4 Recommendations for effective Capacity Management

The COVID-19 outbreak poses a significant challenge across the globe to large corporations, small businesses, leaders and their teams. Many companies are already facing wide-ranging economic effects and industry-specific impacts. As the virus continues to spread around the globe, organizations are shifting to home office.

More and more of us are starting to make changes to the way we work and collaborate.  A lack of or insufficient capacity management is one of the most significant pitfalls when switching to remote teams.

Finding the balance between useful planning and time consuming reporting – Capacity Management is always a challenge for complex organizations. In times of the COVID 19 pandemic it can easily become huge. Let’s face it: All organisations have more to do than capacity to deliver. The idea of having (or getting) enough capacity to deliver everything that needs to be done is romantic adjacent to naive. Consequence is the need to allocate resources to the most important topics and to have solid estimates of what is required to deliver work packages. Teams, departments and even projects must have enough capacity available to be able to deliver in-time and at best in-budget results. Cornerstone for a running effective Capacity Management process is proper capacity planning. Capacity planning defines the process by which an organization can estimate current and future needs.  It is important to take enough time to conduct your planning. Particularly in a home office setup, if the quality of your capacity planning is not good, you might overwhelm a few of your people while others don’t have enough tasks to keep them busy. It might lead to the point where team members do not feel valued. You start falling behind schedule and costs start to increase.

In our group, we facilitate every day change at large and small scale. If you do not have yet a system implemented and you are thinking about an easy to use way in times of social distancing – or if you want to rethink the way how your remote team deals with Capacity Management-you might find these 4 recommendations helpful:

  1. PRIMARY PURPOSE – “The only failure one should fear, is not hugging to the purpose they see as best.“ George Eliot

As per definition Capacity Management is a process that helps to meet business demands through an approach which ensures that resources are able to meet present and future goals. However, as a manager you should ask yourself in times like these, what is the purpose of establishing Capacity Management? What is your WHY? Do you just want a monitoring tool to track record of what your team is doing? Do you want a planning tool with a horizon of two weeks in order to react short-term to possible changes? Or, do you want a full process including a resource planning with a mid- to long-term horizon including monitoring tools and review sessions in pre-defined time periods to be more accurate in the resource forecasting? Allowing timely discovery of possible constraints, unforeseen costs, and potential risks as well as demonstrate the proper use of resources to a customer or to management?

In our group we found it helpful to see the existing layers of an organization. Each layer might have a different purpose. A team member might just want to coordinate his or her efforts with members of other teams in order to achieve the results of a multi-team project. Another team member would want the same however including the resources of an external provider. And the Team Manager, may want to coordinate the activities of his or her staff members working on daily business and special projects. I recommend you to be perfectly clear about the primary purpose of a Capacity Management in order to set up the best suited systems and for your team to see its added value.

  1. ABSOLUTE vs RELATIVE FIGURES – visualize the proper way and remember the power of the  absolute. 

When planning for capacity, whether coming up with workload scenarios or just plotting out what resources you will need to ensure future results, it’s important to have accurate reporting from which you can gain insight. The question is: Should you monitor absolute or relative figures? While some Managers tend to focus just on relative figures because they deliver a broader vision we recommend to use both. The reason is that while conducting the planning or checking current figures you or your team might fall in the trap of thinking that you must arrive at 100%. Just because staff works full-time, does not mean, that they will work 100% on their allocated tasks. If you already plan 100% of your time on work packages, every additional email, every request for peer help, every meeting will distract and vaporize the possibility to achieve your goals. Unrealistic capacity planning leads automatically to frustration and disappointing results. The same applies for unspecific planning: Limiting your capacity planning to percentages doesn’t reflect variances in the available person days through effects like public holidays, vacations, workshops, etc. Percentages are great to analyze and critically reflect the allocation of capacity towards certain topics or tasks (e.g. 20% for project A, 10% for admin). But it doesn’t help you to plan and secure capacity to deliver certain results. Looking at absolute numbers will help you to see the blank reality.

  1. DEPTH and GRANULARITY – Keep calm and keep it simple 

When talking about Capacity Management we are talking about time.

It’s really clear that the most precious resource we all have is time“ – Steve Jobs.

Time management is a critical part of managing a team whether it is a unit a department or a project. Without it, it doesn’t matter what resource scheduling software or plan you have. One common mistake that arises in time management is that the time estimates are not well founded, because people just use the „rule of thumb“ or because people say „we have done this task always this way“ without really critically reflecting whether the used time in the past is realistic or not. These estimates will be used to schedule resources and set deadlines. If the estimates are not well-founded, then your Capacity Management will fail. However there is also the pitfall of going into too much depth for the purpose of your capacity management. Your team may easily fall into what we call “paralysis through analysis“.

To avoid this problem, you should check with each team member to understand how they came up with their time estimates. You should build here on the experience of your team members on comparable work in the past as a basis for the estimates. This factual data can be used to support the time estimates for current and future planning. Take the future into account because knowing which resources you need at which time is a fundamental element for you as a manager. Planning Poker is a field tested agile tool which can help you and your team. Ensure the step to block those resources. Failing to block them is a common mistake that can lead to delays and frustrations of team and management. The deeper you go with your estimates the more granular could your plan and management tool look like. Be careful to always recap on the primary purpose of your Capacity Management. We recommend to have an approach with different planning horizons on strategic and tactical level for managers and let the short-term level responsibility for the people who are best suited to plan it.

Although there is plenty of software in the market, depending on the purpose you have you can develop a simple to use template that you co-create with your team. Something that is user-friendly for the team and delivers all the information you need. In these times of social distancing a simple solution will reduce stress for your people.

  1. BUFFER – “there is nothing certain but the uncertain“ – Proverb. 

There is always the “unknown“ and resource allocation should also take it into account – so be ready to plan for the uncertain.

In the pursuit to become more efficient and reduce costs many organizations have come to rely on tight  schedules and interdependencies. There is little room left to maneuver when something unpredictable hits you. Buffers are vital for every organization in order to accommodate uncertainties like sick leave, unplanned staff meetings, collaboration in a new urgent company-wide project or just simply having a bad day. I am pretty sure we all have lived such phases. So, if the current actual picture may really show a 100% allocation or close to it or above, your task as manager is to crosscheck the figures and make adjustments as well as to ensure that buffers are included. If not, you know already what your next step will need to be .… prioritisation including a buffer for the uncertain!

In these times of social distancing home office is a new experience for many people. It is too easy to get distracted and lose focus because of the gravity of the pandemic. The concern about family and loved ones is a huge weight on all of us. Having the commitment of the clear capacity estimates can help to keep the momentum. A simple solution with something that everyone knows rather than fancy complex new systems which require a big introduction can be a priceless asset. People need to feel comfortable. As a manager make sure you keep 1:1s so you are aware when a team member needs support.

We offer support and coaching for organizations which introduce or develop their home office capabilities.

In our group we deeply believe in the importance of ensuring that PEOPLE, PROCESS, CULTURE and SYSTEMS are in sync. I hope these recommendations will help you synchronise all of them in these times.