Putting It All Together—The Mechanics of Capacity Management

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Categories: Capacity and Demand


Previous postings in this series have highlighted certain aspects of capacity management:

  • Attending to the effects of future shock: resistance, results, encroachment, credibility
  • The mental, emotional, and physical energy required to make adjustments in expectations
  • The difference between capacity and resources
  • Operating in The Zone
  • Calculating change demand and measuring remaining capacity

In this final posting, we’ll look at the mechanics of the actual capacity management process and explore how it can be used to balance the demands of change with the capacity that remains.

Numerous perspectives and activities can be used as interventions for better management of an organization’s remaining capacity. Below is a brief overview of just a few that cluster under the five primary capacity management factors (performance, quality, safety, people, and progress):

  • Determine the amount of assimilation demand that will be generated from the various changes underway and being considered.
  • Assess the remaining capacity people have to absorb all these changes.
  • Determine the desired balance between demand and capacity (stretching the organization’s limits while keeping change-related dysfunction within acceptable boundaries).
  • Compare the desired balance with existing circumstances. If this comparison reveals that demand currently exceeds or will exceed capacity beyond acceptable limits, some prioritization and tough decisions are in order. (If demand is below capacity, engaging additional changes can be considered.)

Prioritization

All major initiatives should be categorized into one of three classifications:

  • Business Imperatives: For these projects, the price of the status quo is prohibitively high and the initiative in question is the best available solution for achieving the desired results.
  • Good Ideas: These projects provide compelling reasons for moving forward, but either the status quo is acceptable (though not preferable) and/or there are other options to pursue to reach the desired result and/or there is insufficient remaining change capacity to realize the results.
  • Unacceptable Ideas: These projects cost more in terms of time, money, and effort than the value they create.

When change demand exceeds the capacity to absorb, focus first on the low-hanging fruit. Help your client ensure all the unacceptable ideas (as determined by senior leadership) have been eliminated from the playing field. This may not be as easy as it sounds because of political pressure to keep certain pet projects alive beyond their viable life span.

Next comes the really hard part—separating good ideas from business imperatives. Despite the tendency of many organizations to pursue any change that creates some degree of value, during periods of overload, the priority to support change must be placed on business imperatives. As a basic guideline, allocating assimilation capacity to good ideas shouldn’t even be considered until all the business imperatives have been properly addressed.

Tough Decisions

Once prioritization is complete, it is not unusual to find the list of business imperatives still exceeding remaining capacity. If the aggregate demand of all the critical changes is beyond what people can absorb, some of the initiatives that appeared to be imperatives will have to be reclassified as good ideas. The “realization” designation must be strictly reserved for business imperatives. A good idea can be granted realization status only if capacity remains after all business imperatives have been properly supported. This means, once remaining capacity is consumed, some really tough decisions must be made. There are five options:

  • Realization: Implement the project in a way that ensures the solution works functionally or technically as designed and the people affected reflect the full spirit of its intent (rather than just going through the motions). This requires that a certain degree of “implementation integrity” be attained (i.e., the desired mindsets/behaviors are demonstrated in a quality manner and are sustained over an appropriate amount of time).
  • Re-Scope: Modify the stated goals, timetables, scale, and/or specifications of the project to reduce the overall resource consumption.
  • Delay: Put the project on hold with no further action taken until formally sanctioned by sponsors.
  • Install: Pursue the project with the understanding that the results accomplished will be less than the stated goals and/or they will be short-term in duration and/or superficial in nature.
  • Terminate: Stop the project altogether. Discontinue funding and other resources, and announce that the project is no longer sanctioned by the sponsors.

Making these kinds of decisions is tough for leaders. Determining which initiatives must be downgraded from former business imperatives to good ideas, re-scoped, or terminated altogether can be very difficult, especially when some of the endeavors are the sponsor’s favorites or extreme political pressure is being applied. Leaders need guidance and support to address this challenging task appropriately and it is our role as change practitioners to be there for them.

The Future Is Now

Future shock poses a significant threat to an organization’s ability to implement change, making it one of the most important execution pitfalls to avoid. It is vital that change sponsors and agents be both knowledgeable and skilled in: 1) assessing people’s abilities to take on additional change, and 2) helping leaders make the tough decisions required to keep the proper balance between change-related demand and capacity.

Posted on: November 17, 2010 02:58 PM | Permalink

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