Two failures, both expensive
Overcommitting means late delivery, quality problems and staff burnout, all of which cost more than the revenue that caused them. Undercommitting means paying people to be idle.
Both come from the same root: not knowing what is committed against what is available, far enough ahead to act.
The view you need
- Available hours per person per week, after holidays and non-delivery time
- Committed hours from signed work, by week
- Probable hours from the pipeline, weighted by likelihood
- The gap, eight to twelve weeks ahead
- The same split by skill, because people are not interchangeable
Eight weeks is the useful horizon for most service businesses: long enough to act on a gap by pushing marketing or hiring, short enough that the numbers mean something.
Be honest about available hours
The commonest error is planning on a full working week. After holidays, sickness, internal work, training, sales support and administration, a realistic delivery figure is substantially lower — frequently around 60 to 70% of contracted hours.
Plan on the real number. Planning on the theoretical one guarantees you are overcommitted before anything goes wrong.
Weight the pipeline honestly
Committed work is committed. Pipeline work should be weighted by probability, and the weightings should be checked against outcomes rather than optimism.
Most businesses discover their proposals convert at a lower rate than assumed, which changes the picture considerably.
The indicators that you are overcommitted
- Delivery dates being agreed without checking the plan
- People routinely working beyond their hours
- Quality problems and rework rising
- Small internal tasks — documentation, improvement, handover — permanently deferred
- Holiday requests being discouraged
Each is a lagging indicator of a planning failure that was visible in the numbers weeks earlier.
Decide the levers in advance
When the gap appears, the options are: push the date, bring in contractors, reduce scope, or decline the work. Deciding which you prefer before the pressure arrives produces better decisions than deciding at the time.
Declining work is a legitimate lever and the one businesses forget they have.