Bad Visual Effects Business Practices
[ This posts covers specific bad business practices of visual effects companies.
If you're interested in the problems of the visual effects industry check these posts:
It seems a few times a
year we hear of another visual effects company going out of business or on the
brink. Every few weeks there is news of massive overtime on a visual effects
project and almost just as likely the news that those putting in the time were
not paid for the overtime. The visual effects business has gotten more and more
out of balance in the last decade. While the amount of visual effects has
skyrocketed and the profit from these types of films has likewise skyrocketed
(49 out of 50 top box office films were reliant on the use of visual effects),
the life of many visual effects artists has become more difficult. And trying
to keep a visual effects company running has become more difficult as well.
Our creative skills and
technology have freed us to create extraordinary images but the business
aspects are dragging us down.
Some of the key problems
include compressed post-production schedules that require overtime from the
start just to complete the work on time, never ending changes from clients
until the film is in theaters, film incentives shifting where and why work is
awarded and increased competition from more visual effects companies.
Many of these issues are
out of the direct hands of the vfx companies. However some are simply problems
the companies create themselves, in some cases related to the above problems
and in other cases simply due to management decisions.
I've worked directly for
studios, I've worked for visual effects companies and I've started and ran my
own visual effects company for a few years. None of these are easy.
Business aspects
Visual effects is not
widget making. Nor is it a consistent service based on a vast number of
potential clients. In these types of businesses there are fluctuations but
they're normally slower changes. Visual effects is project based where a single
project could occupy the entire company or a significant portion of it. The
work comes in sporadically and results in a feast or famine situation for the
visual effects companies and their artists.
For feature film work
these projects have an end date so there's a big burst of work and then the
need to scramble to get another project to keep people busy. Television can be
a bit more forgiving since it may continue on for a longer period of time but
even here there is uneven work. Commercials tend to be shorter and smaller
projects so an individual project may not have the same weight on a company as
a feature might.
A company that makes
their own product such as an animation studio has more potential flexibility to
adjust the workload and try to maintain consistency of work.
Visual effects companies
It's not easy to start
and run any business. Visual effects is likely one of the more difficult
because of the project based nature and all the other external factors
involved. While it's easy for workers to look at management and think running a
company would be easy, it is not. Those who try usually find it much more
difficult than anticipated. [ I'll cover new companies in a future post].
Visual effects management
Management breaks down
to those who are independent of specific projects (general manager, department
heads, etc) and those who are assigned a specific project (visual effects
supervisor, visual effects producer, etc) These may overlap depending on the
company.
I'll cover some of the
bad visual effects business practices I've seen (and some I've done myself).
It's certainly easy to make mistakes given the pressures to make the business
work. And many of these aren't specific to visual effects only but are common
across a wide range of businesses.
Management’s purpose
Management’s first step
is to get the projects in and to gather a great crew to do the work. Management’s
task is to guide the crew and provide the necessary support and tools to do the
project with as much quality as efficiently as possible. Yet some in management
don’t get this and in fact seem to try to impede the work of the crew.
Sometimes it seems that Scott
Adams must have been a visual effects artist. He creates the Dilbert cartoon
series and frequently his cartoons seem to be taken from the diary of a visual
effects artist.
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The Work
Most work in visual
effects is done on a fixed bid with change orders in theory to allow adjustment
to changes. The problem is that even with previs animation the work is seldom
spected out in detail and what is requested may differ significantly from what
was bid. Creative changes make it a challenge to do the work in the time and
budget originally calculated.
Visual effects companies tend to be reluctant to turn in change orders
even when they are justified because of the small number of potential clients.
Lack of Honest Communication
Management at the
company need to be able communicate clearly with their client and with their
artists. This includes listening. If there’s confusion about what a client
wants or what the artists need to do then there will be waste. If management
refuses to hear what their artists have to say, then that will result in waste
and loss of time as well. The company may have restrictions but they need to
avoid purposely misleading the client and the artists. Lying about things like
payroll is a good way to lose all employees.
Bidding Problems
Bidding is
critical. If a bid is too high
then the company may not be awarded the project. If the bid is too low then the
company may lose -a significant amount of money.
Inaccurate bids
Sometimes there is
little time to do a bid and rough numbers are simply assigned per shot.
Sometimes a producer or supervisor may be using figures from a few years
earlier. Not including some of the key people also can result in inaccurate
bids. It's best to make sure to get accurate bids.
Not getting all the
information
The more information the
more accurate the bid will be. Lacking specifics of shot length, handle length,
boards, previs, schedule, etc. will produce an inaccurate bid.
Incorrect bidding
It's a mistake to
calculate in asset costs into a sequence of shots. If a CG model will cost
$100,000 to build and will be used in 100 shots it's tempting to simply spread
this out over the 100 shots. But if the shots are canceled after the model is
built or the number of shots ends up at 10, you've lost money.
Accidently losing a
section of the bid is also a problem so be sure to double check.
Not being specific in
the bid
Be clear about what the
bid includes and what it doesn't include. Which previs, storyboards, script and
breakdown is being used should be clearly spelled out to avoid confusion. Any assumptions need to be documented. The
valid period of the bid should be clearly spelled out as well.
Optimistic bids
We tend to be optimistic
and bid based on what we would like the work to take, not what it really takes.
Bids need to be based on the average worker, not the leads or the best worker.
Bids should be compared to an average of similar work from the last year. If
your bid for a green screen is 1/2 of what your average green screen took the
previous year then you need to face the reality of the bid. Same with roto,
animation, etc. Shots will vary with the projects but does the specific project
support a much different bid per task? The pressure of getting the project
encourages everyone to try to get a low bid but it's better to be realistic and honest in bidding.
Changing numbers after
the bid
In some cases management
will 'adjust' the bids before presenting to the client. There may be overhead
or markup that wasn't calculated in the initial bid. The problem is when
someone starts making guesses and modifies the actual bids. If the animation
dept. has bid something for x weeks and management changes it to 1/2 x, who’s
responsible for it? How accurate is the bid? If management thinks the bid is
too high they should be involved with the bidding or re-evaluate specific
sequences with the affected people. Padding the bid is also a problem if the people
bidding initially already put in a little flexibility.
Optimistic schedules
Most of the bid is based
on the amount of man time involved with each shot. But there will be a linear
time to schedule as well and that's easy to be too optimistic on just like the
bids themselves. For a given number of crew members, how long will the work
actually take from start to finish, knowing the changes and delays that
typically happen? What about delivery schedules from the client and time to
review? Is there enough time to do it? Will additional artists need to be
hired? Will this require insane overtime? If the schedule is too optimistic
there will be enormous costs and pressure toward the end of the project.
Underbidding
I'm not talking about
underbidding a competitor here. I'm talking about producing and presenting a
bid that is lower than the calculated out of pocket estimates. Purposely
underbidding a project to get the project knowing full well the company will be
losing money. This is called buying a project and the company is in fact
helping to fund the project without any investment return possible. This is a
losing proposition and causes a race to the bottom. This is one of the biggest
problems the visual effects industry faces. This happens to both small companies
trying for small projects and the largest companies even in areas with subsidies. I know the difficulty of trying to keep cash coming in for a
company and the thinking is that it can be staved off by just getting this one
project in with enough cash flow to help cover some of the expenses.
The problem is anyone
can under bid at anytime. If your
company lost money purposely on the last project, how do you make up for it?
Visual effects is not a commodity and we don't make or sell widgets. Wal-Mart
can ask their vendors to sell to them at lower prices because they're buying
thousands or millions. If the vendor is making some profit on each product and
they have a guaranteed order for a large quantity then it makes sense. A visual
effects company cannot make it up in volume.
If your company under
bids on this project then there's a good chance another company will underbid
you on the next project. After all, another company lost the last project
because of your bidding process and now they're in desperate straits. Even if
your company isn't underbid your clients now want to get similar low bids on
future projects. Without a new project with sizable enough profit to cover
itself and the project that lost money, you're hosed.
Companies doing this tend
to slip further and further into the red and are simply delaying their
collapse. With deep pockets to keep the company afloat that may work for a time
but someday someone is going to wonder why they continue to lose money. That’s
when the money loss will stop.
There may be times when
your company will simply have to trim back according to the amount of work
available. We all hate to see people laid off but if this just drives a company
out of business and others are losing work, that’s a problem. The thought is
to keep the whole company afloat and the desire to retain as many workers as
possible but by underbidding you’re pulling the jobs away from other workers at
another company, a company that may in fact be trying to make a professional
business out of it. You may well doom not only your own company in the long
term but other companies and workers in the same business.
Keep in mind it doesn't
do the company, the workers or the client any good if the client goes out of
business, especially while working on a project. And that's why some clients
are reluctant to award to the lowest bidder. It's like other things in life, if
the price looks too good to be true, it probably is.
The other problem with
underbidding is management is always optimistic the loses can be made up during
production. (When has that ever happened?) They are likely to place more
pressure on the workers to work faster and to work unpaid overtime and place
the blame on the workers rather than management's decision to underbid.
Management also tends to try to push the client to buy off on shots before they
are done or at a lower quality level. This causes the client to question the
quality and to become less trustful of the company.
What starts as a way to
keep much of the crew and to lose less money in the short term becomes a
long-term loss for both the company and the industry. This devalues the work of
the company and their artists and simply forces other companies to trim margins
to the edge of bankruptcy. This is unhealthy for an industry.
Separate post on Underbidding VFX
Separate post on Underbidding VFX
Bad contracts
Contracts take a long
time to work out. In some cases the contracts may not be completed until the
finish of the production. Most lawyers are paid by the hour and love to drag it
out. The contract will be boiler plated and client skewed heavily in their
favor with a full team of lawyers. But the company needs some type of legal
document (simplified contract, letter of intent, etc) BEFORE it spends a lot of
money on hiring people and expanding. There have been many projects that
disappeared before they started shooting or partway into production. The
company needs to have a contract such that the visual effects company is not
holding the bag for its expenses if the project does not complete as planned.
The company needs some type of minimum guarantee or penalties should the
project stop. The company should have a non-refundable hold fee of some type.
Any company left in the
lurch from a client pulling out is in a precarious position. They likely have a
crew and other expenses and will likely have to let the crew go or reduce it's
overhead as much has possible while they scramble to fill the vacated time.
What about the people who have moved to work at the company with the
understanding of a long project? How will they be compensated?
Companies also need to
either make some of the parameters of a contract adjust accordingly or be ready
to renegotiate should things change radically. Example: If a company is doing
100 shots and has x credits, what happens when the number of shots quadruple?
Is there an increase to number of credits? Do other parameters change?
Companies need to get a
real entertainment lawyer to check the contract. Can the project be mentioned
during the production? Can it be mentioned after the production? When can
material to be shown to new prospective clients? What are the restrictions? Who
owns any materials or techniques developed during the project? What about
elements from an element shoot? Who owns that material? What are the deadlines
and responsibilities if the client doesn't deliver? What are the
responsibilities if the company doesn't deliver or meet it's deadlines? What
are the specs of delivery from the client and to the client? What type of
credits and how many will be provided? All of these details have to be hammered
out ahead of time.
Bad payment schedules
With a contract goes a
payment schedule. Management needs to determine their expenditures, including
their up front costs, and layout the payment schedule. There may have to be a
large upfront to cover the cost of new development or ramp up time. Even if the
bids are correct, if the client is running late with payments then the company
may not be able to make payroll or cover other expenses. What happens if the
work is based on milestones of completed work but the client is late to deliver
the material by a month? Companies need to be clear on the real payment. Large
companies tend to like to pay things on 30-120 days schedules. Even with an
interest payment can your company afford to cover all costs for 3-4 months?
Unlikely. So make sure the payments are always covering expected costs during
the project, not months later.
Not meeting payroll
Not meeting a payroll or not paying your contractors means someone in management likely messed up big time. Likely they either didn't work out the correct payment schedule or didn't correctly budget and monitor expenses. Don't be surprised if you lose your crew.
Not having business
sense
Many people in visual
effects management do not come from business backgrounds nor do most have any
type of business education. Some say that this is the source of all the
problems. But many people with Masters in business lack business common sense
and more importantly they don't understand a thing about visual effects. Most
business programs and board of directors think of management as interchangeable
regardless of the company. That's why you end up with a CEO of a chemical
company overseeing a farm equipment company and someone with no food business
experience running Hostess. These end up as disasters. These types of people
focus completely on the numbers without understanding what they really mean.
Without understanding the product, service, industry, employees and clients,
management cannot hope to understand what to do.
Many studio executives
and producers don’t have official business training but they typically have
basic business common sense or have someone on their team who does. Everyone in
management should understand the concepts of incoming revenue, expenses, labor
costs, capital expenses, overhead, profits, targets, etc. And no, overhead is not the same as
profits. Some management in visual effects companies lack this understanding.
Not knowing costs
Surprisingly some
companies don’t know their actual costs. What’s the cost of overhead, what’s
the cost of any employee benefits, what are the additional expenses for
equipment and what are the true labor costs? Without this most basic knowledge
the company will not survive very long.
Not valuing employees
A visual effects company
has hardware and software but its single most important asset is the worker. Anybody
can buy the hardware and most of the software to set up a company. It's the
employees that are the real driving force of a company but many in management
forget that. The quality of the artists, their skill and experience when
managed properly will determine the quality and the cost/time required to
complete the custom visual effects. Not placing a value on them is demeaning to
them and the company.
Treating workers poorly
Workers are human
beings. Yes, you’re paying them but if you work them 80+ hours of overtime are
you treating them as people? If you force an employee to move across country or
to another country only to be laid off immediately are you treating them
correctly? It’s easy for
accountants to simply look at them as a cost but management has to understand
they are people. They are people whose life is controlled by the company. A
visual effects artists will be spending more time at work than with their
families. You may have required them to leave their families to work at your company.
They in effect are sacrificing part of their life for the company. If motivated
the artists will be going above and beyond. But does that mean you can kick them
to curb without notice? Remember to do unto others as you would have them do to
you.
Abusing workers
There are many types of
abuse that management may place on their artists. Hopefully their HR department
is on top of it and prevents it from happening no matter the type of abuse
(including screaming at people, antagonizing people, and obviously being crude).
There may be some types of
physical abuse including excessive overtime and not providing enough sleep
between working.
I’ve heard some workers
in India and other places have been actually beaten. We are professional visual
effects artists and all workers should be treated humanely. Any manager who
abuses people should not be working at the company. If higher management doesn’t
deal with it then they are at fault as well.
Poor working conditions
Here in the US most places have reasonable working conditions but that is not the case everywhere. Companies need to provide reasonable working conditions- providing ergonomic setups to avoid carpel tunnel to having drinking water available and avoiding extreme temperatures.
Placing work above health
Some companies are intolerant of people who are sick when there is a deadline to meet. Some companies work people to the point of exhaustion. It’s only a movie.
Not making the best use
of crew
Casting artists for
specific tasks is important to try to get the best out people and get the best
work out. This requires management to know the artists and their capabilities. Some
in management may have small minds that makes it difficult for them to imagine
the person in a higher job that they’re better suited for. Some people end up
trapped in a job because they’re good at it, not because it’s best for them or
the company. Meanwhile those doing worse may be given promotions. Once again
the company may lose their best people.
Not motivating
Management should be
inspiring artists and motivating artists to do great work. When artists are
inspired they will put in 110% and will try to do everything they can to do
better. Yet many in management try to do everything they can to reduce the morale
of the artists. Any ideas or suggestions are instantly killed. Making processes
as difficult to navigate as possible. Requiring enormous paperwork for the
smallest thing. Every ‘win’ for the company is likely another notch in loss of
morale. (Lopsided contract, forced to work unpaid hours, etc). In the end you’ve
reduced people excited by visual effects into worker drones who will be thankful
to finish the day and the project. You’ve created workers eager to switch to
another company.
Poor hiring practices
When a company
consistently hires what they consider ‘poor’ workers, whose fault is that? It’s
likely you have a poor evaluation hiring process. Some like to blame the reason
is that there is no certification process for visual effects workers but that’s
the lazy approach. HR and management have to work together to review job
postings. Does the candidate really need a Masters degree? Does the candidate
actually need any degree at all? What are the actual requirements and are they
clear in the notice? Is management involved in the evaluation of the potential
employee? Have you properly evaluated what skills and abilities the person
needs?
Providing no training
All companies are a bit
different and at least require an orientation. In visual effects there are
usually very specific custom software, databases, naming conventions and
pipeline. Anyone being hired that hasn’t work at the company recently will need
a period of training. If complex proprietary software is critical then there
will have to be sufficient training along with evaluation. Simply tossing
someone in the deep end is a waste of that person and will simply cost more for
the company in the long run.
To increase the skill
set and quality of their employees companies can also provide additional
training on new software or advanced features. Members of the team can also act
as mentors and try to raise the level of others if the company allows for it.
Training can also be
helpful to management or anyone who the company wants to promote.
Too little management
At some companies,
especially small, new companies there may be too little management. The
owner/manager insists on overseeing everything including approving shots, doing
the budgets and seeing potential clients. If someone in management is wearing
too many hats then it’s likely they aren’t giving sufficient attention to several
or all of those areas. Shots may be delayed while the manager is tied up with a
client. Artists may run out of work or simply be idling because they have no
management who can make decisions in a timely manner. Wasting workers time is
one of the biggest expenses there is. Those in management have to learn to
delegate properly.
Too much management
This tends to happen at
larger companies. A large project or two come in and more layers of management
are created. Do these extra layers of management increase the efficiency or do
they simply mean more paperwork and people to go through to get things done?
Frequently this increased overhead means it’s that much more difficult to get
through slim times. This is especially true since many companies tend to hold
onto anyone in management even while trimming back on the people doing the
hands on work.
Micro managing
Hand holding artists and
checking in with them every hour does not make the work go faster. The time
they waste with a status report could have been put to use actually working on
the shot. Increasing the frequency of interrogations as the deadline nears does
nothing but fluster the artist. Hire the right people, be clear in
communication when things need to be done, set milestones and reasonable status
updates.
No structure
Some companies operate
with very little consistent structure. When artists have multiple ‘bosses’ it
becomes confusing whose project is a priority. In some cases artists get
conflicting notes even when working on the same project. Management should make
clear who’s in charge and what the hieratical of the company is.
Management by crisis
Management may ignore
any problems or issues until they turn into a full crisis. At that time
management has few options than to try to immediately put the fire out. They
may take people off one project and throw them at the problem in hopes of
solving it. And as soon as that crisis is over they have another crisis because
the project they stole people from is now having problems. Throwing workers and
overtime at the problem is not an efficient means of working and certainly just
causes stress by everyone at the company.
Management by 3rd
graders
Sometimes it feels like
some companies are being run by 3rd graders. Rather than professionals making logical,
well thought out decisions, management may be making decisions based on
everything but. This person didn’t want to work on that project so they’re not
going to be assigned this other project. Another artist looked at them sideways
so they don’t want to put them on the new project. This artist likes the same
football team so they’re going to be assigned a great position. This person is
a favorite not because they’re good but because they’re friends. Making
management decisions based on petty or unrelated issues is no way to run a
company.
Management by rumors
Someone from management
once heard one worker say something they thought was about another worker at
the company. Or at least they thought his name started with a G. So that worker
won’t be assigned a new project. Or maybe they will hold that person back and
overlook them for a promotion because they heard from someone who over heard
somebody say something to someone else.
Management by randomness
Some companies seem to
be making management decisions based on random ideas with no apparent plan.
This is especially true when the company doesn’t make some of their decision
making transparent. And at times it seems like someone in management is being
blackmailed. It’s the only way to explain some of the decisions.
Management with no
management skills
Not everyone who works
in visual effects is a good potential manager. Before bumping an artist to
management, current management has to determine if the person has the skill set
to be a manager. Can they work well with people and actually manage them? Not
abuse them, but help them? Can they give up their hands on work and spend most
of it working out the business and resource issues?
Management Peter Principle
The Peter Principle is
the term for people who have kept being promoted, especially in management,
until they reach the level that they’re not competent at or may not have the
skills to do it. And frequently those people remain in that level doing
incompetent work because both they and the team that promoted them didn’t want
to admit it. Rather than using a probation or trial basis like some companies
do with new employees, they’re assigned a position with no way to go back down.
No Milestones
Visual effects is a
service business. Time is critical. In the contract should be delivery
milestones from the client. What needs to be delivered when? And within the company there have to be
milestones. When are the shots due? When is the animation for this shot due?
When is the first pass at an R&D project to be done? What are the steps to
create the new pipeline and when will each of those steps be finished, reviewed
and evaluated? All of these should be clearly communicated so people aren’t
guessing or that the time doesn’t pass with without an evaluation.
Having fiefdoms
Departments and groups
in companies may have a fiefdom attitude. When the management of that
particular department thinks much more about themselves and their department
than the company as a whole. They become the gatekeeper to what work is done by
the department not based on the big picture but based on their own priorities.
Rather than shifting some of the work to another department if that makes
sense, they’ll dig their feet in and become even more problematic. Bad
management has caused this problem and lets in linger. Frequently you’ll see
departments attacking each other or withholding information or assets as they
try to be king of their little hill. This infighting simply makes the company
more at risk of going out of business.
Answering yes to
everything
While answering yes
makes for good improv, it’s a terrible method of management. If a client asks
you to cut the bid by a million dollars do not say yes immediately. If a client
wants to change 500 shots, do not say yes instantly. If a client moves the
deadline up a month do not say yes instantly. Small changes happen everyday and
are part of the process. Saying yes to minor expected changes isn’t a problem.
But saying yet to a major change is a problem.
The client’s first thought:
Great!
The client’s second
thought: I knew they overbid. I
knew they had extra capacity.
The client’s third
thought: I’ll have to remember that.
And they do. You’ve now
taught them a bad lesson about the company and provided them will more reason to
ask for things in the future. To top it off you may be wrong and that yes may
have a bigger impact than expected.
Instead ask to review it
with your team overnight (or whatever time frame). You may have forgotten about
that bid change you already did. You may not be aware that another project came
in. It’s best to sit down with the key people involved and do a reality check.
Can these changes be reasonably made given the information you have? What will
be the ripple effect on the time and on the costs? Is there an alternative or
compromise that can be worked out.
Now when you respond to
the client you do know all the facts and have considered the ramifications.
Even if you say yes you can say that you struggled to work it out for them and
want to provide the best service. The client doesn’t view this as an easy win
and will be more confident that you’re taking it seriously rather than
suspecting you were simply trying to pull one over on them.
And sometimes you may
need to say no. If your company does not have the capacity for an extra 500
shots or there isn’t enough time or resources to make all the changes, the
company should discuss with the client. If the company accepts work but is
unable to deliver that’s not good for the company or the client.
Not considering other
business models
With each new project
comes an opportunity to look at an alternate business model (besides fixed bids
with possibly change orders). Is it possible to use another model on this
particular project that might make sense for the client and company? This is
especially true with new technologies and types of projects. Maybe a profit
participation approach? Maybe an added time and materials approach?
Not anticipating
Sometimes changes appear
from the client out of nowhere. But frequently changes can be anticipated but
aren’t. If the company is falling further and further behind schedule don’t be
surprised if the client pulls the work and takes it somewhere else. Don’t be
surprised if the client wants to put the thumbs down and force the company to
work overtime. If the director still isn’t happy with a shot or concept design
then they may bring in others to make sure it gets done. Rather than allowing
the situation to get to that point the company should be monitoring the situation
and anticipating. They should be trying to solve the problem before the client
tries to solve it for them. Management should anticipate and make the changes
when there is time to do it correctly rather than making a mad dash and wasting
a lot of money and overtime.
Not holding client to
contract or change orders
Hopefully you’ve spelled
out a lot of specifics in the contract including milestones, delivery schedules
from the client, file formats, previs, etc. A lot visual effects companies let
major issues and big changes pass right by because they don’t want to rock the
boat. They simply absorb the changes themselves and hope they don’t total up to
too much. One problem is that changes and mistakes will likely continue to be
made that the company has to absorb. The other problem is if it’s brought up
later the client will have no idea what the company is talking about.
At times there may be
reasons not to nickel and dime a client. That’s understandable but it’s best to
at least note it to the client so they are aware of it. This is especially true
if the client has delayed delivery of materials as outlined in the contract. So
if indeed you choose to do a ‘good deed’ they know you have already bent over
backwards for them. If the editorial department turns over a jumble of shots on
a drive with incorrect counts then flag production that you’re letting this one
pass but in the future it will be billed at $x to fix. This will encourage them
to fix the problem on their end and be more careful. If not, then they’ll be
billed accordingly and can’t act innocent. Money and time tend to be the only
language production speaks in terms of 3rd party companies.
If there is a legitimate
change or addition then that should be discussed with production. If the camera
jammed or a major prop failed on set then production knows there’s a legitimate
change order. Do not try to instead bill for another shot or add overtime
unrelated to the problem. That’s a good way of irritating a client who would
have likely concurred on a valid change order.
Trying to sell
unfinished or incorrect shots
Management may try to
sell a shot that doesn’t match what the director asked for or may try to sell a
shot that’s obviously not finished (or to the correct quality level). This
simply irritates the director and causes them to review all shots in even more
detail. And the company will have lost any trust the director had in them to
follow through. The supervisor and other management needs to get in the same
mindset of the director and producer so they will be trusted as a creative
collaborator.
Not documenting workers
time
And no, this isn’t to be
used for punishing workers. Its purpose is to keep accurate records of the
length of time every step takes in doing a shot. This is the data that needs to
be reviewed during the project to see how it’s comparing to amount of time for
each task that was originally budgeted. By tracking actual work hours it
becomes much easier to accurately bid future projects.
Not monitoring the
schedule and budget
It’s necessary to check
the schedule and the amount of money spent throughout the show to make sure things
don’t go off the rails. It’s important to use numbers instead of optimistically
thinking it’s simply a ramp up issue. Rather than a producer flagging the error
at the end of the show or even after the bid has gone over, it’s much better to
flag when it’s getting close. This provides an opportunity to make adjustments
to the approach.
Not having post mortems
At the end of every
project there should be a post mortem to review what worked and what didn’t
work. There should be monitoring during the project but post mortems can give
you more perspective and a larger vision of what happened. It also allows you
to hopefully roll in key changes before the next project gets too far. Post
mortems should include the full range of crew members who should be allowed to
speak freely about the good and the bad of the production. Everything is a
learning experience.
Not knowing legal issues
and requirements
Management should be
aware of various government rules regarding labor regulations. The HR
department especially should be aware of the guidelines but obviously quite a
few do not. Certainly California and the US federal government have specific
guidelines regarding interns, contractors, overtime pay, breaks, colluding,
etc. Around there world there are different requirements but these should be
adhered to.
In the US a company can
be fined and in some cases may have to pay back pay. The IRS doesn’t take
kindly to companies that try to cheat on taxes. Think about what would happen
if your company were found to be guilty of not paying people their correct
hours or not properly classifying people paying 5 years of back pay for the
entire company is not cheap.
This problem includes
large companies as well. ILM and Pixar were found to be colluding and
restricting hiring and salaries of animators.
Here's some of what employees know
Misclassification
Independent Contractor (Self-Employed) or Employee?
Employers beware: More independent contractor misclassification audits are expected
U.S. Cracks Down on ‘Contractors’ as a Tax Dodge
Misclassification
Independent Contractor (Self-Employed) or Employee?
Employers beware: More independent contractor misclassification audits are expected
U.S. Cracks Down on ‘Contractors’ as a Tax Dodge
Fake time cards
Some companies,
including some large ones, provide their employees with filled out time cards,
regardless of the number of hours put in. This is illegal at least here in the
US. See note about legal issues. In addition to breaking the law you’ve now
squandered some of your most important information. Which is how many hours of
each task have been done on a shot. How do you know if you’re over budget or
under budget? How do you know how accurate bids are? This applies also if you
don’t track overtime and the related costs of overtime. A 40 or 50 hour week
time card is useless if the person put in 80 hours. You’re now basing future
bids on completely false information and still wondering why you’re not making
money.
Not keeping a low
overhead
The more people on
staff, the more management, the larger the support staff and the more building
and capital investments a company has, the more overhead the company has.
Overhead will burn through money even when the company isn’t working on a
project. Any profits able to be squeezed out during a project will be gone
quickly if there’s a large overhead. Management needs to think twice before
increasing permanent overhead.
Spending money that the
company doesn’t have
Counting your chicks
before they hatch is a common phrase. Some companies spend all the target
profits before the show even starts. The assumption being that the project will
go through as planned and it will produce the profits as planned. Wrong. Only
spend the money you actually have available.
Not recalculating target
profits
The original bid has a
certain internal markup for profits. The problem comes when that number is not
adjusted during the production. If the company decides to eat the overages on
change orders or pass on savings to the client in reduced markup for additional
work, then the expected estimated profits need to be adjusted at that time.
Some companies are surprised at the end of the production when they don’t make
their target profit even though it was obviously changing during production.
Meeting crazy
Some companies love
meetings. Many managers spend their days in long drawn out meetings. How many
hours are wasted in the meetings? Does everyone need to be there? Make meetings
only when it makes sense and keep them short and to the point. There are only
so many hours in a day so make them productive.
Not listening to the
artists
Since artists are the
most important asset a company has it would seem reasonable to listen to them
regarding ways to make the process more efficient. Especially since they’re
experienced and well versed in the technical details. Yet sadly many companies
ignore these resources and instead make decisions based on sales brochures,
demos or by faulty spreadsheets.
Pleading poverty
It’s hard for a company
to plead poverty and to request people to work unpaid overtime and donate even
more hours for the company when management is driving brand new expensive
vehicles from their brand new expensive home.
Expensive digs
All the projects I’ve worked
on have been done in warehouses or industrial buildings yet some companies spend
a lot on expensive buildings and furnishings in the hope of looking impressive.
Some commercial clients like to have lavish client rooms but most clients look
at an expensive building as something they’re paying for above and beyond what
the work costs. And for the actual company it’s another huge expense of
overhead.
Not working as hard as
artists
When management is
putting in 8 hours or less of work and taking extended lunch hours while the
rest of the crew is putting in 14+ hours, that’s not good. When management
takes a 3-day weekend but insists the crew work all weekend and then berates
them on Monday morning, that’s not good.
When the crew has spent
months putting in incredible overtime and producing great work they’d like to
get a pat on the back. But frequently they get notice that they will be out of
work for 6 months or more because sales and management have been unable to get
a project. Maybe if sales and management had put in at least part of the work
that the crew did, they could have found a solution.
Not understanding
overtime
Management is likely to
look at overtime as a given. As something that is normal and should be
expected. They take on projects where the entire crew is working overtime from
the start. And if this aren’t going fast enough or the client has added a
number of changes or shots, then the easiest thing from management’s
perspective is to increase the number of hours worked. Management and those
typically looking at just the numbers think that 12 hours is producing 50% more
than 8 hours work. They’re wrong. As the number of hours go up the productivity
of workers is going down. The number of mistakes and errors starts rising
dramatically the more overtime is put in. Did it really save you any time if
you have to do the task twice?
Overtime is also a huge
health issue as studies have now shown. Asking people to sacrificing their
health for mistakes management has made is a problem. Assuming artists will be
able to have the dexterity, creativity and complex thinking after 12 hours
staring at a monitor is wrong.
Tied in with overtime is
the turnaround time. That’s the time after a worker finishes when they have to
report back to work. People have died from long hours and lack of sleep.
Providing a cot and allowing 3 hours of turnaround time is not a solution.
There are legal
requirements here in California and the US in regard to overtime pay. This
increase in hourly wages is to truly compensate the worker and to discourage
the company from taking the lazy way out. Misclassifying people as exempt, not
reporting the hours, not paying the hours worked and other misdeeds are in fact
illegal. The company could face
stiff fines and potential back pay issues if this is not correct.
10 Tricks Employers Use To Cheat Workers Out Of Overtime
10 Tricks Employers Use To Cheat Workers Out Of Overtime
Some companies provide a
standard day off or standard day of pay. Doing this provides no incentive for
the company to avoid working people overtime.
The bottom line is
overtime should be avoided. Obviously if it costs the company more money it
doesn’t make any sense. It also doesn’t make sense to your clients if you pass
it on to them. Maybe the clients and the company should spend more time trying
to solve the problems correctly such as anticipating the added work and hiring
accordingly. You’ll produce better work more efficiently than working your core
artists into the ground.
Business management time
and money wasters
Many companies try to
recreate their ‘mission statement’ every year. Many bring in outside ‘experts’
to spend days, weeks, months interviewing workers and managers. Groups of
artists are brought in for lengthy meetings week after week to try to come up
with the solutions and improvements.
Now some thought should
be given to making improvements but it’s been my experience that these official
processes are simply a waste of time and money.
The results fall into
one of the following:
1 1. Management
doesn’t care for the worker or expert suggestions and simply ignore them.
2. The report
of the ideal process is already what the company does.
3. Everyone
thinks it’s great but there are many flaws in the plan since the experts didn’t
fully understand the process and people end up back into their old habits.
False economy
Many in management try
to save pennies while overlooking potential dollars of savings. In some case
they cause the loss of major amounts of money. They won’t hire a pipeline
engineer because it costs money yet the time it takes everyone on the crew to
manually move files, rename them, enter the databases, etc. would easily cover
the cost of the engineer and the company could actually be more productive and
save money. This is what’s known as a no brainer but management just tends to
look at simple numbers and make decisions without considering the implications.
Buying graphic cards that are 5 years old because they’re cheaper, going with a
slower, inexpensive server because it’s cheaper, hiring inexperienced people
because they’re cheaper, etc. All of these short sighted approaches cost the
company far more than the saving would have been.
Not fully committing
Sometimes companies do
things half way and wonder why it doesn’t work. There was a time when most
software used in visual effects had to be custom written. These days the need
for full custom apps is less since many applications already exist and many are
able to be customized. Certainly the software teams at companies would love to
create an elaborate project but software projects, like film projects,
typically take longer and cost more than planned. In any case once management
decides to go with custom software (apps, pipeline, etc) they need to fully
commit. There’s no point to creating custom software if it won’t be maintained
and updated. Yet this is what happens to many custom software projects. They
break as new OS’s or applications are released. A bug is found. The off the
shelf apps surpasses them in a year or two. The company has already sunk in a
lot of money so they refuse to switch to another package yet they aren’t
willing to have someone add in features that would save everyone on the crew an
hour a day.
And if the company commits
to custom software tools then they have to commit to the additional training
required when they bring on new people. Without the training, the tools are
worthless. And training means not only teaching but also documenting the tools.
Custom software also means that the company has to bring in people earlier so
they can be trained and up to speed. This can be a problem when schedules get
crushed but has to be taken into account.
Blaming employees
It’s rather common for
management to blame the workers for missed deadlines or other problems. It
would be better for management to consider what they could do themselves to
improve the situation and what they can do in the future to avoid the problems.
Charging employees to
work
Not many places do this
but some in India and I suspect other locations do. These companies hire
inexperienced people then charge to teach them how to do the job they’re
being hired to do! Their pay or deposit is withheld until the conditions of
this serfdom is completed.
Lopsided contracts
Many companies have
contracts where the worker commits to 3 years but the company only commits to 1
year. Some pay for moving costs but then take it out of the pay of the worker
they insisted move to their location. There are plenty of atrocious contracts
that companies manipulate for their sole benefit and in some cases the management
acts as sociopath.
Over expanding
There’s a lot of pressure
to expand into other areas. A company that specializes in one thing may try to
expand to try to cover everything. There’s also pressure to setup satellite locations
where there are subsides or where the workers wages are low. All these steps
require more money, time and commitment. The complexity of the company
management has now leaped by a magnitude and communication becomes even more
problematic. The company now has additional overhead and expenses. If the
company tries to over expand, especially if it’s done rapidly, then they could
be at considerable risk.
Subcontracting
Subcontracting is not
necessarily bad but if it’s forbidden in a contract then you are in fact
breaking the contract. The client may choose to look the other way but what
other infringements may be happening from either side? And what if they choose
that to be a reason to cancel the contract? How much control do you have over
the subcontractor and what happens if they can’t deliver? If you are being
subcontracted will you in fact be getting credits? Will you be able to
advertise it or show it on your reel? Are you giving up on your company brand?
Rewarding the wrong
people
Management has a
tendency to reward the wrong people. The squeaky wheel gets the grease as they
say. The most vocal worker and the one that talks to management the most may be
the least productive. Yet it’s not unusual for management to be taken in by
this and provide wage increases, promotions and other accolades on these types
of people. Meanwhile the person working away in the corner may be the most
productive person and yet management fails to reward them. Some of it because
if it’s not asked for, management is not eager to acknowledge it. They can save
the money for themselves. And in other cases management doesn’t really know
their own crew well enough to know who’s productive and who is not. The company
may well find themselves losing all their best people simply because they
refused to acknowledge or understand who their best people were.
Not considering a Trade
Association
Visual effects companies
should certainly consider a trade association. There are quite a number of
companies experiencing the same issues and the companies have similar goals. By
uniting with other companies they could well improve their situation if the
association is set up properly. It’s certainly worth taking a meeting and hearing
proposals.
Not considering a union
A union does offer benefits
for the companies. Providing your workers with better health care for less is
one of many reasons workers would want to work at your union company. Having
professionals with a clear agreement can also be an advantage.
Squandering their brand
It takes time for a
company to build a brand that represents quality. To build a brand that artists
respect and want to work for. That brand is what helps them get projects in
from clients and helps to draw the best artists. Yet some companies are more
than happy to squander the brand by producing low quality work or treating
their workers poorly. Once that happens the brand can disappear very quickly. In this age of the internet and social media you better expect that any dirty laundry will be
Not considering both
short and long term
A company has to
consider what they need to do in the short term but in doing so they frequently
ignore the long term. And in many cases they may be sabotaging their long term
with the decisions they are making today.
Not reviewing artists
It’s worth reviewing
artists at the end of each major project. It’s worth reviewing staff artists
once a year. If done well a review will help both the artist and the company. The
company will have a better idea who to rehire and when. An artist will
hopefully get constructive criticism. If the review is done poorly (focusing on
one bad incident, overlooking all the accomplishments, etc) then the artists
will know what an idiot their manager is. Management should be providing
feedback during the project so the worker can improve rather than springing on
some flaw that continued throughout the show without a mention. And if
management has made a decision not to promote the artists they should be honest
with the reasons.
Not considering the
impact of incentives
Companies should be
considering the impact of any incentives. If they aren’t located in an area
with incentives how do they compete with the incentives? Do they need to do things
even more efficiently or do they need to consider setting up a satellite
company with all it’s issues? If a company does exist in an area with
incentives, what’s the plan for when the incentive ends or when another place
offers better incentives? That will in fact happen so you’d better plan for it
now.
No savings or buffer
When any company starts
up the basic guideline is to have at least enough money to cover running 6
months without income. Because it takes time to get going and to get clients
and customers the company has to have deep enough pockets to cover getting
going. Unfortunately since visual effects is project-by-project service work,
the company always has to have a savings surplus to cover the slow times. If a
company is living paycheck to paycheck without any tolerance for contingencies then
they should expect to be out of business soon. Thin margins, under bidding and
no savings are a recipe for disaster.
Not reviewing themselves
A company needs to evaluate
how they are doing and what they can do to improve. If a company continues to
lose money year after year or is constantly on the edge of filing for
bankruptcy, maybe they should simply consider closing their doors. Rather than
whittling down paid hours for workers, benefits for workers and causing other
companies to be pulled down by your race to the bottom, it may be better for
management, crews and the industry to close your doors. That’s a tough one to
swallow but if there’s not enough work to support your company, at a certain
point it’s better to face that.
-------
Added updates:
Added updates:
Too many layers of approvals
If a task requires approval by 5 different layers of managers, that's a problem. Each manager will have a different idea of the results required and will likely produce 5 different and conflicting notes or corrections. This just slows down the process and wastes time. Managers should be able to delegate and there should a limited number of layers for approval. Communication should be clear what the desired results are and artists need to be on the same basic page of what the client is interested in seeing.
Company not backing their employees
If the company proposes a supervisor or designer to a client they should be willing to back that person up to the client. If the company instantly withdraws the supervisor or replaces them at the slightest mention from the client then they have made a mistake. The faith in the client is shaken and they wonder if the company is trying to push the 'B team' on their project. After all if the company doesn't have faith in their proposed person, why should the client? And of course the person who was proposed now feels abandoned and let down by the company, even though they may be the perfect fit for the project. The company needs to make a proper evaluation ahead of time and back up their proposed person. There have been more than a few supervisors who left such a company and later achieved great success elsewhere simply because the company was too timid and small minded to see the potential.
Perfecting shots before submitting them
Some managers hold onto shots until they consider them to be perfect. Until everything is done, tweaked and presented as a final. The problem is the client needs to see works in progress in order to make creative decisions. More than a few sequences have been changed or dropped once they had been cut in. All the extra time spent polishing was wasted and now there is too little time to do the changes correctly. Management will have to know the level of completion the director is able to review and help guide them on what needs to be reviewed. (animation timing, composition, look, etc)
Fixation on perfection overrides schedule
In the beginning of any show there will be a limited number of models and shots to review since most are in progress or yet to be started. With little to look at directors and managers will loop these few things over and over again, tweaking the details endlessly. This results in wasting a lot of artists time, too little time toward the end of the production and uneven quality in the shots. It's the last few shots that are rushed through that will stand out and that the audience will remember. All shots need to be reviewed in context and considered usable when it works in that context.
In the beginning of any show there will be a limited number of models and shots to review since most are in progress or yet to be started. With little to look at directors and managers will loop these few things over and over again, tweaking the details endlessly. This results in wasting a lot of artists time, too little time toward the end of the production and uneven quality in the shots. It's the last few shots that are rushed through that will stand out and that the audience will remember. All shots need to be reviewed in context and considered usable when it works in that context.
[Feel free to add additional Bad Visual Effects Business Practices in the comments below. If you work at a company doing many of these, congratulations, you just won at Bingo. The bad news is you're still working there.]
Update: For those interested in what a union can do: VFXUnion
Other posts worth checking out if you liked this:
VFX Service - The Big Picture
Pass me a nail
Using the nail
VES Bill of Rights - Now What?
Visual Effects Union, Take 2
and the latest
Oh, the mess we're in!
Marty Shindler has some advice for companies (Marty worked at ILM and other VFX companies financial departments)
Oh, the mess we're in!
Marty Shindler has some advice for companies (Marty worked at ILM and other VFX companies financial departments)
