Before we jump in: September Conferences!
I’m heading to Enterprise Tech Leadership Summit in Las Vegas: September 23–25, 2025. I’m a huge fan of Gene Kim’s work and the community he has created. Dotwork is sponsoring, so I’ll be “working the booth.” Drop by if you’re around.
I’ll also be in Cleveland next week (9th and 10th) for Industry. Would love to meet people in person.
Lately, I’ve been researching the mental models, mechanisms, and reporting practices behind ‘capacity’ allocation. At the day-job I have to figure out how to walk a tightrope between what our customers ask for, and what will ultimately help companies.
Spoiler: the concept of capacity allocation is fraught with misunderstanding, and companies waste a lot of money (and do a lot of damage) by mistaking time allocation for capacity allocation.
The time-as-capacity mental model is straightforward: ‘Where do we put our time?’ Five people working 40 hours equals 200 hours to divide up. Go! You allocate capacity by deciding where to spend your time, and you report on capacity allocation by tagging the time spent by theme, bucket, category, etc.
But capacity allocation is much more nuanced.
A team (and the technology it relies on) holds a kind of potential energy that can be directed in different ways and shaped by context. From this perspective, capacity allocation is not about tallying hours, but about deciding and continually improving how we direct that energy.
This view has a strong foundation in lean manufacturing and the theory of constraints.
In a manufacturing context, capacity usually starts with the theoretical maximum output under ideal conditions (known as design capacity). But what matters more in practice is effective capacity, which takes into account factors like scheduled maintenance, breaks, supply chain delays, changeovers, quality checks, and staffing fluctuations.
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