Capacity is Not Just for Machines!

When the term Capacity is used in business, it's not just about factory floors or distribution facilities. Capacity extends its reach to various aspects of business operations. The term typically refers to the maximum number of widgets a machine can process per hour or the total number of packages in a warehouse that can be processed daily. Still, it also encompasses the potential of a team, the efficiency of a process, or the capability of a system.

I have spent a long career helping organizations either increase their overall organizational capacity or, in most cases, understand the optimum capacity of machines and facilities. By “optimum capacity,” I mean the ideal throughput for a given machine or facility. For instance, many machines can operate faster than the prescribed optimum capacity; however, when you run them at faster speeds, other collateral problems can occur, such as increased waste, excessive wear on the machines or tooling, or the creation of bottlenecks that impact the rest of the operation. ?The same is true in distribution facilities when you attempt to pick and pack too fast. The result can be increased errors, decreased customer satisfaction, and forced errors in replenishment practices. In every situation, there is that “optimum capacity” at which an organization performs at its best and most efficiently.

As a management consultant, I have also observed a less talked-about type of capacity that can have a greater impact than the capacity of machines or picking systems. Human capacity is much more subtle and harder to measure than the capacity of a mechanical system or device; however, understanding human capacity can resolve many issues and avoid costly problems within every organization.

To illustrate this point, we all know someone who was a rock star at one organization but then transitioned to a different opportunity and failed miserably. I have known a crazy successful entrepreneur (in a large family business) who was selected to become the CEO of a large, global company. While he was uber-successful in his business, his time as CEO of the much bigger company was short-lived. We all know of someone who was the sales leader of their company, but then when promoted to VP of Sales, their career imploded. We have all learned that great salespeople don’t necessarily make great leaders or visionaries. I have also seen that great engineers don’t necessarily excel at plant management, good programmers often don’t make good system designers, and world-renowned surgeons don’t automatically make good CEOs of hospitals. ?

More specifically, I have watched leaders who perform well for years at sales revenues of $50 million when the companies they lead are within that range, but when the company tries to grow to $75 million, they falter. Managing a company well within its bounds (or current capacity) is far different than causing the changes required to see it move to the next level of its growth. Just as “machines” are selected for a specific purpose (and volume) based on their performance capabilities, people should similarly be selected to match their capacity with the task assigned. When the “task” or corporate objectives change, it is unreasonable to expect summarily that the current leaders have the intellectual, social, and operational capacity to adapt to the new company goals and standards. This often fails at some level within the organization, resulting in unhappy shareholders and frustrated leaders. ??

There is a significant difference between mechanical capacity and the capacity of company leaders or staff. Leaders and staff are people. Machines are just, well …..machines, or capital fixtures. Sometimes, they can be reworked to reach new capacities, but they are often discarded or recycled in some plant that doesn’t require higher capacity. On the other hand, people are a much more valuable asset and, given the proper circumstances, can adapt to and develop a higher capacity level within their own work. Unfortunately, over the years and within the hundreds of companies where I have consulted, far too few resources have been spent on “enhancing” people when resources flow freely to enhance machines or operational systems.

So what can a company do to expand the capacity of their leaders and staff? There are practical ways to accomplish this, but I should mention that sometimes leaders and staff have truly reached their capacity (or potential), or maybe they are perfectly content where they are. Not everyone has the “a little bit more” gene that drives much of our business culture. Let me illustrate.

I once consulted with a firm where the CEO had personnel issues and strife within the leadership team. After watching their individual behaviors and work habits, I asked the CEO about one specific leader. Something was wrong, and I struggled to put my finger on it. I asked the CEO if that person was happy in their role, and I received a very harsh response: “That lady loves her job and is doing exactly what she wants to do! She is one of our most productive managers!” “Fair enough,” I responded, asking him if he would allow me to probe deeper. “Go ahead,” he replied, “She loves it here and loves what she is doing.”

So I went to her office and asked a very simple question with no explanation: “Do you like your job?” After a few moments of deathly silence, the tears started to flow. “What’s wrong?” I asked. Then she finally answered, “Actually, I hate my job. What I always wanted to be was a teacher!” For those curious, she teaches music and theatre in Germany today. Sometimes, people, for whatever reason, just aren’t the right fit.

For most situations and people, however, there are things a company can do to help their staff and leaders reach new capacities:

1.?????? Education – continuous learning, not only about one’s role but about anything. Broadening knowledge in many areas helps people be better problem solvers and to think about innovation and change. I so respect the CEO of a Cleveland company who believed this so deeply that he created a “company university” where staff could attend classes on various subjects unrelated to his business and core product line.

2.?????? Communication – Create situations and environments where leaders and workers from various departments regularly talk and share problems and ideas. Not only does this create teamwork, but it might also foster movement and promotion of people within the organization at a far more efficient level than hiring new people who must learn about the company’s culture and operations.

3.?????? Challenge – Most people like a challenge and are just waiting for the opportunity to try something new or different. Find ways within your company to introduce staff to things they haven’t done before. Hidden talents are a great treasure and are often revealed in environments where staff is invited and challenged to do new tasks. ?

As much talk as there is about automation taking over the workforce, people still remain the greatest asset a company can have. Find ways to increase their “capacity.” It can yield great dividends.