Capacity building

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The terms 'capacity building' or 'capacity development' describe a range of activities you might use to expand your organisation or change direction. The concept is commonly used for overseas development in NGOs, but the principles, ideas and practice relate to any non profit organisation.

The United Nations has defined capacity as 'the ability of individuals, institutions, and societies to perform functions, solve problems and set and achieve objectives in a sustainable manner.' That is the basis of any well-functioning organisation.

Capacity building remains one of the most challenging functions of development. It means you need to invest time and energy to assess the following areas.

Fundamentals of the organisation

The underlying framework of any organisation holds the rationale for its existence. This framework is often written as a mission statement, aims, or 'why we are here'. A useful way to think about this is to define your ‘primary task’:

• Why are we here, what do we add that no-one else does?
• What do we think is the main function of our organisation?

A clear definition of your primary task can help your board, staff and stakeholders to identify with the organisation .

Strategy and direction

A clearly-defined aim leads to a clear strategy, or more simply , the activities that the organisations must deliver to achieve its aim. The strategy provides a focus for decision making and a benchmark for judging whether a project or new idea aligns with your strategy. Many organisations lose their direction through working on new ideas that aren't aligned to their strategy.

Leadership capability  

Leadership is the ability to guide, inspire and take people with you to achieve the aims of your organisation. Good leaders focus and motivate a group to enable them to achieve their aims. It also involves being accountable and responsible for the whole organisation.

A  good leader should provide continuity and momentum, whilst testing the environment that might instigate changes of direction. Ideally, a leader should be a few steps ahead of their team, but not too far for the team to be able to understand and follow them.

There is a whole industry of leadership gurus, management  schools and training devoted to help people develop their leadership skills. However, not all good managers can become leaders, and not all leaders can be good managers. This should not be seen as a problem, since different organisations require different leadership skills, styles and behaviours, and requirements also change over time.

Actions for developing leadership capability

• Start a feedback process with your team to find out what they appreciate in the leadership function and what needs adjusting. You can do this yourself or use an external change management consultant.
• It can sometimes be helpful to use psychometric data collection processes that are run by licensed psychologists. Contact the British Psychological Society to find a qualified practitioner.
• Find training that meets your specific needs, whether it's academic learning, skills based training or peer group support. ACEVO events and courses are tailored to the needs of third sector leaders as are those given by the Directory of Social Change (DSC).

Talent management 

If talented staff (and volunteers) feel unappreciated, they will move to another job, taking their skills and knowledge capital away from your organisation. You will not just lose talent - you will also lose time, energy and productivity while you recruit and develop new people.

Research shows that talent can be nurtured by increasing the   level of responsibility, degree of autonomy and span of control. All of these factors contribute to employee satisfaction (Harvard Business review Dec 2008), and satisfied employees tend to be loyal and contribute more to their jobs.

For more information, see Talent and succession management.

Actions for talent management

Asking the following questions will help you to build organisational capacity, retain vital staff and develop a succession plan for the future:

• Do you know the skills and experience of your staff?
• Have you audited the range of skills that are in the organisation, separately from the job skills already in use?
• Do you know about the career aspirations and ambition of your talented managers? 
• Have you set up mentoring, shadowing and schemes that encourage people to grow and develop?
• Does your culture support new learning?
• Do you know who is ready for more responsibility and promotion?

All of these questions relate to retention and motivation.

Human resources

HR is increasingly seen as the back-bone of an organisation. In addition to recruitment and retention, HR magazine lists the following as likely responsibilities of contemporary HR directors:

• corporate governance
• internal communications
• engagement 
• corporate social responsibility
• development of the internal brand 
• talent management
• succession planning
• coaching
• training
• rewards and benefits.

A professional HR function will not only recruit, train, appraise and reward your staff, they will also use management information systems (MIS) and knowledge of employment law to advise management on the health and efficiency of the organisation.

Actions around developing Human Resources

It is essential to invest in HR as your organisation grows and needs expert advice.

• You can recruit HR professionals with qualifications from the Chartered Institute of Personnel and Development (CIPD) - the professional body for those involved in the management and development of people. 
• Read the CIPD magazine People Management and the Personnel Today website - both are good sources of information on the HR profession.

The culture of an organisation

See An organisation's culture.

Capacity building exercises

As you think about building your organisation's capacity, these tools and methods can help you understand where you need to grow.

Audit your organisation

This is a complete look at the whole organisation, from strategy to delivery. It can be done in good times, when you feel established, or in difficult times when the organisation is struggling.

You can do it as an internal exercise, with the support of your HR function, or ask an external organisational development or change consultant to guide you through the process. You may want to focus on one area or function, which allows the rest of the organisation to continue the work. Either way, you will gain invaluable data about directions for change,

Final pointers on building capacity

Once you understand your organisation and how it needs to build capacity, then you can pull plans together (and perhaps seek funding) to develop it.

Funders are increasingly aware that voluntary and community organisations need support to develop their capacity as well as their services and campaigns. 

Useful links

• Capacity Builders
• Collaborative working (NCVO)
• Effective capacity building in nonprofit organisations (VPP)
• Association of Progressive Communicators - includes training materials 
• INTRAC (International NGO Training & Research Centre): explores policy issues and aims to strengthening management and organisational effectiveness in NGOs.

Further reading

• Leading Corporate Change: How the world's foremost companies are launching revolutionary change, Charles J Fombrun (McGraw Hill, 1994) ISBN 0-07-021471 - covers strategy, mobilising for change , reshaping cultures and structures.
• New Leadership for Women and Men: Building an Inclusive Organization, Michael Simmons (Gower, 1996) ISBN 0-566-0747-5 - focuses on building an inclusive organisation, power and equality issues.
• Diagnosing the System for Organizations, Stafford Beer (John Wiley & Sons, 1985) ISBN 0471906751 - includes ideas, pictures, tools and suggestions.
• Capacity Building For NGOs: Making it Work, Rick James and John Hailey (INTRAC, 2007) ISBN 978-1-905240-16-6 - about what works in practice.

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