Handle Outselling Capacity

Capacity is the maximum possible output of a company. In the A/E/C industry capacity is usually measured in numbers of hours. Planning looks at the right amount of resources to cover not only current projects, but those coming on line in the near future. Since many firms are very busy these days, PSMJ’s Dave Burstein wonders how many leaders are currently worried about outselling capacity. “Right now, most firms find it easier to get more work than to hire more people,” Burstein says. But despite consultant advice to “stress” capacity, most firm leaders are worried about how to handle outselling their capacity. One thing that many principals fail to consider is the lag time between the date the client says they will start the project and the date they actually start it, Burstein says. “One large engineering firm studied this lag time scientifically and came up with some interesting results,” he explains. “For example, they found that on transportation projects, there was typically a 6 – 9 month slippage between the RFP start date and the actual project start date. “For projects in New York City or Los Angeles, the slippage averaged 12 months. And on design-build projects, the slippage averaged 18 months!” So, when considering whether you have (or can hire) the capacity to do the projects you are proposing, remember that they don’t always start when the clients say they will.