Tracking Your Team Capacity using OKRs

Team Planning

This weekend I watched a film about the story behind McDonald’s, I had seen it come up on sky quite a few times, but I never gave it a moments thought until I lost the vote on the movie selection at home (and wow I am so glad that I did). The Founder tells the true story about the successful growth of our all-time favourite fast-food company McDonald’s. There is one specific scene that blew my operational mind whereby the two original creators of the business draw out every single form of operation to the customer journey on a tennis court. Each time, they ask their staff to act out their jobs on that tennis court, measuring time, efficiency, the natural flow of the working model and therefore identifying any bottlenecks within the process.

In the world of an Operations Manager, discovering processes that are efficient, smooth, productive and cost-effective, is key. When you apply this to a Digital Marketing agency, one of my first goals at Embryo was to implement a report that enabled us to clearly see the team levels of capacity based on the current levels of retainer.

You may be thinking that this blog is therefore only applicable to Operations Managers within digital agencies, however, the methodology can be applied successfully into any business.

First of all, let’s look at the objective and key results (OKRs) that we need to consider here:

Objective (what your goal is): Identify the capacity available within your business.

Key results: (what you need to track in order to achieve the objective)

  1. Identify how many hours provides one person with a maximum capacity
  2. Identify how many hours are currently being spent internally for your business.
  3. Identify how many hours need to be allocated each month based on your service/product income.

Now that we have identified the above factors. Let’s look at those key results in detail…

Key result 1: Identify how many hours provides one person with a maximum capacity

Based on your company’s contracted working hours, calculate the average hours that a staff member works in any one given month. For example, as a company, our contracted hours are 9-5 pm, five days a week with a one-hour lunch break. This makes the formula:

7 hours per day x 5 days per week = 35 hours per week.

35 hours x 4 weeks in one month = 140 hours

On average a person works 150 hours per month based on the variation of working days within each month so let’s use this as a baseline. Now you successfully have your answer to key result number one.

Key result 2: Identify how many hours are currently being spent internally on your business

At this point, you need to look at how many hours need to be allocated to your own business internally every single month. These are tasks that happen without fail, it is important to factor in the time spent internally and not just on your clients/ products. Ask yourself a few questions to help with this, such as:

  • Do your team have regular internal meetings each month?
  • Do your team write blogs for your website each month?
  • Is there a certain amount of reporting that needs to be done?
  • Do you need to factor in administrative task time?
  • Does your product require regular updates?

Once you have a solid number of hours that needs to be factored into your team’s capacity every month, make a note of this and be sure to increase this slightly as your company starts to grow. For the purpose of the example, let’s say that this number of hours per person is 50 hours per month.

Equation refresher

Ok, so far we know that your team spends 50 hours per month regardless, on tasks that are compulsory for your business. We also know that they only have 150 hours available per month to account for. So that leaves them with 100 hours spare to factor in time for your product/service/client offering (the task that drives the income).

150 hours to account for – 5 hours spent internally = 100 hours 

Key result 3: Identify how many hours need to be allocated each month based on your service/product income

For key result 3, you need to consider your regular income and how much time your team needs to spend in order to fulfil that income (tip, this could be based on an internal hourly rate you work off or a specific package that you offer or a flat fee that provides X level of service). For example, if your business has an internal hourly rate you can quite quickly identify the number of hours that your business needs to factor in every single month in order to have fully serviced your clients/business model.

For example, let’s say an estate agency charges a flat fee of £2000.00 to sell your home, which may involve the following (plus more).

  • Liaising with yourself, solicitors or mortgage advisors
  • Visits to your home
  • Photos for advertising
  • Viewings for your home
  • Handing the sales and negotiations
  • Administration tasks for any of the above.

Once you have a list of tasks needed to fulfil the job from start to finish (transaction) you can then allocate a time that it takes to complete these jobs. Let’s say in this case for the example that the above equates to 50 hours. Once you get to this point the data you can look at can get even more specific, e.g you can now discover the hourly rate, and how many transactions one team member can handle at once.

Equation refresher

Now to the exciting part, you have now identified the following that each team member needs to factor into their capacity per month:

  • 150 hours available within the month to account for.
  • 50 of these hours MUST be spent on internal tasks every month
  • It takes 50 hours per transaction for an end to end full-service offering.

To make it easier to understand, let’s say that each person handles one transaction at a time (so 50 service offering hours per month only). All that is left to do to achieve your objective is to solve the final equation:

150 hours (total to be accountable for each month) – 100 hours (internal hours + service offering hours) = 50 hours available capacity per staff member. 

You may think that the process stops there, however, you now also have a guide to how much more you can bring into your business in order to grow further. Take that final capacity figure and transfer this into monetary value (this could be based on your flat fee/ hourly rate/ unique package that you offer).

Based on the above, we have already identified that 50 hours = £2000.00 flat fee, so look at how much of this capacity data applies to your WHOLE team. For this specific example let’s say the business has 10 staff all working on one transaction each, leaving them all with 50 hours of available capacity. So:

Model = One transaction per person, in a team of 10.

Available capacity per person = 50 hours (based our equation above)

50 hours = £2000.00 service flat-fee

£2000.00 flat fee x 10 staff members = £20,000.00 worth of income available to sell in order to fill your capacity levels.

Objective, complete! If you regularly use this model, you will be able to closely monitor your company capacity levels, discover any sales target opportunities and also spot whether you need to recruit for new team members. This is something I regularly focus on each month for our team. This is one thing I love about my role, not only do I get to produce important data for our sales team, but I also get to provide the delivery team with a better understanding of this too. I am really interested to hear about other successful ways that people produce this data, so please do get in touch with me directly and I would be glad to hear from you, cicely@embryodigital.co.uk. I hope you found this blog as insightful and as fascinating as I do!