Gregory's Server@Tupp_ed This is just basic 'common sense' from a retention of knowledge and skills perspective. If everyone is working at 100% capacity all of the time, then there's no capacity left to properly train new staff when your more experienced employees leave. This leads to an inevitable degradation because new staff never gain all the knowledge they need. Rinse and repeat for a few cycles and your organisation is now in crisis because people no longer know how to do the basics properly.
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@Tupp_ed It also prevents your organisation from progressing. It becomes impossible to improve processes because no one has the time or energy to even think about making them better, never mind trialling, documenting and training people in newer, better ways of doing things. This is how you end up with people doing things just because that's "the way they've always been done" even when that way is completely wrong.