Why Available Capacity Isn't Always Usable Capacity

Most strategic planning processes need some way to represent people’s capacity, often as available days or effort grouped by role, skill or team. That is practical and powerful, but it should not be the whole story. Treat those ‘resources’ as fully interchangeable units rather than people, and the numbers can badly mislead.

The people behind the resource numbers

These ‘resources’ are people, and people are not always interchangeable. A nominally available role or skill does not guarantee that the right person has enough usable time, context or specialist knowledge to do the work when the plan needs it. Two people can show the same amount of available capacity on paper while being very different substitutes in practice.

The same gap appears when people are grouped into pools. A team can show spare days in total while the few people who know a particular system, process or customer are already fully committed. On paper, the pool has capacity. In practice, the work that needs those people cannot use it, and spare time elsewhere in the team cannot simply absorb that work. That difference between available and usable capacity is where portfolio plans start to mislead.

The answer is not to replace portfolio planning with a named-person schedule. The practical question is how much portfolio-level resource detail is enough to support a credible choice without recreating detailed resource planning.

Mike Hannan gives a useful example of why that matters. A large IT organisation resequenced its work around senior architects it believed were the bottleneck, only to discover that the real constraint sat upstream in the business. More detail about the architects would not have made the plan more credible because they were not the constraint that mattered.

Where capacity assumptions break down

One place this matters is the ‘data’ on project effort. These estimates are critical to the plan, but they are still estimates. That makes improving their quality worth the effort:

• Important estimates should draw on the people who understand the work. Subject Matter Experts are key for providing sensible estimates but are rarely the people in charge of preparing the business case. Different experts can also give different estimates for the same work, and that variation stays invisible if you only ask one person. Where the estimate matters, collect views independently from a few people with relevant knowledge, then discuss where they differ.

• Be honest about uncertainty. Murphy’s Law tells us that things will go wrong no matter how well we plan. If people feel they need to protect themselves against uncertainty, contingency can become buried inside individual estimates. Make contingency visible and deliberate.

When available time is too fragmented to use

Usable capacity shrinks further when people’s time is split into tiny fractions.

Allocating 1/16^th of someone’s time means about one day a month. Consider that day. By the time they’re back up to speed and through the necessary project update, much of it may already be gone. The actual work then gets squeezed into what remains, or spills into overtime.

Part of the problem is context switching. We’ve all been there and can see it’s stupid, but when it’s the only way to get the Gantt chart the CEO wants to see...surely, it’s OK?

No. If you cannot get your plan to fit into a schedule that is deliverable by people then it’s not a plan – it’s an accident waiting to happen. Take the hit up-front and solve it, rather than putting your head in the sand and hoping that 1/16^th guy bails you out again by missing out on dinner with their family.

The practical lesson is not to model every individual task. Use enough detail to expose the capacity that really constrains the portfolio: scarce skills, specialist roles, shared teams and the time already consumed by BAU or other commitments. Then challenge important estimates with the people who understand the work, and be wary of plans that depend on slicing the same people across too many initiatives.

The word “too” matters. A 2023 study of 42 new-product-development projects and 580 employees at one multinational manufacturer found that project timeliness improved as people worked across more projects concurrently, but only up to a point, then declined at higher loads.

All this points to something we all know deep down. The organization you work in might be talked about like a slick production line. Plans go in one end; amazing projects pop out the other. However, back in the real world, your company is an organic messy entity. Planning capacity by role, skill or team is a useful abstraction, but the ‘resources’ in your spreadsheet are still people. A plan that fits the numbers still has to fit the people who will deliver it.

If this is a recurring portfolio problem, TransparentChoice can model demand and capacity by role, skill, team or other resource pool, show where those constraints come under pressure, and compare portfolio choices against them. See how the software handles capacity-constrained portfolio decisions →

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