There is a principle in business that successful leaders who create successful outcomes know well. The leaders who manage their business Capacity and Volume equations are the ones who are most likely to achieve business outcomes.
Leaders who make decisions that support balancing the relationship between their business’ Capacity and Volume are aware of the impact that every decision has on success. Keeping Capacity and Volume in alignment makes good fiscal sense.
Capacity is the set of resources that are needed to perform the essential business functions and processes within an organization. People and automation are two examples of Capacity. Capacity can be managed and manipulated to meet the demands of the volume.
Volume is the amount of work that comes into a business, the requests for services or products from its customers. Orders and contracts are two examples of Volume. Volume is indirectly impacted by marketing, sales, and promotions can reasonably be predicted in most organizations.
Greedy leaders are driven to put more profits and money in their own pockets, and as such will make decisions that negatively impact the Capacity and Volume equilibrium. By reducing their business’ capacity by laying off people or failing to invest in automation, they are creating a shortage that cannot support the volume of work received.
The Covid-19 virus has shone a searchlight on the impact of greedy leadership on the healthcare delivery system, the supply chain management process, and the performance and behaviors of our neighbors, friends, and family.
The lack of staff in hospitals today can be attributed to the cost-cutting measures that greedy leaders took to reduce expenses and increase profits. Additionally, the costs of an education that are required to become a professional healthcare provider drives out many talented people.
Because the Covid-19 virus came on suddenly with little if any planning and preparation, not enough beds in hospitals or other faculties were made ready. By the time, there was a need for x number of beds to treat the patients, it was too late to get them set up.
The lack of durable medical equipment, like ventilators, in hospitals today is the direct result of the decision to under capaticize. This decision along with the lack of a decision about how to increase the capacity of ventilators has led to the imbalance between capacity and volume.
The supply chain management process is supported by another principle that has to do with supply and demand. When the supply chain is running as expected, the demand is being met with the supply. This is working when toilet paper is available for purchase.
When the supply chain loses its capacity in terms of people, it cannot meet the volume demands of its customers. Too few people working in the grocery stores make it impossible to deliver orders in this era of social and physical distance. People might run out of food before they get their next delivery.
When customers buy two months worth of toilet paper in two weeks, the volume has been decimated and will take time to rebound. The ongoing volume of over purchasing the toilet paper or other products results in long term shortages unnecessarily.
The number of outlets where people can buy products and services is reduced when there are not enough open to serve their community. The devastation of not having enough employees to serve the customers and failing to stock the shelves leads to many stored closing their doors.
How people perform in the midst of a crisis is actually more important than how they perform in routine times. The Capacity and Volume principle can be applied to how people behave with each other.
In this current situation, there is a massive need for compassion. People’s Capacity is compromised by their own struggles leading to a misalignment between people’s ability to act compassionately and other people’s need for it.
Too many people lack the discipline required with this pandemic to stay home and stay healthy. Their Capacity to follow the simple directions seems non-present. The orders to stay home are not being complied with and as a result, are threatening the health and well-being of too many people.
Transformation requires the Capacity to see things as they are and know that they are changing to something different. The Volume of change during something like this pandemic can be overwhelming for many people. Finding the balance between the Capacity to transform and the Volume of change can be achieved by making good sound decisions.
The Covid-19 virus has brought out the best in many people and there are countless stories of some amazing acts of kindness. These stories deserve more attention and celebration than is being shared in the media and on social media. These acts of kindness are likely being done by people, who sadly do not identity as leaders.
The impact of greedy leaders’ decisions, to put profits above people, have had a role in creating this imbalance between Capacity and Volume. the recovery period for making up for the decisions may exceed the timeline for overcoming the pandemic.
Only by following the proven principles in business and living in integrity with a set of core values, can overcoming this pandemic be achieved successfully. By pulling together, with generous leadership, can this experience reinforce the principles that make businesses successful for everyone.
The lesson learned from the Capacity and Volume principle is People equals Profits and vice versa. Profits over People is out of balance with the key components of the principle, and not sustainable.
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