Evaluate PMs in 5 Performance Areas
PMs are the face of the firm and have the most interaction with the firm’s clients. They control the projects from both a financial and production point of view. Finally, PMs typically play a key role in developing new business. If your PMs perform well in the following five areas, your firm is probably on track to be very successful:
- Project Profitability—What you consider when you evaluate each PM in this area can make a big difference: Do you measure the profitability of the portfolio of projects or are projects looked at on a case-by-case basis? Look at each project to understand why certain projects are making a profit and others are losing money.
- Project Revenue Growth—If your PMs are responsible for new client sales, be sure to examine Return on Investment (ROI) for the amount of time and effort they dedicate to new business development. If your PMs primarily focus on production, they should still be generating new work from existing clients. This work doesn’t necessarily have to be projects they would be responsible for managing.
- Repeat Business—Typically, at least 80 percent of a professional services business comes from repeat clients. Also, it is far less expensive to generate new work from existing clients than it is to win work from a new one. If your PMs are continually getting new work from existing clients, then they have earned the trust of those clients. After all, most clients hire the people they want to work with and not the firm.
- Utilization—A PM is not only responsible for keeping his/herself busy, they also need to make sure that the staff they are responsible for have work to do as well. Even if the staff do not directly report to a PM, they need to do everything they can to make sure the staff has billable work to do.
- Staff Development—Upper management needs to support the necessary investments in staff development. The staff themselves need to make their own investments in their development and recognize it’s not 100 percent the firm’s responsibility. PMs need to look for development opportunities on projects as well. Staff that don’t see growth opportunities will often leave for other jobs that provide career development.