As organizations set their strategies for the future, a common question is: How we can do more (or even the same) with less? My own clients are asking me something similar: How can we achieve our goals without depleting our resources? What they are really asking about is capacity building.
Leaders want to know if they have the capacity to execute well.
It’s so important to be thinking about capacity as a way to deliver successfully. Organization that include an assessment of their capacity when setting strategy are more likely to develop strength and capability with an eye toward sustainability.
In order to support your goals — whether they're growth, mission impact or scale goals — you need to make sure you have a strong foundation on which to build.
A common trap is to pursue the next shiny object without considering the capacity building that will be necessary to deliver and support that effort. When you neglect the foundation that allows you to deliver, your organization can become unstable and insolvent.
Why is it important to focus on capacity building while developing strategy?
One way to set up your strategy for success is to develop a pragmatic strategy that is informed by data. Most organizations gather relevant data at the beginning of the process to help them understand the current situation and future goals. However, it’s just as important to circle back to data as you finalize your strategy. You need to understand your capacity strengths and gaps in order to have solid execution. As you form your strategy, think about the capacity you will need to support implementation related to your business model, management and infrastructure. This approach will give you the data required to secure resources, capacity and capability. Without considering these needs, organizations can struggle to deliver, disappoint customers and fail to achieve goals.
Assessing capacity allows an organization to budget more intelligently and make wiser investment decisions. Understanding your business model in terms of your strategy clearly shows the ROI of your decisions and of the resources you have to invest. Nothing is worse than starting to execute on your strategy and having to stop or significantly scale back before you reach break-even.
Evaluating your manager's and staff's capabilities helps ensure you have the right blend of knowledge, skills and experience on your team. As you set strategy and direction, compare your plan to your people's capabilities. If there is alignment, great. If not, it’s time to decide how to address the gaps through training, hiring or even adjusting your plans.
In the past, organizations may have been able to execute on their strategy and build capacity in parallel. Not anymore. A smart organization will include a capacity assessment during the strategy formation phase so that the plan is rooted in reality and supported for success.
