Operations Excellence
8 concepts / ~25 min / Advanced
Scale your operations efficiently: plan capacity, make smart build vs buy decisions, eliminate waste, and automate everything that doesn't require human judgment.
What This Playbook Covers
- ✓Calculate your team's true productive capacity (hint: it's not team size × 40 hours)
- ✓Make build-vs-buy decisions using 3-year Total Cost of Ownership analysis
- ✓Apply lean principles to identify and eliminate the 7 types of operational waste
- ✓Calculate automation ROI and know when manual processes are actually better
- ✓Write OKRs that align team-level work with company-level strategy
Capacity Planning
Operations
💡 The Concept
Capacity planning is the process of determining how much work your team can handle and aligning resources to demand. The core calculation is: Available Capacity = Team Size × Working Hours × Productivity Factor (typically 0.6-0.8 after meetings, admin, and context-switching). A team of 5 engineers working 40h/week at 70% productivity has 140 productive hours/week, not 200. Companies that do capacity planning well ship 35% more features per engineering dollar by eliminating both overwork (burnout → turnover) and underutilization (idle teams → wasted salary).
⚠️ The Trap
The capacity trap is planning at 100% utilization. Organizations that load teams to 95-100% see throughput DECREASE by 20-30% because there's no buffer for bugs, urgent requests, sick days, or creative thinking. McKinsey's research shows optimal knowledge work utilization is 70-85% — above that, quality drops, bugs increase, and burnout skyrockets. Another trap: headcount-based planning. Adding 1 engineer doesn't add 1 engineer's worth of output — it adds 0.5-0.7 due to onboarding, mentoring overhead, and increased communication costs (Brooks's Law).
🎯 The Action
Calculate your team's true capacity: (Number of ICs × Weekly Hours × Productivity Factor) - Planned meetings - On-call hours = Actual Weekly Capacity. Track velocity (story points or tickets completed) over 4-week rolling average. If actual output is consistently below 70% of theoretical capacity, audit where time goes — most teams lose 30-40% to meetings, Slack, and context-switching. Set a 'capacity budget': 70% planned work, 15% unplanned/bugs, 15% tech debt and improvements.
Knowledge Check
Challenge coming soon for this concept.
Use the playbook as context, then scope the live work.
If this playbook maps directly to an operating bottleneck, KnowMBA can help turn it into a diagnostic, sprint, or managed implementation path.