As a professional service organization matures and grows, there always comes a time where understanding the true work/task capacity of departments and teams becomes a big priority. Typically, execs want to know how much they can sell before they need to invest in more resources; i.e., understand details about how the business is going to scale. In more practical terms, without knowing what your org’s capacity is, you’re left guessing about when you really need to make strategic hires to accommodate growth. And, you also run the risk of your sales department selling deals for which you have no capacity to fulfill. So yeah, understanding capacity is kind of a big deal. But before you jump into a capacity study, you’ll need to answer a few questions about where you are in terms of professional maturity.
What Are Your Metrics?
Every business has metrics. The simplest ones usually involve cash and customers; i.e. are we making money and do we have customers? As a business matures, so should the metrics it uses to gauge its performance. This is where capacity metrics are useful. Similar to the first step I mentioned in last week’s article about utilization, when attempting to understand your org’s capacity, it’s critical that you have a capacity method and framework that everyone agrees upon. For example, if you’ve decided that your goal is to hit 75% billable utilization, then tracking against that will give you insight into your capacity. Further, if your goal is 75% and your current average across your team is 80%, then it may be time to start looking for a new resource even though you’ve got capacity to spare. Capacity studies on utilization metrics are typically cut and dry once you agree upon a framework.
For teams with deliverables beyond simply hours billed; e.g., widgets created or LinkedIn articles written, you’ll need to consider additions to your capacity framework/method. Your org’s delivery processes now come into play.
How Repeatable Is Your Process?
In business, “repeatability” is a word used to describe a business process that is literally repeatable. Processes that are repeatable are typically where a business finds its scale points and growth opportunities. Think: making cheeseburgers or preparing taxes. Both are very repeatable.
Coinciding with understanding your utilization metrics, it’s important to gauge the maturity of your repeatable processes. For example, how much of what you do is repeatable? Assuming your organization has some sort of specialization and each resource isn’t geared to be all things to all people, then some amount of repeatability is in play and roles are at least loosely defined. Therefore, you’re likely able to include specific types of capacity into your framework. For example, if you have a junior copywriter on your team, they are likely bound by words per minute and/or articles per hour just like a french fry chef at McDonald’s is bound by the size of his/her fryer and ability to prepare the frozen potatoes. Therefore, provided you have relatively mature processes guiding your delivery, you may be able to track a quantity of widgets produced and gain a more sophisticated understanding of your capacity.
Check People’s Faces
If you’ve seen people working frantically and turning in a lot of overtime to get things done, you may have pressing capacity questions to answer. It’s likely that your time may be best spent in the very short term simply helping the team get their heads above water either by hiring more talent or lending a hand yourself. However, once you no longer see the pain on people’s faces or on their time sheets, it’s a safe bet that you can sit down and perform a capacity study. Alternatively, if you need to justify hires to execs that don’t typically see the day-to-day capacity challenges you face, ask them the questions above and lock in on a capacity method. They may not always agree with your rationale but understanding your situation with actual metrics will give you the insight to either push for more hires or refine your process.