The thesisSample data · not a live customer

Early warning · Engagement #4471

Northwind Group

Elevated slippage risk

Forecast window: Next 90 days · High — 3 of 3 leading signals moving in the same direction

What changed

  • Senior allocation drifted 35% → 51% over six weeks

    MarginMix effort bands (Senior / Mid / Execution split) → M_discipline · H_drag

  • 2 of 3 engagement leads trending into red-zone load

    Headroom Core / Toxic / Growth load + burnout risk band → H_drag

  • 3 deliverables shipped outside contracted scope this month

    L_shadow drivers (unscoped deliverables × baseline hours) → L_shadow

Recommended

Run the 90-day action order; validate capacity before moving senior hours.

The warning is the product. Π — the Behavioral Equation of Profit — is why it is right.

Behind the warning · sample data

Where the warning comes from

Northwind Group, a 34-person delivery footprint. The operating data arrives from the company's own systems, passes through MarginMix risk logic and Headroom cognitive load, and resolves into Π — the arithmetic that makes the warning a forecast rather than a hunch.

Illustrative sample dataset — no live customer data. The fields fill themselves.

01

Company's own sources

Data arrives from systems that already exist

No new tracking layer. The OS reads what finance, commercial and resourcing already maintain, plus the behavioral telemetry Headroom and MarginMix generate.

SAP / ERP

Financial system of record

Synced
Annual contract value
$2,400,000
Baseline cost (loaded)
$1,610,000
Sales commission
6.0% · $144,000
Monthly retainer
$150,000
Outcome-based fees at risk
15% of fees
Portfolio value (ecosystem)
$3,870,000

Excel / Rate card

Commercial modeling

Synced
Card-rate ideal revenue
$2,950,000
Realized vs card rate
0.81
Blended cost rate
$62 / hour
Replacement cost per exit
$48,000
Delivery headcount
34 FTE
Senior mix
21% of FTE

Workfront / Workday

Effort & workforce telemetry

Synced
Planned hours
41,200
Actual hours logged
46,900
On-scope hours
39,400
Coordination / meeting hours
11,260
Senior hours on delivery
7,980
Rework / iteration cycles
4.2 avg per deliverable

Headroom + MarginMix

Behavioral telemetry

Synced
Calendar events analyzed
3,418 (90-day window)
Core load (avg)
58 / 100
Toxic load (avg)
71 / 100
Growth load (avg)
22 / 100
MarginMix assessments
27 questions × 9 leads
Confidence signal
Neutral
02

Processing layer

Every signal is routed, weighted and scored

27 MarginMix questions map to five weighted dimensions. Headroom's Sweller decomposition runs in parallel on 3,418 calendar events. Both feed the same ledger.

MarginMix weighted scoring model

5 dimensions · 27 signals

Workforce Intensity

weight 30% · Q13 Q15 Q16 Q20 Q21

Most direct driver of margin erosion

78 /100

Coordination Entropy

weight 25% · Q14 Q18 Q22

Compounding overhead across delivery layers

72 /100

Commercial Exposure

weight 20% · Q7 Q9 Q10 Q17

Pricing and scope risk

55 /100

Volatility Control

weight 15% · Q11 Q12

Client-side unpredictability

60 /100

Measurement Maturity

weight 10% · Q19 Q24 Q25 Q26

AI substitution and oversight risk

45 /100

Composite risk

66

Verdict

Structurally Fragile

Confidence signal is neutral, so no hard override fires. Score routes straight into the behavioral cost terms below.

03

Base layer

Current commercials and resource allocation

What the business believes it is earning, and where the people actually are.

Contract value

$2,400,000

Annual, signed

Retainer (annualised)

$1,800,000

$150k / month

Commissions

$144,000

6% of ACV

Outcome-based at risk

$360,000

15% of fees

Resource allocation

34 FTE · 46,900 hours
Account / workstreamFTEHoursSenior mixUtilization
Northwind — Brand Platform12.417,10026%94%
Northwind — Always-on Ops9.813,60014%88%
Northwind — Performance6.69,45019%91%
Shared / unbilled pool5.26,75028%61%
04

Leading indicators

Delivery complexity and cognitive load, side by side

These are the signals that move before revenue does. Each one is derived, not declared — the derivation sits under every number.

Workforce Intensity

high

78/100

Senior dependency + thinking-heavy mix + 4.2 iteration cycles

Coordination Drag

high

24% of hours

11,260 coordination hours ÷ 46,900 actual hours

Senior Involvement

moderate

17% of hours

7,980 senior hours on delivery vs 21% senior FTE

Scope Slippage

high

16% of hours

(46,900 actual − 39,400 on-scope) ÷ 46,900

Cognitive Load Index

high

63/100

Core 58 × 0.5 + Toxic 71 × 0.7 − Growth 22 × 0.25 + 10

Burnout Risk

high

68/100

Load 63 × 0.7 + Toxic 71 × 0.3

Cognitive load & burnout risk by team

TeamPeopleCoreToxicGrowthDaily loadBurnout risk
Creative & Strategy1161791671high
Delivery / PMO855741866high
Performance & Analytics957622955moderate
Client Partnership660662759moderate
05

The equation

Π = (M_discipline × R_ideal) − [C_baseline + L_shadow + (H_drag × W_scope)]

Every term is now populated from the layers above. Nothing is estimated by hand.

M_discipline

0.803

Management discipline — geometric mean of three sub-scores

Scope adherence0.84
Pricing integrity0.81
Boundary holding0.76

R_ideal

$2,950,000

Card-rate ideal revenue

C_baseline

$1,610,000

Visible loaded cost already on the P&L

L_shadow

$465,000

Shadow labor — 7,500 unbilled hours × $62 blended rate

H_drag

$630,658

Cognitive drag — velocity loss plus burnout churn

Velocity degradation$434,818
Burnout-driven churn$195,840

W_scope

0.620

Scope weight — $2.40M evaluated ÷ $3.87M portfolio

Resolution

(0.803 × $2,950,000) = $2,367,896

$1,610,000 + $465,000 + ($630,658 × 0.620) = $2,466,106

Reported profit

$790,000

32.9% margin on ACV

Behavioral profit Π

−$98,210

-4.1% true margin

Invisible gap

$888,210

Shadow labor + cognitive drag

Reported margin says this account earns $790,000. The Behavioral OS says it loses $98,210. The gap is $888,210 of shadow labor and cognitive drag that never reached the P&L.

Π across the forecast window — why the warning fired

Π today

−$98,210

Π forecast · +90 days

−$411,164

Movement

−$312,955

M_discipline

Pricing integrity slips 0.81 → 0.76 as scope drifts

−$144,550

L_shadow

Unscoped deliverables add ~1,900 unbilled hours

−$117,800

H_drag × W_scope

Senior concentration lifts churn probability 12% → 17%

−$50,605

Each signal on the warning card is one of these terms moving. The warning is a forecast produced by arithmetic — not a sentiment score.

Action order

Turn the warning into a decision

Three interventions are priced by recomputing Π. The senior-hours move is kept as an operational order until the sample contains named capacity and skill-fit data.

Modeled recovery plan

Reprice at renewal, cap coordination at 15% of hours, and protect two weekly deep-work blocks for the two leads trending into red-zone load.

End point: the existing 90-day warning window · denominator: $2.40M contract value · senior redistribution excluded from the financial total

Π recovery

+$499,943

+20.8 margin points

  1. 01

    Reprice at renewal

    Modeled

    Move realized rate from 0.81 to 0.92 of card rate.

    Pricing integrity: 0.81 → 0.92 · The engagement is invoiced at 81% of card rate while delivering 116% of planned hours.

    M_discipline Confirm the renewal rate before the Q3 review.

    +$102,672

    standalone Π effect

  2. 02

    Cap coordination at 15% of hours

    Modeled

    Convert 3 of 7 recurring status forums to async.

    Coordination: 24% → 15% · release 4,225 hours · 11,260 of 46,900 actual hours are currently coordination or meeting hours.

    M_discipline · L_shadow Review coordination share after the next reporting cycle.

    +$343,732

    standalone Π effect

  3. 03

    Protect 2 deep-work blocks / week

    Modeled

    Preserve two weekly deep-work blocks for the two leads trending into red-zone load.

    Toxic load: 71 → 58 · Toxic load averages 71/100 and no 90-minute deep-work window survives on 6 of 10 weekdays.

    H_drag Recheck toxic load and burnout risk at the next weekly review.

    +$49,992

    standalone Π effect

  4. 04

    Redistribute senior dependency

    Capacity check

    Shift 1,400 senior hours to mid-level delivery with a review gate.

    Workforce Intensity: 78 → ~66 · Senior allocation drifted from 35% to 51% over six weeks.

    H_drag · M_discipline Validate named mid-level capacity, skill fit and review burden before assigning the hours.

    Not priced

    missing capacity data

The displayed recovery is a deterministic scenario, not a promised quarter-close result. It uses only the existing sample targets and equation terms; no person-level allocation, role-rate or quality assumptions have been added.

Auto-generated insights

Root cause

Toxic load, not headcount, is eating the margin

Toxic load averages 71/100 across delivery — 24% of all logged hours are coordination, and no 90-minute deep-work window survives on 6 of 10 weekdays. That converts to $434,818 of velocity degradation before a single hour is written off.

Commercial

Pricing integrity at 0.81 caps the ceiling

The engagement is invoiced at 81% of card rate while delivering 116% of planned hours. Repricing to 0.92 on renewal recovers roughly $325,000 of ideal revenue without touching effort.

Concentration

Creative & Strategy carries the burnout risk

11 people sit at 71 daily load with 16 growth load. At a 12% exit probability this pod alone represents $63,360 of amortised replacement cost — and it holds the senior dependency the whole account runs on.

V1 mockup — logic sourced from the Headroom deterministic blueprint and the MarginMix risk model.

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