It's an interesting thought experiment, I have an existential disagreement with hourly tracking but that aside. Most agencies I know run on hourly rates. They are fundamental to all their calculations, all the way down to whether or not a single employee is profitable. But zero insight into whether that employee is necessary, enabling or valuable in other ways.
Many understand it puts you in the race to the bottom, and it maps really poorly to value, but it's the industry standard and I think companies really struggle to imagine alternative ways of organising their deals.
It's an interesting thought experiment, I have an existential disagreement with hourly tracking but that aside. Most agencies I know run on hourly rates. They are fundamental to all their calculations, all the way down to whether or not a single employee is profitable. But zero insight into whether that employee is necessary, enabling or valuable in other ways.
Many understand it puts you in the race to the bottom, and it maps really poorly to value, but it's the industry standard and I think companies really struggle to imagine alternative ways of organising their deals.
"Generative AI isn't making expertise less valuable. It's exposing the flaws in pricing knowledge work by time rather than outcomes."
Interestingly using AI is priced by tokens rather than outcomes.