TBM 377: Time Allocation != Capacity Allocation

Overview
The article by John Cutler discusses the common misunderstanding between time allocation (how people schedule their work) and capacity allocation (the actual amount of work they can complete). It highlights why treating time as a proxy for capacity can cause over-commitment, hidden bottlenecks, and financial loss.

Key Takeaways

• Time allocation does not equal capacity; teams often have less productive bandwidth than their calendars suggest.
• Mis-interpreting capacity leads to wasted money and damage to product outcomes.
• Accurate capacity planning requires measuring actual output, accounting for interruptions, and distinguishing between scheduled time and usable effort.
• Leaders should shift metrics from hours logged to deliverable velocity and realistic throughput.

Who Would Benefit

• Engineering managers responsible for sprint planning.
• Technical leaders overseeing resource budgeting.
• Product managers coordinating cross-functional work.
• Executives interested in improving operational efficiency.

Frameworks and Methodologies

• Capacity Planning
• Flow Metrics (e.g., cycle time, throughput)
• Lean Management principles