Don’t prioritize capability over capacity

The future workplace demands capacity, not capability. Do you know the difference?

Guess jellybeansThe word “capable” comes from the Latin word capabilis, which means to be “able to grasp or hold”; one has to be able to grasp or hold, metaphorically or physically, a particular, defined object. The word “capacity”, by contrast, is much more capacious. It stems from the Latin word capacitatem, which means “breadth, able to hold much.”

You develop capability in preparation for a known—an essay rubric, a military formation, a fitness test, or a familiar business problem. You develop capacity in anticipation of the unknown. There is no capacity without an underlying foundation of capabilities. Yet without capacity, there is a limit to what you or anyone can accomplish because capacity is what enables you to adapt to changing circumstances, to uncertainty, and to the unknown, whether in a battlefield, classroom, shop floor, or boardroom.

The same distinction holds true when talking about organizations. Capability is defined in the organizational literature as an ability to repeatedly carry out a particular process or task that adds value. Capacity, on the other hand, is the combination of capabilities, mindsets, and much more that enable an organizational system to create value.

At the heart of the distinction between capability and capacity is the location of power. To develop people’s capabilities is to develop them against a known and defined standard, such as a manual, plan or procedure. The standard, developed by experts, holds the power; people are merely executors of the standard. The answers are already determined; one just has to develop the capability to follow them to a T.

In dealing with the unknown, however, there is no one strategy, standard or manual that can adequately predict and anticipate the future. By definition, there is no “expert” who knows what to do under all circumstances, because the circumstances themselves are unknown. In such a scenario, all leaders can do is develop people’s capacity so that they can ask the right questions that will enable them to generate the right answers, ideas, and plans, as they encounter each new challenge. It is the people who hold the power, not the expert-created standards. When business leaders talk about “adapting” to the unknown future, they are typically doing so in terms of strategy. Their crucial misstep is that they forget that it is people on the ground who execute strategy and who therefore need to develop the capacity to be creative and adaptive.

A key implication of this is that leadership is not just about the experienced leading the inexperienced. Sometimes more experience only translates into more capabilities, not more capacity. In fact, someone’s experience can even become a liability, as one can struggle to break out of the box of traditional standards when dealing with the unprecedented.

Capabilities are important, but we often fall into the trap of prioritizing capability over capacity with devastating consequences. This is visibly apparent in how we hire and promote. A recent survey of thousands of managers published in the Harvard Business Review shows that when companies promote talent, they place “much less value on a manager’s ability to adapt to changing circumstances … than on whether she has hit her numbers in the past.”   This priority is surprising considering how often we hear leaders declare that they want people who can adapt to their ever-changing industry.

What data reveals is that when we promote or hire, despite our rhetoric, we tend to vet candidates by seeing if they meet a standard checklist of credentials or experiences, letting unconventional talent slip through the cracks. It is a risk-minimizing move, but it also lowers the ceiling of an organization’s capacity for innovation and adaptation by missing out on key talent.

If companies are prioritizing proven capabilities over capacity in how they hire and train, it is little wonder that nearly one-third of managers cite “difficulties adapting to changing market circumstances” as their company’s greatest challenge. We get the importance of adapting our strategy, but we don’t think about the adaptability of the people who create and execute the strategy — we do not take it all the way.

When we prioritize capability over capacity, we miss out on key opportunities—talented people and strategic innovations. At best, this mindset creates a mediocre organization where people will not do any more than what they are expressly told to do, partly because they are afraid of trying and failing.

At its worst, a capability-based mindset can create a fearful, obedient environment that can lead to real mistakes, abuses, and disasters. When people are treated not as owners of their development, but as passive executors of seemingly arbitrary standards, then their mindset shifts from proactive initiative to fearful risk-aversion. This change in thinking stifles innovation and creates an environment where one tries to obey all the rules, living in perpetual fear of being wrong, or messing up.

Given the clear importance of developing capacity, what exactly does that look like and entail? The truth is that it will initially make us very uncomfortable because it goes against what most of our systems require. There is no “how to” or “step by step” implementation to follow, because you are dealing with people, but there are some basic principles and ideals that can put you on the right path. The good news is that when you get it right, everything should naturally flow because a capacity-based development model taps into something that is intrinsic to all humans: a desire to have a full sense of ownership over one’s future.

Adapted from chapter 1 of the book J.C. is working on with Sarah Ngu, titled A Light in the Darkness: Leadership Development for the Unknown.

Contact J.C. if you want to learn more.