Single finite limiting resource – staff capacity

Why staff capacity is so vitally important right now

Practically every business one looks at has to deal with various factors which will limit company growth in a number of different areas. However, there is usually one factor that is dominant – one “finite limited resource” which in the final analysis determines how far your business will be able to grow. For larger companies and for corporations with considerable resources – and access to capital or finance – the limitations are usually determined by external factors such the size of the “addressable market”. In the SME sector the limitations are much more likely to be imposed by the internal resources available to the business owner and by far the most common of these is staff time.

Managing capacity

The amount of time available for the workforce and the owners to do work is a fundamental constraint for which my shorthand designation is simply “capacity”. Just how much “stuff” can your team get done in a day or a week? Managing how the available capacity is utilized is the biggest lever the owner has for radically changing the performance of their business. The role of the business owner is to make sure all the available staff capacity is used to the fullest extent possible – to deliver on their goals for the business and their personal objectives. Most SME businesses fall a long way short of optimal performance in this area and analyzing the effective use of capacity is something which consumes a very large proportion of the time I spend with clients.

Start at the top!

Start the analysis at the top of the organization. In owner managed businesses it is very common for the owner to continue to perform tasks that are “below their pay grade” – doing stuff that other people in the team could do just as well (or even better!). At some point in the development of the business they may have had no choice – either insufficient money or too few staff – so it was a necessity that became a habit. And, a bad one! Delegating tasks to staff is a key part of developing a strong team and needs to become standard practice. The reality is that in most businesses the owner’s time is not only the most costly – it is also the most valuable. Valuable in this instance because the owner can add the greatest value for the business. For example, an owner could spend 30 minutes completing their own expense claim or spend those thirty minutes talking to a client or a prospect to identify a new opportunity or close a new order! The best option for the well-being of the business is completely obvious – yet it still happens.

By enabling the owner to spend a larger proportion of their time on genuine “value add” activities we clearly create more work for the next tier of management or staff. However, when you count the true cost of completing the task it will have been reduced – so this process is self-funding. Over time you create a cascade in which the most straightforward and repetitive tasks can be performed by the least costly resource – perhaps even an intern or an apprentice. And, all the intermediate layers of management are empowered to ensure the highest possible proportion of their “capacity” is spent on adding value for the organization in ways that are most suited to their personal skills an strengths. You also create an “on-ramp” and a road map for new employees to join and develop in the organization.

Now is the time to optimize staff capacity

It is often very much easier to identify areas and activities that lead to “capacity” being wasted or used ineffectively when one is not part of the the company but an outsider – but an objective observer – as I am for my clients. Liberating the true potential of my clients’ businesses is a good description of how I spend my time and why clients remain happy to pay my bills – year after year. Because the world we are rejoining has changed in lots of different ways, now is the perfect time to make sure that your company’s “capacity” – its ability to get stuff done – is being used optimally. Doing so will speed up your recovery and liberate time to embrace and develop new opportunities.

I explore this whole subject of making best use of the available “capacity” in much more detail in my white paper “Growing your business – the People Dimension” which can be downloaded from this web site – I hope you enjoy reading it.

 

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About Bob Brown

Helping business owner to grow and transform their businesses in preparation for a successful exit, transfer control to a new management team or the next generation. Work with owner/managers over time to develop and execute their exit strategies.

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