Bus Factor: What Is It, How To Calculate It & Why Agencies Should Use It

Who’s your biggest, brightest work star? You know who we’re talking about. It’s that one person who can take care of anything and everything. You love them, your clients love them, and chances are, future employers will love them, too.

Yep, these bright stars are your greatest, walking business risks. They are your danger zone bus factors. People who, if they were to leave, would cause your entire business or project to fall apart.

The problem is, most businesses don’t see their star people as risk factors. At least not until it’s too late. But there is a way around this dilemma. It’s called the bus factor analogy. We explain what this method is, and how it can help you establish a more stable agency operation that doesn’t bet all your client work on one or two individuals.

What Is The Bus Factor?

Bus factor is a risk measurement technique used to work out how stable or failure-prone your project or campaign is based on the spread of knowledge and expertise at your organization. It’s called the bus factor (sometimes truck factor), because it invites you to imagine how many people could get hit by a bus (figuratively speaking), before your entire project or operation falls apart.

While the bus factor method is used mostly by software developers, it’s a useful little trick that can be applied to any industry or organization. If you have a project or initiative that depends on several or dozens of people or experts to deliver an end goal, the bus factor can help you identify how many of those people are key or vital to the project’s success.

Best & Worst Bus Factors

What you want to aim for is a high bus factor. The higher your bus factor, the more resilient and risk-prone your project and operation will be.

• Best bus factors – High numbers which indicate there are several people who can cover each other and switch between tasks without causing chaos or project delays.
• Worst bus factors – Low numbers, the worst of which is one. They indicate strict or limited knowledge and expertise boundaries where nobody, or very few people, can jump in and cover someone else’s work in case they go missing in action.

For example, say you have 12 team members working on a project for a key client. If you analyze how many of those people are indispensable because they hold all or most of the knowledge and skills to get the job done, and your answer is one, it means your low bus factor is putting your project at high risk. However, if your answer is three, your risk factor is much lower.

Think about it: if that one vital person is “hit by a bus” which in reality means they fall ill, are poached by another agency, or get moved to another department, your project is in jeopardy. But if one person out of three gets “hit by a bus”, you’ve got the other two indispensable people still on board. They’ll manage to push the project through to realization.

So, what’s an ideal bus factor? Well, it depends on your project or team size. The larger your team, the higher your bus factor should be. But even in small teams, the idea is to always aim for as high a number as possible.

Why Your Bus Factor Matters

Your bus factor is important because it reveals how stable your team structure and internal processes are in the long-term and in unforeseen circumstances. It tells you two things:

1. How dependent you are on key individuals, and it uncovers who they are
2. Where holes exist within your team structure, business approach, and processes

If you work closely with your team (and most agencies do), as the owner or leader, you could probably pinpoint who your key individuals are without any data. And while it would be ideal if every employee put in the same amount of effort and delivered the same proportion of output, this is far from the truth.

According to Forbes, data suggests that the top 1% of employees produce 10% of total output, and the top 5% are responsible for 26% of the deliverables.

By applying the bus factor, you can work out who these top performers are and how many you have.

But you’ll also uncover:

• Knowledge accessibility – This is all about the spread of knowledge at your organization. Is it distributed and accessible across your team, or is it centralized and concentrated within a few people or places? When you adopt a knowledge sharing approach and make information available to more team members, it lowers the impact of risks that can occur if one or more members take off.
• Business risk potential – While it’s never a good idea to have too many people leading, it is a good idea to have several people who hold a broad skill set. This minimizes business risks across the board because you always have a talent pool you can tap into to fill gaps or cover members who go on leave or move on.
• Collaboration & growth – High bus factors indicate your organization supports collaboration and growth. Most people learn on the job, and the way they do that is by being given the opportunity to build and hone new skills across different departments. If you want to build a service-based business with a high bus factor, you’ll make every effort to help your teams develop and grow in different areas.

The other reason your bus factor is important is because of the flow-on effect it can have on your client relationships. When your business is risk-prone, as is the case with low bus factors, you also risk not being able to deliver quality work to clients on time.

Now that we’ve covered the basics of the bus factor, it’s time to help you calculate yours.

Once you know what it is, you can look at changes you need to make that will ensure you always have a plan B to fall back on, so your clients and business never suffer.

How To Calculate Bus Factor For Agencies & Consultancies

Because the standard developers’ formula for calculating the bus factor can’t be applied practically to an agency or consultancy model, we’ve come up with our own 5-step method.

The idea is to analyze your project or account teams individually and evaluate who holds the throne in terms of portfolio knowledge and skillset.

The easiest way to do this is to create a table or use a spreadsheet which you can fill in as you go through each step.

Step 1: List All Projects Or Accounts

The first step is to list all your projects, portfolios, campaigns or accounts. You can list them in order of priority in the first column of your table.

For example, the first three might be your highest-value clients or your largest projects or campaigns. The ones that follow will be listed in order of value or scope.

You can also choose to do this on a client-by-client basis, where you create separate tables for each one, listing all the projects you’re currently working on.

Step 2: Establish Owners and Team Members For Each

Next to each project or account, list the team lead or owner in one column and all the team members in the next one.

As you’re listing the names, try to identify if there is anyone in the team who could comfortably fill the shoes of the lead or owner in case they become unavailable. This will help you get in the mindset of preparing backups.

Step 3: Evaluate The Spread Of Knowledge & Tasks For Each

For the third step, you want to identify where and with whom the knowledge and key skillsets are concentrated and how they are distributed.

So in this column, next to each individual’s name, you can list all the tasks they own and talents or knowledge they have which the team, project or campaign depends on. Here, you might need to work with the project lead to get all the answers.

If we take a marketing agency as an example, you’ll probably have a designer, a content writer, a copywriter, an SEO expert, and a content manager. Depending on your team’s level of expertise, you might find several of these individuals can fill each others’ roles without too much trouble:

• A content writer could easily fill the shoes of a copywriter if need be.
• An SEO expert may also have content management experience so they could realistically do that, too, if necessary.

Step 4: Record Individual Time Dedication

Step four is one of the most important indicators of expertise because it reveals the hours each team member spends on key project tasks, which uncovers where their top proficiencies lie.

Now if you have a time tracking tool like the one ActiveCollab customers use for resource management and workflows, you can quickly pull up a report to see who spent how much time, doing what. If not, you may need to make an informed guesstimate.

Next to each individual’s task or skillset, record the amount of time they spend each week performing these tasks. 

Step 5: Calculate Core Tasks & Identify Bus Factor

Step five is to calculate your core tasks and knowledge spread so you can finally get to identify your bus factor. All you have to do here is add up the total hours spent by each team member on each of the grouped tasks. Next to each group, you also need to record the number of team members you have with this skill.

If we look at the above table, this agency’s bus factor is between 2-3, which isn’t too bad. We know this because the agency has 2-3 people to cover their core tasks which are content writing, design, SEO strategy and copywriting. However, they have a danger zone for paid campaigns, content management and account/relationship management. If any of those team members leave, there is nobody to cover their work.

Step 5: Identify Risk Individuals & Set Contingency Plans

When you identify who your risk factors are and the knowledge base you are missing in case they leave, you need to set up a contingency plan to minimize negative impact, and raise your bus factor.

In our agency example, there are a couple actions the agency owner can take:

1. Offer development opportunities within the team to anyone who would like to expand their skillset into paid campaigns, content management, or account management.
2. Identify another team member in the agency who might be working on another account who can take over.
3. If you have the budget and valid business rationale, you could hire a new team member which has a mix of experience that covers those at risk tasks.

Things You Can Do To Increase Your Bus Factor

No agency has an unlimited resource budget, and hiring is always the last resort. So before you go and look into this option, there are some things you can change within your business to help you increase your bus factor.

Create SOPs

Standard Operating Procedures (SOP) are detailed, step-by-step guides for how to get individual tasks done. You’ll have one for writing a blog, another for uploading content, and many others. The purpose they serve is to teach new employees and help existing ones, stick to one unified process so the end product stays on brand and meets the quality of work clients expect, every time, no matter who does the job.

These days, it’s unlikely you’ll find an agency that doesn’t use SOPs. Most live and breathe by them because they are vital for efficient and consistent content production.

Some tips on creating and making good use of your SOPs are:

• Get the pros to write them – Every SOP should be written by the subject matter expert. This will make sure everyone follows the advice of the most experienced person in the team.
• Make them accessible – All your SOPs should be easy to find and access. You might have a SOPs folder or library on your workflow platform, or in your Google Drive. Wherever it is, make sure it’s easy to find and reference.
• Use them – Make it a habit and standard practice for your teams to use the SOPs regularly. And when a new team member is onboarded, encourage them to consume it wholeheartedly.

Centralize Communication & Documentation

One of the best ways to increase your bus factor is to centralize your communication, and documentation like SOPs, tool login details, client briefs, reports and content pieces. It’s the easiest way to optimize marketing agency processes and avoid stalled projects.

Having a centralized platform or tool like ActiveCollab, where you house all your agency and client management workflows and documents, can remove multiple pain points:

• One tool for everyone – When everything is nicely organized within one tool, which everyone works in, you don’t need to login and out of several systems to finish one piece of work.
• Information sharing – How many times have you seen entire projects stall because the lead has fallen sick or gone on leave, and nobody knows where that file is? This never happens when you have the right tools to set up all your project workflows neatly, upload all the documents, include all collateral links, and list the full log of communication with clients.

Rotate & Cross-Train Team Members

Most people like a challenge. Especially creatives. So why not take advantage of this and use it to cross-train your team members by introducing role rotations? By doing this, you not only help your people develop new skills and tap into new talents they may not even know they have, you also up your bus factor.

You can approach this in two way:

• Assign rotations based on strengths – If you see a team member with great potential in an area that’s not their core function, approach them and offer a temporary, full or partial role switch.
• Let your creatives choose – The other option is to let your team members choose which roles appeal to their interests and areas of development.

Decentralize Responsibilities & Tasks

One of the biggest mistakes agencies make is role centralization and specialization. It’s a huge risk factor for their business, because while they might always have the most talented and experienced person on each task, they restrict innovation and put portfolios in a danger zone because they depend completely on select individuals.

To overcome this problem, you can do a couple of things:

• Restructure work & mix it up – You can take small steps by placing team members in pairs and having them switch up some of their tasks. That way, they’ll familiarize themselves with new pieces of work and expand their skills so they can do more than just their core role.
• Reevaluate your hiring strategy – This one is more of a future, long-term plan fix for increasing your bus factor. The idea is to focus on hiring people with multiple or broad skillsets. When you prioritize expansive skills rather than specific ones, you’ll build a team that can apply themselves to many roles instead of one.

How Agencies & Consultancies Can Benefit From Using The Bus Factor Analogy

Agencies and consultancies can use the bus factor to check and keep on top of their business stability and operational resilience. It’s a bit like an agency health check which tests for inconsistencies that, if left as they are, could evolve into much bigger issues.

While it's not an analogy or calculation you need to do often, it is worth always keeping in the back of your mind. Especially whenever you make key business decisions around new hires or team task assignment and distribution.

If you apply the bus factor and do your best to stay in a safe range (which is any number higher than one), you can make sure your agency is never left high and dry because the majority of the business is dependent on one person.

How ActiveCollab Can Help You Identify & Manage Your Bus Factor

The bus factor is a risk assessment method that helps you work out how many vital team members your business depends on before it fails. The lower your bus factor, and the less vital people you have on board, the greater your risk.

A resource and time management tool like ActiveCollab can help you calculate your bus factor and discover which areas of operations you need to make changes to if you want to increase your bus factor. This will help you minimize or eliminate negative impacts on client portfolios and work deliverables when important team members go on leave, fall ill, or leave the organization.

With ActiveCollab’s time tracking tool, your entire team can log and track the time they spend on various tasks and projects. You can then use the reports feature to capture where each of your people spend most of their time and identify the level of work distribution. When you combine these two elements you can quickly work out where the business risk areas are, which are driving low bus factors.

Agencies and consultancies are fast-paced environments. Working to constant deadlines, on projects that require intense focus and creative dedication, key team members might be at risk of burn out. By having a tool to track your people’s work and efforts, you can prevent stress and exhaustion, as well as manage your business better.

If you want to get your agency team onto a platform that houses all your client workflows, and helps you run the business at its most optimal level, why not give ActiveCollab a go? Sign up to our 14-day free trial, or book a demo to get a guided tour from one of our people.