Firms of the future

[This post was written by VeraSage Institute Senior Fellow Ed Kless, who is the Senior Director, Partner Development and Strategy, at Sage].

One of my all time favorite TEDTalks is by Rory Sutherland, a principal at the advertising firm Ogilvy. His brilliant analysis was on display again at Zeitgeist 2011 in his talk, "Rediscovering a Lost Science."

Hat tip to Eric Fetterolf for passing along this blog post from Harvard Business Review's The Conversation, People Are Not Cogs.

This goes right to the heart of what Ed Kless calls the "E'ffing Debate"—that is, efficiency vs. effectiveness.

Islands of Profit in a Sea of Red Ink, by Jonathan L.S. Byrnes.

This book's fundamental premise is quite simple, and very true:

Nearly 40 percent of every company's business is unprofitable by any measure, and 20 to 30 percent is so profitable that it is providing all the reported earnings and cross-subsidizing the losses. The rest of the company is only marginal

Bob Harper, friend of VeraSage, and owner of Portfolio, a UK-based marketing company for professional firms, recently published a fascinating report: GRF is killing the profession.

GRF stand for "Gross Recurring Fees," and it has created a sense of complacency and entitlement in the profession, leading to a lack of innovation, dynamism, focus on value and customer service excellence, and other deleterious effects.

In general, there are four defenses for maintaining timesheets:

• We need them to price.
• We need them for project management.
• We need them for team member performance evaluations.
• We need them for cost accounting.

We here VeraSage have proven, without a doubt, that every one of these defenses is incorrect, and that there are superior methods and tools for each of these objectives.