Capability building is not Capacity Building

In the intensive buzz-world of change management, there has been a constant confusion over  ‘capability building’ and ‘capacity building’. For the very reason,  both are often used interchangeably. It is due to this lacuna in our usage and understanding,  major breakthrough in organizational developments and changes at are sea, and there have been lots of man power and resource wastage.

It is important for us to set right our understanding on these both terms, for the very reason , we don’t want to be running our organizations/companies on confused and compromised strategic paths.

What is Capacity building

According to Wikipedia, Capacity Building is the improvement in an individual or organizational FACILITY ‘to produce, perform or deploy’.  Let us underline the word  ‘Facility’ here.

Since the 1950s, this term is used by communities, organizations, Govt or Non-Govt Organizations as part of their socio economic developmental plans. Over a period of time, the International Communities such as UN used this term as part of their sustainable developmental goals.

According to Organization for Economic Cooperation and Development OECD “Capacity development is understood as the process whereby people, organizations and society as a whole unleash, strengthen, create, adapt and maintain capacity over time.

Thus Capacity Building has become a commonly used term by many business organizations as part of their business performance goals and managerial improvement plans

What does Capacity Building do

Today it is highly important for us to set right our understanding on  capacity building which is often confused with building capability of the organization/company.

In a purely business understanding, ‘Capacity refers to resources and volumes of a company or an organization’. Capacity building asks basic questions such as ‘Do we have enough resources?, do we have supplies to meet the demand?’   it focusses on company’s day today governance. 

It simply refers to facility management and requirement practises. Its activities include constant evaluation of organizational resources such as money, man power and machine, and organizational readiness for change.  They refer to the systems, structures, manpower to manage a facility.

What is Capability Building

On the other hand, I would go on to say that capability refers to the FACULTY of Skill and knowledge required to do a particular task or a project. I would wish to underline the word ‘faculty’.  We may have resources, but do we have the capability to execute the task in  an efficient manner to produce a desirable and planned outcome (not output) on a sustainable and progressive manner.  Capability building simply does that.  While capacity building focusses on facility, capability focusses on faculty.

What does Capability building do

Capability building is the inner strategic mechanism that aligns the vision and mission of the company to the times and beyond.

In other words, it builds the inner domain knowledge of the organization/company to the level of greater transformation and change, through innovative means, by aligning skills, behaviour and knowledge. It is the spark in the engine. Without which, the future of the company will be at stake.

It transforms and continues the process of transformation by aligning the vision of the company with its outcome. 

Differentiating between the Two

While capacity building focuses on organizational building, capability building focuses on organizational transformation. The following distinctions may throw some light on the difference between capacity building and capability building

One cannot perform without the other

While both vary in nature and kind, both have their specific functions to perform. While they focus on performing their role in their own way, they cannot function in isolation. They always perform their functions in mutual dependence.

The irony is, since most companies either dilute the understanding of the both or mistake one for the other,  the dichotomy still remains. Companies need to wake up to this factor. Capacity building without capability building is waste of resources, manpower and money. Capability building without Capacity building is a meaningless endeavour. 

Capability is the core and invisible element of the company, while capacity is the platform that makes the invisible into a visible reality.

Elias Moses is a Senior Business Strategist, Consultant, Researcher, Corporate and Leadership Trainer, Orator, Columnist and an Entrepreneur. He is  the Founder and Managing Director of  a growing reality firm in south India. He is also the founder of Managing Next, an Online portal for knowledge share and consulting.

 The author can be contacted@ 

email: elias@managingnext.in,  linkedin:  www.linkedin.com/in/eliasmoses