Back in the beginning of March I posted this on Twitter:

Then, just yesterday, I posted this:

Prospective clients (often big companies with legal departments or government agencies) will require you submit your financial statements to them as a condition of an RFP. The idea behind that is so the organization can minimize their risk by making sure that you're financially solvent. They don't want to engage with a company that might be here today and gone tomorrow, because it will cost them time and money to re-engage with someone else if you end up disappearing. The information can also shed some light on how your company has (or hasn't grown) over the years, and which way you're currently trending. Its a value estimator. It all sounds perfectly reasonable on paper, right?

Well, we don't accommodate those requests.

Why? Well, I wish I had a better answer other than, "It's none of their business." But that's it.

Sure, you can sign an NDA so there are assurances they won't go discussing your numbers with anyone else. But for me, an oragnization that asks to see your books is an organization that probably didn't have you on their radar in the first place, or at least not on their short list. If you're responding to an RFP, you can be assured you're one of umpteen other companies that is also responding to the RFP. The way I see it, if an organization really wants to work with you, they won't treat you like a number. They'll take the time to look at your work, ask you tough questions, understand your history, read your articles, and talk to references you provide them (which, for the record, I think is a perfectly reasonable thing to do). The health of your organization will be evident by your longevity, your client roster, your thought leadership, and most importantly, your body of work. It won't be based whole or in part on how much profit you made or what your accounts payable balance looks like.

I see it as a filtering mechanism, much like I view requests for spec work. It's a safe bet that if you're asked to show how much money your company makes (or doesn't make) or what kind of work you'll do for free to prove your worth, you're not being considered for what makes you truly valuable.

I like it that people care when we try things at Happy Cog. People may think it's sliced-bread wonderful or completely bogus, but they care enough to write blog posts, send us tweets, and drop us emails.

We launched a new blog called Cognition. It's about a week old. We are trying something out, and maybe you've seen it. We are experimenting with using Twitter as a delivery mechanism for comments. I won't try to explain the whole back-story for this, as my colleague Greg Storey has done so already, and Jeffrey has introduced the idea in his inaugural post.

We have gotten lots of feedback about our experiment. Some of the challenges we're hearing are:

• Our comment thread is largely comprised of retweets
• Tweeted comments add little value to the article (little signal, more noise)
• The blog post comments we incorporate break up the conversation
• If someone wants to respond to a blog post comment, where do they do so?
• The tweets, when they appear in people's timelines, are out-of-context
• We should be instituting @ replies
• I don't have a blog, so I can't offer any longer-form comment to Cognition
• A lack of engagement between commenters
• "Commenting is already done right at Smashing Magazine" (my favorite)

There are a poop-ton of positive comments as well floating around out there, but it's always easier to point out what's wrong with something. I do it all the time.

If you feel you must add to this bulleted list on this blog that features ye olde tyme comments, I won't stop you. But that's totally not the purpose of this post. The purpose is to say that we hear you. We are paying attention. But, we don't typically react in knee-jerk fashion. There's an undercurrent of urgency I'm sensing, like if we don't fix this in two days, screens everywhere will start overheating. People were pissed that it took so long for BP to cap a gushing oil well. That, I get.

If you think you're having a passionate debate about this outside of Happy Cog, you should see the conversations flying around internally over here. It's like this.

Long story short, just because you didn't see any substantive changes with the publish of my post yesterday doesn't mean there won't be any coming soon. Like any good experiment, one needs to carefully observe, then react.

I consider myself a foodie, but not in the traditional sense of the word. I'm not regularly seeking out the latest Thomas Keller creation or José Andrés' unique brand of molecular gastronomy on a regular basis. I enjoy a well prepared burger or some solid french toast just as much. That said, I fully appreciate a good chef's imagination and skill, and I always pay attention to the thought and detail that goes into planning a restaurant's aesthetic and physical experience. Philadelphia icon and restaurateur Stephen Starr likens dining to a theater production. The vibe of the place you eat in is just as important as the food, and I agree wholeheartedly.

Any good restaurateur (who doesn't have to be a chef themselves) scrutinizes every aspect of his or her business - from conceptualizing, to scouting locations, to cost control, to hiring quality people, to sourcing fresh ingredients. But those are only pieces of the puzzle. A successful restaurateur is also a professional marketer. They understand where the opportunities are. They are able to execute their concepts and effectively differentiate themselves from competitors. And they are nimble - capable of adjusting strategies to serve the fickle dining public. Through careful, consistent application of these principles, they start to establish themselves as a brand - a brand they can eventually introduce into other markets.

If they aren't able to do this sort of thing themselves, presumably they are hiring firms that do such things for them, like Bullfrog & Baum.

I have watched the dining revolution unfold in this city right before my eyes. I thank recent Philadelphia-based visionaries like Stephen Starr, Jose Garces, Marc Vetri, Daniel Stern, Michael Solomonov, Leigh Maida and Brendan Hartranft, Audrey Claire Taichman, Chris Scarduzio, William Reed and Paul Kimport, Tom Peters & Fergus Carey for giving my city what it really lacked. Variety.

Being a principal of Happy Cog, a web design agency, perhaps you know where the focus of this post is headed. I'm not the first to write about this, and I won't be the last. It's 2010. I cannot for the life of me understand why so many smart restaurateurs (or the agents that work on their behalf) simply fall flat on their face when it comes to their online strategy. While I believe their intentions are genuine, many simply don't understand the values of accessibility and usability. It frustrates the hell out of me - not so much as the president of a standards-based web design company, but as a human being.

Read the rest of this post »

I read Rework by Jason Fried and David Heinemeier Hansson, and I loved it. I have always subscribed to the business theories of 37Signals, ever since they published their manifesto. (Ok, that's three links to them in one post. The rest are for sale).

A particular point they make that resonates with me is one about planning:

It's OK to wing it. Just get on the plane and go.

Now this is kind of weird for me, because I'm a compulsive planner for most things in my life. However, when it comes to running a business, I rarely do long-term strategic planning. Years ago, I wrote a business plan because I thought I might need to get some investment help from someone, and that's what they wanted to see. I also wanted to show my business partner that I was serious. I certainly didn't write it for my own benefit. I never needed to submit it to an investor, and I haven't read it once it since I wrote it.

I don't think you can ever say things like:

• In 5 years, we will have 30 employees
• In 3 years, we will double sales
• A year from now, we'll have 10 directors
• In 60 days, we will have a giant client

To me, there's a real difference between planning and goal-setting. The examples I listed can certainly be goals to shoot for. But you can't plan for that stuff, because it's worthless to do so. You don't know what will happen in 5 days, let alone 5 years. For all I know, I could end up lying in a bed wearing sneakers listening to a dude like Marshall Applewhite convince me to drink a delicious sleepy drink. Who the hell knows. The point is, take the information you have now and make decisions based upon that, not what you think may happen.

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Oh, and P.S. -

I just looked at that business plan for the first time since I wrote it. It says we will:

• Get a bunch of money from angel investors (nope)
• Design blogs for bloggers (kind of true)
• Design Google AdWords campaigns (nope)
• Host websites (nope)
• Provide a host of 'a la carte' services (nope)

There you have it.

For many of you, this may be as exciting as cleaning your toilet. I must admit, it was a laborious post to assemble, but for those of you who run client service businesses, this is good stuff. I think you should be doing some flavor of analysis like this.

I mentioned in my Employee Review Season post that I assemble "quantitative performance data' to help me start to assemble a view of how our employees are doing. This stuff is important to look at on an individual basis, but the cumulative numbers really give you an insightful view into the health of your organization.

First, you need to find yourself a decent time tracking tool. We use Tick from the fine folks at Molehill, which I find invaluable. It is elegant, hooks nicely into Basecamp, doesn't try to be an invoicing tool, has robust export functionality and thoughtful print styling. Each time I run payroll, I do a time data export from Tick. That gives me a nice little CSV file that I can open up in Apple Numbers or Excel and begin my obsessive compulsive analysis.

I reorder the data by employee, then client, then project, then date. Then I add up the total time spent on each project, and calculate the percentage of each employee's paycheck that goes to each project. You'll see all of this in the Apple Numbers screen grabs that follow.

In each of these scenarios, let's make the following assumptions:

• This employee (John Doe) gets $1000 a paycheck every two weeks
• We bill clients $100/hour for his services
• There were 80 total possible hours during the pay period

'Billability'

In the client services business, you want your people to be working on projects that pay the bills. Duh. You want to minimize the amount of time they're working on internal projects (with exceptions), or even worse, not working. 'Bench sitting', as they say. Companies with lots of 'bench sitters' don't stay in business long.

An important metric to keep track of is an employee's 'billability'. My spell-checker keeps trying to tell me that 'billability' is spelled incorrectly. I think the word is made up, but I still use it. What is billability? Put simply, it's the amount of time someone spends working on billable client projects, recorded as a percentage.

How do you figure this number out? Simply subtract the non-billable work from the billable work and divide by the number of hours in the pay period.

This will give you a percentage. I try and make sure all of our folks are above 80% billable. This number will dip from time to time due to vacations, sick days or internal projects. But the idea is to make sure they're making money for the company on a consistent basis.

'Utilization'

'Utilization' is simply the percentage of time someone is working. If someone's utilization is pinned at 165%, you know you have to do something. It could be telling you that you need to hire another person to take the load off of that person, or you need to redistribute workload amongst the rest of your team. Then again, it could mean that this person is working on something much longer than they should be. The numbers will raise the flags - only your investigation will determine what's causing them.

On the flip side, if someone is under-utilized, (anything below 80%), you have a different kind of problem. This is more alarming than a low billability percentage. This means someone doesn't have enough work, period, let alone billable work.

'Employee Profitability'

You know how much you pay your employees, and you should also know how much you're billing your clients. This calculation can get more complex, but the easiest way to gauge how much an employee is earning or costing you is to perform a simple bi-weekly profitability calculation.

You obviously want this number to be above zero. You can scrutinize that even further by factoring in other hard and soft costs to get a truer picture of profitability, but this is a nice high-level indicator.

So these are some metrics I pay attention to. This sort of thing, in some flavor or another, has been practiced in every firm I've been a part of. Is it a part of your analysis?

Things don't happen by themselves. If you want to better your situation, do something about it. And the best way to pull it off is by sweetening the pot for both sides.

Before I hooked up with Happy Cog, I was building a 'child' company for an international user experience consultancy that was to focus on standards-based web design. I had the buy-in from my bosses, but I had no brand. I created one, and then set out to organically build it. My priority was to get some talented people on staff that could not only do great work, but promote the brand. Like lots of folks, I had always admired the work of Philly natives Jason Santa Maria and Rob Weychert. I knew Jason and Rob were good friends, and they were both working from home on freelance gigs. Working from home can be liberating, but it can also be a drag. I worked from home for a while, and I started bouncing off the wall after a while.

So, I decided to try and create a win-win for everyone. I offered Jason and Rob free office space on the 20th floor of my employer's swanky building, new computers, office supplies, utilities, etc. Luckily, my employer was receptive to the idea and was instrumental in making it work. Jason and Rob worked with me on a contract basis a few days a week and then had the freedom to work on their own gigs the rest of the time - all from the new office. I got the benefit of their talents and their visibility (they blogged regularly as well as on behalf of the company) and they got the benefits of working together, escaping from home, and meeting new friends/colleagues to boot. I'm lucky to consider both as friends to this day.

Jason and Rob also worked with Jeffrey Zeldman of Happy Cog on a freelance basis while doing work for me. In fact, the days that they weren't working on my stuff, they were largely working on his. It just made sense that we could all be working together someday on the same projects as the same company.

I approached Jeffrey with the idea of joinging forces in several conversations leading up to South By Southwest, and at the conference we sealed the deal (for this and more history of Happy Cog, check out Jeffrey on Dan Benjamin's Pipeline Episode 1). I became the president of Happy Cog. Jeffrey extended the Happy Cog brand to another market (Philadelphia). Our ability to take on more work doubled, and so did our bottom lines. Another win-win. We've since replicated that model by adding the immensely talented Airbag Industries to the Happy Cog family.

This morning, I read that Conan O'Brien accepted a deal for a late night show with TBS.

TBS? Seriously? Why TBS?

I thought he had been talking to Fox, and I never would imagine TBS would be a contender for his services. Well, according to the New York Times, Steve Koonin, the president of Turner Entertainment Networks, approached and pitched Conan and his people directly. He just went for it. Who cares if you're the underdog. Make your case. Conan was apparently apprehensive because he didn't want to oust George Lopez from his time slot like he'd been ousted from his by NBC and Leno. But Lopez was thrilled, and told Conan so personally. It made sense.

This is a win for TBS, because they got a guy who fits squarely in their demographic and they stand to make considerable ad revenue. This is a win for Lopez, because now he has a guy like Conan O'Brien to feed viewers straight into his show, which will increase his ratings and benefit him and TBS further. And this is a win for Conan, because TBS is giving him complete ownership and total creative freedom, not to mention some decent coin. Win, win, win.

If you see something you want, go for it. Be creative. Make sure everyone wins.