A few notes on moving from utilization to productivity:

If you're still billing by the hour and your clients are, inexplicably, still paying you based on the number of hours worked, then you'll have to focus on external education in line with your internal evolution. You need to open your clients' eyes to the error of their ways and change your billing approach. At the risk of being self-serving, The Executive's Guide to Consultants is an excellent tool for this purpose.
A firm instituting productivity must have a collegial culture with strong partners at the top. Allocating project revenue is not a surgically precise exercise, and sharp elbows can become common if consultants forget the value of long-term relationships with their colleagues. In most cases internal competitiveness is kept in check by cultural norms and a firm, fair arbiter at the partner level. In addition, typically an estimate of splits is made at the start of a project then finalized once all the fees have been collected.
Similarly, you'll need to keep an eye out for consultants who create "new" intellectual property that has no meaningful benefit over the existing tools, templates, approaches and processes. One way to do this is to allocate the IP portion of the project only to ideas developed prior to the sale, rather than concepts developed during the project.
Finally, you will need to make a few systems and process changes. Consultants will somehow have to be convinced to stop filling out detailed time sheets. That should take about three seconds. A new system should be put in place that tracks revenue splits, linkages between projects (to allocate follow-on revenue) and IP contributors. These new systems are surprisingly simple, even in the largest firms. Focus your attention on productivity rather than utilization, and you will be rewarded with a more successful consulting firm

David A. Fields, author of The Executive's Guide to Consultants (McGraw-Hill, 2012), is dedicated to making consultants successful. Email David at david@davidafields.com.

Utilization is Archaic and Misleading

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