How Capacity Building Can Shock-Proof Your Organization

If you want your organization to be shock-proof and resilient, you need to start capacity building. Our advice will set you off in the right direction.
Mae Angeline

Is there a sector that isn't feeling capacity pressure at the moment? Global events in recent years have seen the operational environment become increasingly complex and challenging. Demand for goods and services has increased, while conventional funding streams and supply chains have been squeezed.

That said, new technologies are being developed to respond to this pressure, creating avenues for organizations navigate the long-term, ongoing process of capacity building. We’ll look at the whole concept in more detail in this article.

Capacity building: what is it, and why is it important?

Capacity building is the process of building an organization’s strength and resilience, which are vital for its health and continuity. Capacity is a measure of a business’s ability to fulfill its stated mission and involves a mix of strong management practices and regular assessment techniques (preferably digital) to ensure strong foundations.

The United Nations defines capacity-building as a process whereby an organization strengthens its skills, instincts, abilities, techniques, and resources to thrive in a rapidly-changing civil society. This means that capacity building starts from within the organization. You are responsible for transforming your business into one that can keep up with all the changes in technology and the world.

"Capacity building" as a concept often gets brought up in the nonprofit sector, and no wonder. In our complex, post-pandemic world, nonprofit organizations are increasingly finding themselves trying to bridge the gap, needing to do more with less.

However, as much as it is vital for nonprofits, the concept of capacity building is also essential for business. And business world can teach nonprofits how essential it is to focus on having a strong infrastructure and not just on projects alone. 

At the end of the day, capacity planning and building is essential for sustainability in any industry. Once an organization has built up capacity reserves in every form, it can then focus on projects that align with its mission, rather than merely surviving from one project to the next.

You may not have realized it, but you are probably already applying capacity-building programs and initiatives. For instance, the mere fact that you try to improve management practices is already a step towards building capacity and resilience. However, are you doing enough, and what would happen if you didn't apply this process to your business in other areas?

What would happen if there was no capacity building?

In essence, capacity building helps us determine which processes to focus on and which to let go of. Without it, you may risk your resources and waste your efforts focusing on your operations without a strong foundation. This can result in instability within your organization, leading to negative results such as poor communication within the organizational hierarchy.

In short, a lack of capacity-building initiatives leads to profit losses, instability, and potential failure when difficult times such as recessions arise. 

Building capacity strategically will help your organization to stay afloat and adapt to your industry's technological and social advances. It enables you to map out your company's developmental path by identifying the priorities, gaps, and needs to be addressed. Without capacity development strategies, there is little opportunity to create developmental goals, indicators for benchmarking and assessment, and enhancements for operations and support programs.

Where should you focus capacity building activities?

The decision of how to start capacity building will depend on the type of capacity you want to develop, and where in the organization you need to develop it.

Types of capacity

There are four types of capacity that your organization relies on. While all of them are important, your decision on what type of capacity to develop depends on what is limiting your progress and growth.

  • Leadership capacity. This refers to your leaders' actions to keep the company on track with its vision, including established decision-making, innovating operations, and sustaining internal leadership.
  • Resiliency capacity. This is the organization's capacity to face changes and respond to challenges. It includes the capacity of individuals within your organization to cope, adapt, and transform in the face of challenges.  
  • Management capacity. Management capacity ensures all resources are employed efficiently. It deals with overall human resource management, as well as appropriate financial management to handle the organization's revenues, assets, and expenditures.
  • Technical capacity. This refers to the know-how, skills, tools, and facilities necessary to produce the desired output or deliverable. These depend on your industry, and include marketing and fundraising skills, technology and corresponding digital skills, and program design and implementation.

Selecting the focus

There are three C's that offer a useful framework when it comes to pitching your organizational capacity building.  

  • Competencies. An organization can only attain the level of its combined employees, volunteers and board. Their competencies are the sets of skills each individual in the business or nonprofit has. Competencies also include the effort and energy they allocate to completing specific tasks. When you want to direct capacity building toward competencies, you need to focus on what is needed from that individual. Do they need to use an application or equipment, and if so, do they have the right training or experience? Do you need to initiate training programs or refresher sessions? 
  • Capabilities. Rather than individual abilities, capabilities refer to the collective ability of the group to complete activities and tasks at an acceptable level. Assessing capabilities identifies how effective teams are while working on an assignment. It is important to gather metrics on their proficiency in performing a set of skills to achieve a set of deliverables or their project goal.
  • Capacity. This is the highest form of ability in capacity building. Capacity refers to the overall ability of your organization to create value for community members or customers. A team’s capacity involves functioning within a given timeframe, and with resilience if change is introduced. Do you need to hire more staff? Do you need to increase your budget? Do you need to extend the time allowed for task completion? Remember, employees or volunteers are an organization’s key success determinant, so ensuring your workforce are not stretched beyond their limits is critical.  

Other factors to building capacity

It’s important to take context into account when formulating a capacity-building strategy. Here are some other factors that influence how effective capacity building will be.

  • Organizational infrastructure. Your business cannot operate without a strong and adequate infrastructure at the organizational level. This includes facilities in your offices and work locations, equipment for your operations and administrative functions, and other workplace functions.
  • Good governance and management. A business can only function properly when the right people manage it. That is why you need to assess your company's organizational structure and the authority that comes with it. You must look at your business's board members and executives and evaluate their leadership. Do their governance and managerial skills have a positive impact on the industry, community, and customers? Are the board members and executives investing in strategic plans and programs to stay true to the business/nonprofit mission or not? In capacity building, it is crucial to bring everyone's expertise to light. Knowing what your people do best will increase the effectiveness and efficiency of your business operations and functions. This also makes capacity management and other managerial duties easier. You can also satisfy and take on more clients, knowing that all managers in your business work together to provide quality products or services.
  • Availability of support. Support and influence aren’t just related to finances and fundraising techniques, but also to challenges in representation and opportunity. For example, are the district managers and provincial leaders supporting your objectives? Is everybody well-represented, or are certain voices heard above the others? Are there equal benefits and opportunities for development? Capacity building is most effective when everyone has access to this kind of support.

Examples of capacity building initiatives

As capacity building is so broad, you’ve probably already implemented it on some level. Here we look at some concrete examples of specific capacity building activities.

Strategic planning

Organizations need a clear vision and mission to keep them grounded in their activities. And with strategic planning, you can make sure your efforts are aligned with the vision for what you want to achieve. This strengthens leadership and resilience capacity, because it helps unite everyone on the same page, working towards common goals.

To ensure the vision and mission effectively represent and unite the organization, it’s necessary to undertake a process of outlining priorities and documenting them to form a strategic plan. After that, you can lay out the sequence of the goals and decide in what order they should be pursued.

Networking

Capacity building in the past largely focused on enhancing the skills of individuals within the organization. Today, we recognize that a network approach to capacity building is more effective, and can help build technical capacity and resilience.

Networking for capacity development involves widening your network with other organizations in the same field as you or who share your common values. Having a network approach to capacity building enables you to leverage connections and take advantage of available resources within the network, such as the knowledge, skills, and support necessary for a strong foundation.

For example, a nonprofit capacity building team could leverage connections with similar organizations in the area to deliver a joint education event for communities, with both teams achieving results towards their objectives whilst sharing venue and transportation costs.

Training and leadership development

In tandem with networking, you must promote continuous learning and professional growth for your biggest asset: your people. You should be able to develop their expertise, making sure they reach their potential. Mentorship and consultation programs also offer one-on-one guidance for monitoring personal progress and improving knowledge and skills. 

For example, you can hold training and seminars or provide your staff with access to expert advice and relevant sources. In the current pandemic situation, organizations have proven they can still develop their capacity by hosting virtual conferences, webinars, and even hybrid training.

Continuous development does not end with the people involved in operations: it should be addressed at an institutional level, including those in the leadership department. When everyone within the organization has access to lifelong learning, your organization becomes more resilient with a greater capacity for innovation and growth.

Smoothing out inefficiencies in the system

Sometimes, the problem is not with your people, but the system itself. A great way to initiate capacity building in your business is to assess your systems, identify any inefficiencies, and fix them. After all, these small inefficiencies can cause you huge losses over time.

Increasing performance in your systems may include the following:

  • Eliminating time-consuming and unnecessary tasks
  • Creating templates for frequently used documents such as invoices and receipts
  • Developing a feedback system with your employees to identify what needs improvement
  • Giving the task to those who are most qualified
  • Assessing whether your business goals and progress match
  • Documenting essential tasks and processes to help new employees become productive from their first day
  • Providing opportunities for networking and collaboration
  • Instituting conflict resolution and peer learning
  • Initiating an effective staffing process from hiring and onboarding to development and retention

What can help you build organizational capacity?

Organizational capacity is built by optimizing your systems, processes, and human resources. As we have seen, this starts with a capacity assessment: taking stock of the current situation, and identifying priority areas for improvement.

Using the right tools and capacity planning software can help make capacity management easier. Runn gives you a bird’s eye view of the skills of your workforce, the capacity of your resources, and the trends in their utilization. With this information, you can identify areas for capacity building effort that will make your projects more efficient.

Key takeaway

Recent years have shown us the importance of sustainable development in the operations of businesses and nonprofit organizations. Capacity building includes whatever is necessary to bring an organization to the next level of operational, financial, and organizational stability, so it can efficiently advance its mission and survive through trying times.

Capacity building is an investment, and as with any investment it's important that it's targeted so it can deliver results. The analytic insights and scalability offered by resource management software help you target your capacity building efforts to be more efficient and effective.

Here at Runn, we help you manage your team's capacity and ensure your organization is optimized. Learn more by booking a demo with us today!

Enjoy the post? Sign-up below for the latest strategies, stories and product updates from the team at Runn.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

You might also like

Try Runn on a single project, a whole team, or run your entire business

Try for free
14 day trial. No credit card required.
Smart resource and capacity planning