Your team is working at full capacity – and yet profits are falling

All positions are filled. The order books are full. Everyone is doing something. And yet: per capita turnover is stagnating, margins are slipping, and the feeling is growing that hiring more people wouldn’t solve the problem - it would just make it more expensive. This feeling is not a management failure. It is a structural signal. And it has a precise mechanism that most organisations never see because they are looking in the wrong place.

The problem isn’t capacity utilisation - it’s what that capacity is being used for

When capacity and results drift apart, the standard diagnosis is: too few people, too little time, too few resources. Yet the Slack State of Work Report 2023 reveals something different: German employees spend just under a third of their working hours - specifically 29 per cent - on tasks that do not directly contribute to their goals, but are merely carried out to appear productive. A third. In an organisation with 30 employees, that equates to ten full-time positions - which are occupied every day but do not generate value-adding results.

This isn’t laziness. It’s systemic logic. 36 per cent of employees spend too much time on meetings and emails, 30 per cent struggle to concentrate, and 27 per cent struggle to coordinate with colleagues. None of this is down to character flaws - these are structural inefficiencies that burn through capacity every day, capacity that should actually be contributing to tangible results.

Why multitasking depresses revenue per head - even though everyone is busy

The real mechanism runs deeper. In project- and delivery-heavy organisations, teams almost always work on several things at once. It feels like flexibility. But it is the most expensive productivity killer there is.

Negative multitasking is considered the main cause of problems in multi-project management: tasks are not completed before a new one is started, leading to a significant delay in all tasks. A study by GPM, the German Association for Project Management, involving nearly 500 participants from 20 sectors, brings the scale of the problem into sharp focus: Almost 70 per cent of study participants believe that at least 30 per cent of project duration could be saved by avoiding multitasking.

And this has direct economic consequences: According to the study, where work is carried out on several projects and tasks simultaneously, 25 per cent of turnover and 20 per cent of productivity are lost. Not because of a lack of commitment - but because of the way work is allocated and initiated. In the study, only 10 per cent of respondents stated that they were able to work continuously on a task until its completion.

Being busy and delivering results are two different things. The difference between the two is profit.

What this actually costs - in hours, decisions and margin

Imagine a typical week: a project is waiting for a decision that isn’t being made. Another project is launched even though the previous one isn’t finished yet. A third initiative is running in parallel because someone said ‘yes’ before it was clear where the capacity would come from. The result: everyone is working to full capacity, but nothing gets finished.

What this really costs usually remains hidden - because the accounts record hours, not completion rates. Capacity utilisation provides insight into how many hours team members bill in relation to the total hours worked. However, this metric says nothing about whether this figure is optimal in relation to the company’s costs. In other words: high utilisation and poor margins are not mutually exclusive - they often stem from the same source.

Added to this is the effort involved in rework. The causes of multitasking cited include a lack of prioritisation (43 per cent) and constant changes to operational priorities (80 per cent), as well as insufficient project preparation (75 per cent) and self-interest in the allocation of resources (66 per cent). All of this creates feedback loops: because nothing ever really gets finished, the coordination effort increases. Because the coordination effort increases, there is less time for value-adding work. And so on.

What has already been tried - and why it doesn’t help

Most organisations in this situation have already taken action. They have introduced new project management tools. Held retrospectives. Defined roles more clearly. Delegated more. Sometimes they have even hired staff - only to find that the pattern repeats itself, just with more people involved.

This isn’t down to poor implementation. It’s because these measures are tackling the wrong issue. Researchers at Ohio State University showed that, under multitasking conditions, the brain automatically forms a hierarchy - but the wrong one: urgent, unimportant stimuli take precedence over strategically important tasks. Tools and processes won’t change this unless the flow of work itself is altered - that is, the question of how much is in the system at any one time before anything gets finished.

According to a recent study, interruptions, meetings and multitasking are among the main time-wasters that cause employees to lose five working days per month. Five days per month - per employee. These are structural losses that no new tool can automatically resolve.

Where the real per-capita revenue lies

The real question is not: “How do I get more out of my people?” It is: “Where is work getting stuck in my organisation - and what needs to change first to produce more finished results?”

The answer is almost never “more resources”. It is almost always a combination of three factors:

• Too much in the system at once - work that is started but not completed
• Decision bottlenecks - points where work is waiting because someone cannot or is not allowed to make a decision
• Invisible dependencies - handover points between teams or roles that nobody manages

None of these factors appear in traditional resource planning. All three are measurable. And all three can be changed without creating new roles. For organisations that perform poorly in terms of revenue per capita, improvement often requires a close look at overheads and resource allocation - specifically: whether the balance between administrative and value-adding activities is right.

What the first step is

Before anything can be optimised, it must become clear where work actually lies today. Not where one suspects it is - but where it manifests itself in the system. This is not a question of experience or intuition. It is a question of observation: Which work has been started but not finished? Where are things waiting for decisions? Which projects are running in parallel, even though they shouldn’t be?

Creating this visibility doesn’t take months. It doesn’t require a major change in methodology. And it is the only starting point that leads to change which delivers results - not just in the process.

If you want to see where work is getting stuck in your organisation today and which change will first generate more finished results, that is exactly what we at Scaled Innovation will work out together in 10 working days - without a new method, without a new tool.