How are you preparing your company now and for what’s to come in the future? Are your teams and business ready and able to respond to bigger challenges when they come? Capacity building strengthens your business and better prepares you for the future. It enables you to build, scale and grow with a strong foundation.
Capacity is shaped by adapting to and reacting to external factors and people, but it is not something external — it is internal to people, organizations and groups or systems of organizations. You are essentially shaping your company to adapt and react to external factors and market conditions.
What is Capacity Building?
Capacity building ensures longevity. Capacity building is really the process where people, organizations, communities and society really unleash, strengthen, create, adapt and maintain capacity over time. It brings your company to the next level of operational, programmatic, financial, or organizational maturity.
- Develops an organization’s strength and sustainability in order to serve current and future clients
- Is an investment in the effectiveness and efficiency for the future business state
- Is also referred to as Capacity Development because you are essentially building and evolving your business
- Is the ability of an organization and its individuals to obtain, improve, develop skills, tools, knowledge, equipment and other resources to competently do their jobs
- Involves strategic planning, accountability, transparency so all those involved are responsible and direction is clear and visible
- Involves internal change management within the company, involving its people and systems
- Focuses on your company mission, and your ability to thrive- not simply survive
Example: Imagine a food bank that improves its inventory management system so it can deliver more food, more quickly, to more people. The food bank boosted its performance by enhancing its internal management. That is capacity building in action.
How Does Capacity Building Strengthen Your Business?
The benefits of capacity building include:
- Organizational Structure
- Management and Governance
- Staff Capacity
Symptoms of Poor Capacity Building
- Outdated and old equipment
- Poor staff development or training
- Lack of organizational stability
- Owner-reliant business (not system reliant)
- Bottlenecking at the leadership/management level
- Poor communication between leadership and staff
Without capacity building, you risk focusing all your energy and attention on providing services and expanding projects. You can become too focused on just completing projects to address short-term problems.
A lack of capacity building will lead to organizational instability and a weak business foundation. You may see a breakdown in communication between leadership and staff, a drift from your mission, old systems and processes, and outdated IT and equipment.
Who is Involved in Capacity Building?
- Board (non-profits, etc.)
- Outside Consultants
- Strategic Partners
How to Strengthen Your Business Through Capacity Building
Capacity building is a long-term commitment. It is ongoing- you are assessing your current state for your future state. It is not a temporary project to address temporary situations
- Collaboration and Co-Create– think of solutions with stakeholders within your company and with strategic partners. You will be shocked to see the ideas and engagement and buy-in you gain from staff if you involve them. This is essential for cultivating a positive and productive work culture and improving performance.
- Network– tap into your network of support, including strategic partners, fractional leadership, consultants and technical assistance providers. It is critical to have an objective fresh set of eyes coming in to assess and provide recommendations and assistance.
- Support Technical & Adaptive Capabilities– share information (not just technical capabilities) but ways in which you have or can collaborate, influence and share in leadership growth and effectiveness. You can create opportunities such as these
- Identify Funding Sources (if needed)
- Keep Timelines & Goals Realistic
Goals of Capacity Building
- Bring the organization to the next level of maturity so it is more effective and efficient to function in a desired future state to serve your clients or customers.
- Bring your business to the next level of operational, programmatic, financial, or organizational maturity
- Strategically plan & transform your business
- Be realistic & practical to get from the current state to desired future state
- Build for sustainability and growth
- Make your infrastructure better and more solid than temporary projects.
- Be more proactive than reactive
- Get your business running like a well-oiled machine
- Invest in your people- instill good management and leadership
- As a leader, focus on higher-level decisions
Capacity building begins with leadership and business owners. It can also include board members, who might offer ideas for innovation and opportunities for expansion. Involving staff in capacity building is also key. Group learning improves information retention and brings the organization into capacity-building as a whole.
Outside expertise may play a role here too. While it may seem counterintuitive to pay an operational expert and a Fractional COO for input on the “back office” operations, the return on investment (ROI) may include greater efficiencies, more precisely targeted services, and more capable, knowledgeable staff.
Written by Sasha Lalite
Presented by lastyleleaders.com