Organisations strive to achieve success and thrive in their respective industries. To achieve this, they must possess both the necessary capabilities and adequate capacity. While the terms “capability” and “capacity” may seem similar, they have distinct meanings and play crucial roles in the realms of project management, strategy, and overall organisational operations.

This article sheds light on the difference between capability and capacity from a team, department, or organisational perspective, their significance and how they contribute to organisational success.


When we talk about capabilities within an organisation, we are referring to the ability to perform certain tasks or activities. It encompasses having the essential tools, processes, and skilled personnel to carry out various functions effectively.

Imagine a barista who can expertly create a delicious cup of coffee. The barista’s capabilities include using a coffee machine, grinding coffee beans, making coffee, and frothing milk to perfection. These individual capabilities, when combined, form a cohesive set of skills that contribute to the overall success of the coffee shop.

At an organisational level, the capability of an organisation is the ability to develop specific capabilities that facilitate efficient and effective functionality throughout various departments within a company. For instance, a software development corporation relies on several key competencies such as expert-level software coding combined with quality assurance testing acumen, in addition to managerial and customer support skills, in order to achieve successful product delivery outcomes.

The human element is fundamental to capabilities. Skilled and knowledgeable individuals bring life to the capabilities of an organisation. They possess the expertise to utilise tools, implement processes, and drive the organisation toward success.

Capabilities encompass the tools, processes, and skilled personnel required to carry out various functions effectively.

It is important to note that:

  • Capability refers to the ability to perform specific tasks or activities effectively.
  • Capability encompasses having the necessary tools, processes, and skilled personnel.
  • Capability relates to components of project management, strategy, and organisational operations.
  • Capability involves the development, management, maintenance, and operations of various functions.
  • Enhancing capabilities increases the maturity of an organisation and its ability to deliver results.
  • Examples of capability components include tools (e.g., coffee machine), processes (e.g., grinding coffee beans, making coffee), and people (e.g., barista).


Capacity on the other hand relates to the organisation’s ability to meet its objectives and fulfil its responsibilities within a given timeframe.

It goes beyond the notion of simply having enough people and resources and delves into optimising existing resources, streamlining processes, and enhancing the proficiency of individuals and teams.

Here are a few ways to improve your organisation’s capacity;

Up-skilling the existing workforce

Investing in employee learning is an investment in the future of an organisation. By enhancing internal skills with bespoke training programs, teams retain greater capabilities for individual growth while boosting organisational output capacity at the same time. As a direct result of dedicated initiatives that promote skill acquisition through coursework or mentorship during operations, workers experience greater confidence through added responsibility and assimilate fresh ideas based on new knowledge gained about the latest industry trends.

Hiring skills or expertise lacking in the organisation

Organisations should adopt a critical lens that emphasises identifying skill gaps within the organisation, be they in technical areas or specific domains. This is key to strategically recruiting individuals with the required skills. This targeted method of hiring ensures that organisations are equipped with talent capable of handling both present and future demands, thus boosting organisational capacity.

Simplifying workflow processes

An organisation’s capacity is often bogged down by complex and inefficient workflows that ultimately hinder productivity. By analysing and streamlining processes to a simpler workflow system, organisations can eliminate bottlenecks, reduce redundancy, and improve overall operational efficiency. This optimisation of processes allows the organisation to accomplish more with the same resources, effectively building its capacity without the need to bring more people on board.

Use of advanced technology

Technology also plays a vital role in building organisational capacity. Embracing digital tools and automation can significantly enhance production capacity and reduce the burden on human resources. By automating repetitive tasks or implementing advanced software systems, organisations can free up time and resources, allowing employees to focus on higher-value activities. This technology-driven approach not only increases capacity but also drives innovation and keeps organisations competitive in a rapidly evolving marketplace.

Use of time management techniques

Organisations must prioritise tasks, set realistic deadlines, and allocate resources efficiently to ensure optimal production capacity. By adopting time management techniques, such as agile methodologies or project management frameworks, organisations can streamline workflows, reduce project delays, and improve overall performance. Efficient time management maximises the organisation’s capacity by enabling it to accomplish more within the same time frame.

It is important to note that:

  • Capacity relates to whether an organisation has enough resources, skills, or time to fulfil its objectives.
  • Capacity focuses on optimising existing resources and streamlining processes.
  • Capacity involves up-skilling employees, hiring individuals with lacking skills or simplifying processes to increase efficiency.
  • Building capacity ensures organisations can handle increased workloads without solely relying on adding more people.
  • Enhancing capacity involves maximising productivity and achieving more with the same resources.
  • Examples of capacity-building strategies include training programs, process optimisation, technology adoption, and effective time management.
  • Capacity building does not aim to overwhelm employees or compromise the quality of work.
  • Capacity building strives to create an environment where individuals and teams can thrive by eliminating unnecessary barriers and optimising resources.

Overall, while capabilities provide the necessary tools, processes, and skilled personnel, capacity acts as the fuel that drives organisational achievement. Striking a balance between capability and capacity is crucial for optimal performance and sustainable growth.

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