to you could have a discovery package, which is the discovery to help the client develop the overall design brief. It still requires somebody, but it doesn't necessarily require the designer. It's just a block of time. You can put your process together with regards to how the documentation will be put together, and then that can be provided to the designer. I'm just trying to think of different elements that might be productizable. Obviously you have things like care plans when a website's gone live. That's something that, again, you can essentially automate and provide processes and procedures for.

Ilia Markov:

Even parts of the admin work can be productized. That idea that you mentioned of figuring out how long things take, so then it doesn't take you as long to provide a quote is something that comes when you have enough data and you understand. And that's where the idea of contextualising your data, not just generating a bunch of data, but also adding context to it. So then you can go back and you can, for example, say, okay, I have to give a quote to a new client who's asking for a website. The specifics are such and such, maybe like five pages or ten pages. It's like a fairly simple website for a client. I can go back and see how long it took me to create similar websites for the other ten clients I've done websites for, and then pretty quickly give a quote to this client. So I don't have to kind of go through the whole process. So that's kind of the idea of using your data to productize parts of the work that you do that's helpful.

Lee:

So then thinking back at previous projects that I have time tracked, is there anything that we can do when we track our time to make that a bit more granular? Because if I think of say, the last two projects we did, one project was pretty much typical. We nailed it in the kind of 50 hours that's usually predicted for that sort of build. But the second project had a load of extra kind of last minute work. There was content missing from the client, there was an error with one of their service providers, et cetera, which added about 20 other hours to the overall project. So that was all unexpected time that we weren't aware of. Now if we were to just look back at the last ten projects at a high level, we might not necessarily account for that or that would apply. Should we apply that unforeseen 20 hours as the average across those ten projects because things go wrong? Or should we be assigning that, I don't know, a particular tag called unexpected and then discount that when we're looking back over the past few projects?

Ilia Markov:

Well, if you have ten projects where something goes wrong and it goes significantly over budget, I think it should be part of your overall data set. So now you know that roughly one in ten projects will have something. So you can kind of build that variability in the quotes that you're giving, either by putting a little bit more to each quote to kind of protect yourself like some clients, that one project which will kind of mean that you're putting the extra cost, you're kind of spreading it over all your other clients. Or you can have some kind of clause where you say, well, we have like this 20% overcharge in case things go wrong for this and this reason. So there are different ways to approach this. The idea is having this data gives you the understanding of what you need to do. Because now you know, based on the data that you've generated, your team has generated, and that you have, you know that roughly this project takes us a project of this type takes us 50 hours once every ten projects or so. It will take us 70 hours. So you have very stable basis from which to build and figure out how to provide for yourself in these cases.

Lee:

Measurements is complete guesswork exactly that's the thing.

Ilia Markov:

Or you're kind of thinking, well, it kind of takes us 55 hours times this much exactly. And then that's how you get in the situation where you're like, I'm working so hard, it's always just break even point. I'm super stressed. What do we do? Do we work more? I'm going to burn out the team. By the way, yes, I know life happens. We all have to work extra sometimes. But if that's happening all the time and all the time, and I think that's one of the reasons why you see such a high level of turnover in agencies, especially for agencies. Most agencies, it's very hard to keep the more experienced people, the more knowledgeable people. That's how you get in this situation. You can't always have your team burning the midnight oil every night after night. You kind of have to. Yes, sometimes it happens. It's fine, we all understand it. We always have these crunch times and so on. They happen in SaaS as well. It's not just agencies, but if you're always running this way, I think you're going to lose your best people first.

Lee:

So I remember back in the day when we started introducing time tracking, that there was a little bit of pushback from the team. I think they felt like we might have been micromanaging them and expecting them to work as efficiently as possible and work even more hours. And again, that was potentially part of the culture that we developed here. This is back in 2008, 2009, the recession was happening. I was really stressed out, so I can imagine that's what they thought. So how would you recommend an agency owner pitch tracking time to their team without them feeling that anxiety or that concern or that they're being spied on?

Ilia Markov:

Yeah, I work for a company that produces time tracking software. I definitely drink the Kuaid, but even I wouldn't suggest that anyone gets up and they're excited to track some time. I know how it is. If you go to Reddit and you search time tracking, you'll see people saying, oh, the worst part of working for an agency is time tracking.

Ilia Markov:

Having said that, a lot of people say that Toggl makes it bearable. And I'll take that. It's something I'll take, and it's true. For us, it's a combination of two things. One, it's just making it super easy and as streamlined as possible, as natural as possible. Of course, we are looking I'm not going to surprise anyone by saying that we're looking into how AI can make it even easier. That's one thing. Just making it easy, like as unobtrusive as possible. The other thing is leaving people in control. We have a very strong stance. It's part of the brand, actually, that you should never use time tracking for monitoring or surveillance or any of those things. We don't have any of those features in the software. STOGO is a very bad fit if you want to use time tracking to spy on your screenshots, et cetera.

Ilia Markov:

We don't have any of that. Plus, it's very easy to cheat the software. If you want, you can just add manual time, there's no problem around it. Or just change your time entries. So we want to leave users in full control of the data, the data they generate, and they share with the rest of their team. And that's what we hear from many customers, actually, that they come and they say, I want Toggl, because this is the easiest tool to introduce to my team. Otherwise I'll have a revolt.

Lee:

Well, I guess positioning wise, then I could position it to the team and say, hey, look, we found a way of tracking our time that puts you in control as one of my team members. The purpose of this is not to spy on you, is not to make you work faster, et cetera. The purpose of this is to help us as an agency, understand how long different aspects of any project takes so that we can provide better quotes. If we can provide better quotes that are more profitable to us as a business, then in theory, we can take on less jobs, do more of what we enjoy, and even have time, all important time, to take off, have holidays, have vacations, chill out, maybe explore other ideas and other projects.

Ilia Markov:

Exactly. It's two things for me, which are key trust and transparency. So, first of all, the trust is explaining what the use of time tracking will be, making sure everyone's doing it, so no exceptions, everyone does it. And then showing how the data generated is helping everyone. Too often. I think one mistake that well meaning agency owners make is they start with time tracking. They kind of explain what the purpose is in the beginning, but after a while, it becomes a black box because, okay, you're tracking some time, but you never see what happens with the time you track how it's used. We've heard of cases where development agency, the most senior developer, is working on bugs like they're debugging work for clients. And time tracking is one thing which helps uncover this. And then it sparks a conversation around, well, this asset, which is like, they're really experienced, very highly skilled. They should be doing delivery work, like delivering higher value work for clients. We can hire someone or outsource or hire part time or full time, whatever. We can hire someone more junior to do this low value debugging work. And this is where everyone starts seeing the benefit, because now your experienced developer, they're free to focus on that work, which they probably find more interesting anyways, while you've just created a new place, whether it's part time or whatever, for a new person who can come in and kind of start working on development.

Lee:

Exactly the scenario that we discovered here. So we've got one of our developers is a WordPress developer. He's brilliant, and we develop a lot of WordPress plugins. But when we were evaluating the time that we were spending on things, we noticed that he was spending an awful lot of time on CSS. So a lot of the plugins that we build need to output beautiful interfaces in WordPress admin and equally output something in the front end of the website as well. Problem is, he's terrible at CSS. It takes him absolutely ages. He's not a very visual person. He's logical, he's a programmer, he can create amazing code. But CSS was taking him way too long. So what we were able to do is essentially assign that to one of the front end web developments and we've kind of introduced that workflow. He will build the back end, he'll do the basic output and then he'll send the brief over to the CSS developer to in half or a quarter of the time, output some beautiful CSS and make whatever the PHP developer that originally looked really ugly, make it look beautiful in a fraction of the time.

Lee:

But we weren't aware. I remember getting frustrated, thinking, what's holding us up? Why are things taking so long?

Ilia Markov:

This is a brilliant example, because it showed this informational asymmetry right, because especially if you as a founder or a manager, if you're not an expert developer, you wouldn't know that for someone who's super experienced in PHP or whatever, they might actually not be so experienced with CSS, so you wouldn't know that. You'll be completely blind to that. And this is how you start to notice these things.

Lee:

Well, the other thing we noticed as well was the bugs were always very visual. They were visually based as well. So he was doing the CSS, he was adopting a lot of Practises that we wouldn't recommend, which includes going into stack overflow and copying and pasting how to vertically align and centre align something. But the problem is that the article was probably ancient, so it just had a very big mess of code, lots of important times as well, to override different things that weren't working and the mobile responsiveness wasn't working. So, again, we were able to squash the amount of time we were working on books, because we went over to the CSS developer, they were able to put something out that pretty much worked straight away with minor bugs. Now that's even more time saved on top of that. And you mentioned in your own example, didn't you, about somebody who is spending a lot of time on bugs and perhaps you can hire somebody in. On the flip side, perhaps there's a problem earlier on in the chain where your team are developing and why are they creating so many bugs that some poor person has to sit there squashing them nearly full time?

Lee:

So, as an agency owner, then, I've been tracking time on a few projects and I've got the data together. I can see that one person spends an awful lot of time on certain tasks, et cetera. How would you encourage an agency owner to have an open conversation with people? Is this something that we do as a group or is this something that we would first do kind of on a one to one level to say, hey, we've looked at the data, we see there's this significant time being spent on plugin development. Let's use the example of my developer there. How would we approach that without them feeling attacked or without them feeling defensive? Or do we flip the script and ask them to come to us?

Ilia Markov:

Well, it really depends on what kind of conversation you have. If you want to kind of address with a team member, I would suggest first of all, if it's something that's pertaining to a specific team member, a one on one is definitely more appropriate. That's how, regardless of time tracking, if there is an issue with someone on my team, I will always go and talk to them first and kind of see where they're coming from. And then I would always approach it with a very open mind, looking to listen more than I talk. So understand, for example, if it's something that's taking too long, why it's taking too long, what is the struggle, what is the source of the struggle? And then looking to improve that first and foremost. And that's why I also said this idea of look for ways to use time tracking to first help your team make their lives easier. One thing that I always discover when working and talking to people is that people wouldn't always come to you and kind of mention they're struggling with something or like that something's getting in their way. They'll try to do it on their own because they don't want to come across as complaining too much or whining or any of that.

Ilia Markov:

So that's why I always suggest having an open conversation, looking to help, looking to remove obstacles and roadblocks. And then again, going back to that idea of not making time tracking a black box, just revisit the whole concept based on what you've learned, working with people individually, use those, learnings anonymize them as well and then go to your team and kind of try help everyone. Educating and going back and explaining to people how to track time and why we are tracking it as a team and how we're using the data is something that needs to be done every so often, not just when you're starting with time tracking.

Lee:

So regularly remind everybody why we're tracking time. It's the long term goal, the better profitability, more work, life balance for everybody, et cetera. If we want to look at each individual, that would be a direct conversation with them in a supportive manner to say, hey, we see that this is your current workload. This is how long you're spending on different types of tasks. Where do you feel your strengths are? Where do you feel your weaknesses are? Where do you feel we can support you to help reduce some of that time. Is that take some of this work off of you? Is that give you some better software, is that some training that you might need, et cetera. So that's kind of a one to one conversation and that's not anonymized. That's direct, hey, this is your data, let's discuss and let's help you. And that's a private conversation rather than in front of everyone. And then the other type of conversation is the anonymized data, which is as a company as a whole looking at projects to say, hey, Brooks, we're improving on our website delivery or our website turnarounds, et cetera, where do we feel as a corporate company as a whole, we can make further improvements, et cetera.

Lee:

So that's more the anonymized corporate conversation without anybody feeling singled out.

Ilia Markov:

And also the other side of the coin, it's not always your team. Sometimes you have to kind of flip the coin and again, using that context that you have, look at your clients, your projects, types of projects. For example, start by seeing, okay, one thing that I regularly work on or my team regularly works on is creating websites. Are these projects inherently profitable for us? Are we actually making money on these projects? Then looking by and this is where this context, like having time data with context really helps then looking at clients and saying, well, this client, they actually look like a great client, but they take us so much resources to service that we're actually losing money on them. And we very often see that as our customers start using their data in this way, this is where they get to the point where they're like, well, either need to I need to have a serious conversation with this client and either raise their price or we just fire them because there's no point. We're actually losing money on them.

Lee:

Of course, because you would be able to attribute that you had a meeting with said client. And if one client needs lots of meetings to review change controls, to review different versions, to ask questions or to be chased for content, et cetera, that's going to add up on the timesheets that you're going to be able to see out of all of our clients. That particular client over there seems to need a lot of servicing, I e. Therefore not profitable. But that's, again, something that I wouldn't necessarily see without it because my team are nice, they jump on the call, they'll jump on quick ad hoc calls regularly with clients when they request it. And I have no clue otherwise. So I think today, mate, you've absolutely solved the need. I think to people listening in, if they are stressed out, they don't know where all the time is going and they want to call some of that back, then using some form of time tracking software would be great. And it's good you're here because rumour has it there is a very special offer for trailblazer listeners if they would like to have a go with Toggl.

Lee:

Could you let me know all about that, please?

Ilia Markov:

There is you're absolutely right. So for listeners who want to give Toggl a try, we have a special offer. If you get an annual plan. We have a one month free trial for everyone to try the full suit of the tools. If you want to stick with Toggl after that and get on an annual plan, we have 20% off for new customers. All you have to do is use coupon code trailblazer folks, can I encourage.

Lee:

You head on over to Toggl.com. There is a link down below in the description and a reminder of that code, which is Trailblazer. You can get your trial. You can also get 20% off if you want to stay with it. For us, using time tracking software has been incredibly important. Oh, and by the way, this is not affiliate marketing, this is my guest. I'm interested in time tracking. I want to introduce the concept to you. And if you already know about time tracking, I at least want to encourage you to engage in it because many of us as agency owners are aware that time tracking software exists, that it can be useful. But I think today you've heard some really compelling reasons as to why you should start instigating something within your organisation with a view to helping you be more productive, more profitable, and to get that work life balance back. So if you'd like to give Toggl a try, and you don't have to, but link is down below code trailblazer if you decide to stick around. Mate, thank you so much for your time. It's been very eye opening. I really appreciate it.

Lee:

All that's left to do is say goodbye and thank you.

Ilia Markov:

Thank you so much for having me. Really enjoyed it Lee. Thanks, buddy.

Lee:

Take care.