Are We Building Capacity or Capability?

In the often buzz-word intensive field of change management, the terms “capacity building” and “capability building” are often used interchangeably. That is unfortunate, because a more careful treatment of the terms can actually lead to some useful breakthroughs for organizations working through change.

Let’s take a closer look.

In the context of transformation, “capacity building” refers to an individual or organization’s ability to absorb change effectively. Daryl Conner offers a useful way to think about capacity through the notion of “change assimiliation points”. Each individual has a finite number of “assimilation points” say, hypothetically, 500 points. Each change costs a certain number of points – for example, a new boss might cost 100 assimilation points, an office move 200 points, and so on. Conner uses the analogy of points to illustrate the fundamental truth that individuals can only assimilate a certain amount of change before negative symptoms of overload emerge. These may include burnout, depression, or anxiety.

The goal, then, is to manage the pace of change at a speed that matches the individual’s rate of assimilation. By building resilience, individuals can renew and grow their ability to assimilate change.

At an organizational level, understanding capacity building is vital to an organization’s ability to implement change effectively. Too often, the pace and scope of changes outpace the organization’s ability to absorb it – like pouring a jug of water on a sponge that’s already totally saturated. In such cases, it is important to identify the capacity issue, and forge strategies to address it. This might include:

  • Time: providing employees with more time to complete a task in order to allow for assimilation.
  • Resourcing: bringing in additional resources to liberate employees from their day-to-day tasks so that they can better absorb the change.
  • Understanding: providing employees with psychological safety by demonstrating understanding that change is difficult, and that tasks may take longer, or may have a higher error rate than usual.
  • Energy: Given that periods of intensive change are depleting, employees may need encouragement to manage their energy, not just their time.

Capacity, then, is a finite resource but is renewable under certain deliberate conditions.

On the other hand, “capability building” refers to the skills and knowledge required for a particular task. An organization may have the capacity to change, but lack certain key capabilities.

A common example of a gap in capability is in managers’ ability to effectively lead change. As Henry Mintzberg has documented extensively, managers are often promoted to their roles as a result of technical ability and seniority, but may not have been trained in the craft of management, including change leadership. This can set up a lose-lose-lose situation: the manager feels under-equipped, her staff are under-led, and the organization is under-served.

The solution to gaps in capability is to provide appropriate training and coaching, particularly in the specialized area of change leadership. This process should begin with foundational training, which can then be augmented through coaching.

There is an interesting interplay between the concepts of change capacity and capability building. In many cases, building capability by increasing a team’s knowledge and skills can actually help expand capacity. This is, in essence, the idea of working smarter, not harder – a wise path as organizations increasingly find that working through change is the new business as usual.