● Operational Excellence · Instrument 02 · v1.1
The Capacity Model
How many hours a team can sell this month, who has them, and where the deficit is hiding — five rows, one sheet per team, one tab per month. The manual, and the template that is the instrument.
Why it matters
A services business sells hours it has not worked yet. The capacity model is the instrument that says how many it has, by person and by month, and how many are already spoken for. I built it for a digital agency that was having real trouble scaling, rebuilt it for scale, and at its peak it carried more than sixty people across more than a hundred concurrent projects on what was, mechanically, a shared spreadsheet. It is the work that made me that agency’s managing partner.
What’s inside
A hundred projects on a spreadsheet. Where the model came from, what it replaced, and why it held: the rigor around it, not the software.
Three numbers. Billable utilization as a target you set, billable actualization as the gap you watch, project margin as the number the budget protects. Why a rate of 1.0 is the commonest way to break the model.
Five rows. Rate, hours, PTO, alloc, used, avail — two typed, four computed — with the template’s own grid on the page.
Reading it. The total lies: read by person first. A deficit gets three moves in order — move, add, decline; a surplus gets one — sell it. The rate is the lever, changed only on evidence.
By team, by month, by skill. One sheet per team, one tab per month three ahead, columns as disciplines for the quarter view. The link to the project budget, and when to leave the spreadsheet — later than the vendors say.
The traffic meeting. Who, before, after, and the agenda in order. The one rule: nothing is accepted without a row.
Standing it up. Ninety days — inventory, traffic, forecast — and the two failure modes. The template, tab by tab, and the checklist.
How to use it
Read the first part once. Open the workbook beside page 6. Copy the Month tab, enter your people and a rate you believe, and give every live project a row. Hold the traffic meeting weekly and read the negatives aloud. Pair it with The Project Budget; each stands alone.
Provenance
Built and perfected as Director of Client Services and then Managing Partner of a digital agency, 2010–2015; run again in 2021 for the delivery teams of a managed services provider. Rebuilt here as a Juan.co instrument with a sanitized template: sample people, sample projects, the formulas intact.