There are currently over 34,500 capacity manager jobs being advertised on Linkedin in the United States. That’s close to seven times more than head of marketing roles. This shines a spotlight on a role critical across industries where delivery models are evolving to a point where capacity is fundamental to success.
For some, capacity isn’t a topic that is frequently on their radar. Yet, with others, they acknowledge the obvious importance of the metric; after all, capacity is effectively the potential to do or take-on work, or so they would say.
This view of capacity is in and of itself, simplistic and problematic as the majority assume that the ability to take on work is assessed by regarding capacity in units of time. However, it shouldn’t be framed just by the hours and minutes of a day. It’s a viewpoint that often leads to the ignorance of the emerging and frequently hidden impacts of capacity, which are vast; we’ll explore why shortly.
Capacity’s importance is highlighted by assessing the impact it has across a wide range of business issues:
- Employee engagement including staff turnover.
- Client satisfaction and their propensity to buy more from a supplier.
- Both sales and operational performance for any company.
Therefore to view capacity simply as a time metric is reductive. With such vast consequences across people, customers and business performance, the core make-up of any business runs the risk of being of being damaged. So how are the negative impacts prevented and does it go beyond hiring people with the capacity for capacity? Can an organization put into place the processes, and ideally the technology, to cope with the negative effects capacity has?
Alexa, Define Capacity
In Pixar’s animated film Wall-E, the Captain of the Axiom asks his computer to define dancing because his civilization has devolved to a point where they have forgotten what it is. Conversely, we business types should find defining capacity (from a purely workforce perspective) easy, correct?
According to Precursive's research, The Agile Workforce, the short answer is no. A CEO of a leading professional services company stated in interviews that, when he truly had to think about it, defining capacity wasn’t easy. The difficulty in defining capacity and its meaning wasn’t confined to this CEO as, like the Captain of the Axiom, the majority of people are viewing this metric in a vacuum, so its value to the business has been eroded. This is a common struggle for many companies as capacity is rarely evaluated from the perspective of its true power as a metric and therefore even defining it is difficult. This goes some way to explain why only 15% of the C-Level executives surveyed in the research felt they were managing capacity well - these executives were responsible for a combined workforce of more than 2 million people.
Why should this be the case? On the one hand, we naturally equate the workforce’s capacity, and to a degree even our own, to phases of time yet there is a tendency to unitise that time based on the anecdotal - how long did that take me to do this last time? Also when billing a client you want to be billing against something; that something being time is a simple and easy option. Consider a common scenario when planning potential team members for a project where one person’s skills are far more suited to one task over that of another member? It’s likely that person will do the job more efficiently or effectively, or both.
Here-in lies the cause of several problems when deploying around this traditional, time view over a skill-based view:
- If the work doesn’t match the skill set, the ability of a person to deliver an outcome will be lower and their engagement with the task at hand drops.
- If your employees are measured and incentivized on metrics such as ‘the time it takes to do something’ yet are matched to work against the grain of their skills or knowledge, this in-turn drives disengagement and staff churn.
- Employees don’t want to be seen as “wasting time” on their own development as time isn’t mapped against billable targets, often the focus on an organization.
In the Agile Workforce research, 85% of all participants saw capacity through the limited lens of when every resource is deployed. Translation? Utilization. The particular level of utilization was up for debate, but regardless this is one-dimensional and archaic. Utilization was a great measure, particularly in service-based industries, when managers had nothing else effective enough to measure someone by. Paper-based reports of skill sets and historical data, for example, quickly become outdated and are often hard to access as needed.
But it’s 2019 and automation is the new frontier. People are no longer a commodity and companies need to be moving towards metrics that don’t treat them as such; there is a litany of literature to support this. In comparing the old for new, capacity measures, like the Lion King remake, now have to be more three-dimensional.
What is the Importance of Capacity Planning?
Being randomly assigned work disregards the needs of the employee leading to stagnation of both employee and company. People don’t leave companies, they leave badly run companies. This can be counteracted when a person is deployed based on capacity as a skill, as it highlights one’s strengths meaning employee value is being acknowledged by management.
A common pitfall one should avoid is tying all work back to revenue generation. Yes the company needs to attribute money earned as a result of the work done but this does not necessarily equate with the work having been done efficiently, effectively, or productively as possible.
Could more money have been made if those three boxes were ticked? Could new clients have been serviced or old ones returned to having done the work to an exemplary standard? Could there have been time freed up to grow and develop the workforce for upcoming projects?
That latter point is important. Internal development doesn’t just service the employee’s needs, it nurtures the current skill-set and increases the total capacity of the business. Not only can the capacity of any business evolve, but the company can better attract the right talent. In a soft-skills world with limited talent pools, that has become invaluable.
Pre-emptive capacity planning means that you are ahead of customer demand and able to service requirements with the right skills and knowledge. The financial impact to this is better performance across projects and your portfolio of work.
Manage Capacity in a Different Way
Seventy-seven percent of CEOs find availability of key skills as the biggest threat to their business, and in this environment, capacity management needs to be more three dimensional. Future-forward companies have discovered that deploying around skill-based and experience has a clear correlation to faster and better output. Some have taken this one step further and map the passions of their staff which creates a better synergy between employee and client on multiple levels, from simple communications to having an improved affinity to the work at hand.
But the identification and deployment of skills for teams of 50, 100, 1000+ people is challenging. Finding and deploying that skill or passion is important but very hard to achieve en masse. However leading companies are investing in automation, employee marketplaces and networks as well as predictive AI to map and update their team’s knowledge in real-time and then match that to upcoming projects. This allows you to mobilize people and projects on time and avoid lost revenue and rising costs because of commencement delays. The benefits of having a well understood and forward view of workforce capacity can be seen in each stage of the customer lifecycle.
To build a more agile workforce will require a cultural shift as moving from being measured by time to measured by ability can be an unfamiliar but ultimately positive experience. You want to work in a unified system so that this ability data doesn’t sit in individual silos but is combined to create a meaningful plan that allows you to flex your organizational capabilities.
Capacity as time is retrospective but capacity as a bucket of ability is an organizational muscle that will build reputation among customers, employees and help to differentiate brands that provide great experience to clients.
Keep time at the center of the conversation because you don’t want to be wasting it. However, in an age of digital transformation, capacity shouldn’t be a device to simply monitor people, but rather a positive combination of an entire organization's capability.
Robert Burnell is VP of Marketing for the Resource Management app Precursive, an avid reader and James Bond fan.
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