#65: Bad for ROI - 100% Utilisation

Having your team working at 100% utilisation is a good thing for ROI, right?

Software Developers are expensive, surely maximizing their available time is the best way to achieve ROI?

In this episode, I discuss why maximizing time is not as important as value to the end customer - and that focus on 100% utilisation is bad for ROI.

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Published: Wed, 02 Dec 2020 16:32:58 GMT


[00:00:37] Hello and welcome.

[00:00:40] I'm going to continue with my Bad for ROI series, looking at 100 percent utilisation.

[00:00:47] My Bad for ROI series is looking at things that may on the surface seem great, may seem like good for our ROI ,may seem desirable, may be things that we talked been taught that are correct for us to get the best out of our organisations.

[00:01:05] As I say in this episode, I want to talk about 100 percent utilisation. And when I say 100 percent utilisation, I'm talking about people.

[00:01:15] I'm talking about, certainly for the purposes of this podcast, software developers, but it could be expanded to any knowledge worker that works for your business.

[00:01:25] What I'm talking about is trying to get to a point where you are making sure that that an individual is 100 percent utilised.

[00:01:35] Now, this can seem exceptionally desirable.

[00:01:40] You can obviously think that it is going to be good for our ROI because basically are trying to focus on getting the most for the spend.

[00:01:47] Take a software developer who is, to be honest, most likely a very expensive member of your staff - by making sure that they are not idle, making sure they are always working, surely you're actually getting the best return on the investment in that individual.

[00:02:06] The money you're paying, the wages you're paying, surely by making sure that their not idle and always 100 percent utilised, then surely you're getting the best you possibly can out of them. We certainly come to that belief from traditional management. We don't want that spent to be not used. We're spending it. We're spending their wages. We're paying them monthly, weekly, whatever. We want to make sure that all that time is allocated and used.

[00:02:38] So much so, I've actually seen companies use spreadsheets to try and make sure that software developers are completely 100 percent booked up. They have tasks assigned to them that fill their entire day from first thing when they come in to last thing when they go.

[00:02:58] You may be thinking this is simple, isn't it?

[00:03:00] For ROI purposes, I've got an amount I spent and I want to make sure to get the most of time out of it.

[00:03:08] And this is unfortunate where we're going wrong.

[00:03:10] People are equating money spent to time not to value.

[00:03:15] It should be about value and it should be value to the customer - actually value to the organisation. And a developer being 100 percent utilised is not necessarily creating value.

[00:03:31] It's very easy for a developer to seem busy. It's very easy for them to be busy doing stuff that is not producing value, they can be working on 101 things, but if none of those are actually producing any value, wheres your ROI?

[00:03:51] And I've seen in clients before where they think that by watching the developers, making sure they're always sat at the keyboard, always in the office work, can be seen to be doing, then they're going to get the best out of them. They're going to get the best from that software developer.

[00:04:09] And that isn't the case. It isn't a case of just making sure they're busy. You have to really think about making sure they're doing the right thing, not that they're busy.

[00:04:22] There's a real difference. For the right thing, I'm not going to touch too much on in this episode, but if you look at any of my other episodes before about looking at experimental mindset, of being able to take a hypothesis and test whether it adds value, that's the sort of thing I'm thinking about.

[00:04:42] I'm not thinking about making sure that you're getting a full eight hours of a developer typing at the keyboard. It's always concentrating not on time and whether or not their are 100 percent utilised, but rather on the value that you are getting from that work.

[00:05:02] Being 100 percent utilised, almost certainly, the developer will not be focussed on the most important things for the business. They won't be focussed on making sure their driving value - because people will fill their time with things that aren't necessarily the most important.

[00:05:18] But we should also consider - even if you believe you've got them working on the most important things - the dangers of being maxed out.

[00:05:26] An individual being so utilised that they really can't do anything else, it's actually terrible for getting stuff done. Running 100 percent utilisation, it's really quite difficult to maintain that for any length of time.

[00:05:42] Take, for example, if you think about a motorway as an example.

[00:05:46] If you go 100 percent utilisation on a motorway, well done, you've got a car park.

[00:05:53] The motorway is 100 percent utilised in terms you've got the most amount of traffic you could possibly have on it. Unfortunately, it's then not fulfilling its aim of getting anything through. And that's very similar to what happens if you're trying to produce 100 percent utilisation in any knowledge worker.

[00:06:13] If we take that motorway example and you want to get from A to B; you don't want the motorway to be 100 percent utilised when you try to make that journey.

[00:06:24] Depending on how quickly you need to get from A to B, you need to make sure that you have enough capacity to be able to handle it. And on motorway, you will most want to have at least a clear lane if you really want to be able to get somewhere fast.

[00:06:41] And being 100 percent utilised means we don't have room to adjust.

[00:06:45] We make plans, we make estimates which are invariably wrong, not invariably, let me rephrase it, are always wrong. Estimates will always be a guess. Estimate will always be incorrect. The question is by how far.

[00:07:01] We then build plans based on those estimates. So those plans are not going to be correct. Thus, if you are trying to build a spreadsheet and use plans and estimates to try and 100 percent utilise individuals they're going to be wrong. And when they are wrong, what you've done is, because everything is 100 percent utilised, you've got no room to adjust.

[00:07:26] This means that you have no ability to adjust and cope with problems, which is where a lot of frustration comes in with executive teams going: "Why are all our projects backing up?", "Why they're not being delivered on time?" - While the actual people doing the work feel as if they're constantly being hammered and not being able to give enough time to get stuff done.

[00:07:48] We should also consider whether or not 100 percent utilisation would lead to burnout.

[00:07:53] I think it's a fairly safe assumption that if you've got someone running at 100 percent utilisation all the time, it's a matter of time before burnout becomes a real question.

[00:08:03] And I believe as business leaders, we have a real moral imperative to make sure that doesn't happen to our staff.

[00:08:13] I believe as business leaders, we have a moral obligation to our staff - in their health, safety and happiness.

[00:08:22] And if we're going to try and maintain them at 100 percent utilisation, I really do feel there's a danger there of pushing people towards burnout - something I really, really would encourage people to think strongly about and avoid at all cost.

[00:08:38] OK, so in this episode, I've talked about 100 percent utilisation.

[00:08:41] I've talked about why there's a view that it's actually good for our ROI. You've got an expensive resource. You want to make sure you're getting the most out of their time as you can. You want to book out every single second of their day to make sure they're working on something. You want to effectively spreadsheet them out and make sure every single second is utilised by the organisation. That seems like good ROI because you're taking an expensive cost and making sure that it's fully utilised.

[00:09:12] However, in this episode I've talked about utilisation does not mean value.

[00:09:18] So yes, they could be busy, but that does not translate into value for the customer, for the organisation, for whoever you doing the work for thus.

[00:09:27] Think about it differently. Take a step back. Think about what's important for you, what's important for your organisation, what's important for your customer. It's not about.

[00:09:36] Whether or not that software developer is working every second of the day. It's about the value that they can deliver and.

[00:09:45] And by having that 100 percent utilisation, not only are you not getting necessarily the best ROI because you're focussed on the wrong thing, it doesn't allow for that adaptability that you need to have.

[00:09:57] It's going back to being stuck on that 100 percent full motorway. It becomes a limiting factor and it can stifle your organisation so quickly and lead to real problems.

[00:10:13] In the place of it, I'd obviously advocate looking at making sure that your staff are doing the most important things, making sure the teams are working together on looking at the things that produce the most value.

[00:10:25] Then you can look at: "OK, I'm spending this much money, but this is the value I'm getting".

[00:10:30] So always focus on that and then help the team to become more effective and more efficient. And that for me, is always going to be driven by the team coming to you and saying, "we need this", "we need this", "we need this".

[00:10:44] And there are plenty of ways that we can make our teams more efficient, thus turning greater ROI from the expense of the staff to the value that they are producing, which is what so many of these episodes are talking about.

[00:10:59] Thank you for listening. And I look forward to speaking to you again next week.