How to Build a Culture of Data-Driven Estimation (with Marcel Petitpas, Parakeeto).

Galen Low is joined by Marcel Petitpas, CEO at Parakeeto to discuss the qualitative side and how to build a culture that values data-driven estimation.
Interview Highlights
Marcel Petitpas decided to take up the entrepreneurial role to help others produce accurate estimates with minimal resource investment. Parakeeto is his company, which makes sense of historical data and generates estimates for agencies as well as in-house teams. [1:00]
Marcel’s self-improvement bucketlist. [04:03]
I believe that being present is something I struggle with all the time. I have experienced a lot of ebbs and flows in my life.
Marcel Petitpas Marcel was attracted to estimation because of his fascination with the reasons small agencies and service companies had difficulty answering simple questions about their businesses without spending a lot of time in spreadsheets. [5:58]
There are two ways to build a line that is reliable and accurate. The first is to collect enough data. The second is to look at the process. [13:27]
Marcel and his team use the agency profitability flywheel as a framework for estimating. It is the heart of their process for consulting engagements. It guides how they think about the product and how to improve profitability in the agency. [15:02]
The first step in the flywheel is to define your process for estimating, work within your agency, then to also define the structure of those estimates. [15:20]
The second section of the framework focuses on qualitative. [17:43]
Next, you need to meet regularly with your team to discuss what you have learned from your data sets. The fourth step is to create a list of process improvements you can prioritize and then implement. This will make your estimates more accurate. [18:23]
The most important thing, for the agency’s executive leadership or for its employees, is that people spend less time working overtime as the deadline is often rigid.
Marcel Petitpas Project Retros: At the end of a project, you schedule some time for everyone to gather in a room. You talk about what happened and use it to inform the processing backlog. [22:06]
It’s almost like you don’t know what project manager means at each agency.
Marcel Petitpas As a PM you will be pulled in any direction that is least helpful in terms of inputs needed to create a project plan. [27:08]
Too much process can limit creativity and quality, but a little bit here and there can actually make a big difference because it gives you a framework from which to work. [32:33]
From a data perspective, it is important to define a few standard drivers that will influence the complexity of work within your phases and within a project. [34:49]
Before you cannibalize time outside of work hours, you must first cannibalize time within your work hours.
Marcel Petitpas It is possible to have a highly profitable business with 25-30% net margins at year-end on 65% utilization. This should be your annual net goal. You should not have any problem being profitable at this level of utilization. [39:17]
I am sick and tired of people assuming that it is okay to kill their employees and cannibalize their personal lives. It’s not true.
Marcel Petitpas If your agency is purely time and materials and bills for each hour your team works, then utilization is your most important metric. [41:32]
Because it is not the whole story, utilization cannot be the only metric you consider. In fact,