How Does Capacity Development Help Scale your Business?

Along with leadership development, other capacity building activities include strategic planning, creation of new roles within the company, organisational development and networking opportunities

As the new financial year is about to approach, most of the entrepreneurs are making strategies to move ahead, to grow their businesses further. This is that time of the year, when most of them are busy thinking how to scale up their companies, especially after the pandemic catastrophic. You surely have a big, successful business. But then do you want to stop there? Are you not looking for ways to grow it further? And if you are, then congratulations you are on the right track! So, now fasten your seat belt and get ready for the next challenge. The challenge to scale up your business through capacity development. Capacity development is needed even if you are managing to make a great deal of profit. With the changing time, you and your business need to do things differently to stay afloat in the game. 

Scalability is about capacity and capability. Does your business have the capacity to grow? Will your business systems, infrastructure and team be able to accommodate growth? Soon or later these questions are going to haunt you. The growth can cause your company to stagger. This can happen due to confusion, orders falling through the cracks, insufficient staff, lack of communication, not enough manufacturing or also can be due to delivery capacity. The manual processes that you are following is fine but then that won’t let you move fast enough. And then out of desperation, you might either be putting out fires or desperately trying to keep your head above the water. Whatever be the way, either would be stressful for you and your business!

Scaling up a business means setting the stage to enable and support growth in your company. It means having the ability to grow without being hindered. Apart from planning, funding, the right systems, processes, technology, partners, it requires capacity development. Capacity development is one of the most important processes in scaling up a business. Capacity development is the process through which individuals, organisations and societies obtain, strengthen and maintain the capabilities to set and achieve their own development goals over time.


Capacity building involves several strategies that are intended to make your business more adaptive and approachable so that it can be more successful in today’s changing conditions.

The Right Approach? 

Capacity building, also referred to as capacity development, is a process that is used by both businesses and non-profit companies to help grow your firms and their employee’s bandwidth. Capacity building involves several strategies that are intended to make your business more adaptive and approachable so that it can be more successful in today’s changing conditions. There are plenty of capacity building activities and approaches that you can use to achieve this goal.

Capacity is generally believed as the ability to see, understand and do. That is the reason when you are building capacity at your business, you are making it more fluid and agile. And this in turn will make your business much more effective. There are various ways you can accomplish this. Most of the companies are focusing on human resource capacity building, as humans always have the potential to grow. There are many different ways you can improve the capacity of your employees, including providing them with greater access to resources, training programmes, consultations, expert advice and coordinating group efforts. 

Simultaneously, you can also focus on leadership development since leaders have a role that involves making changes, which lead to progress. Apart from this, other capacity building activities include strategic planning, the creation of new roles within the company, organisational development, and networking opportunities. When you are determining the right route to go forward, then you need to consider your access to consultants and capacity builders. This also includes your organisational readiness and resources such as equipment, money, facilities, expertise and time. Let’s discuss these capacity building activities in detail. 

Capacity Building Through Leadership

All businesses have the capacity to grow. This is the universal truth and it comes down to one thing — all humans can grow. Thus, by developing human capacity, you can develop your business. This relates to all aspects of your business. So, let’s start with capacity building through leadership. A person with a rich experience can recognise opportunities within the company as a large. And this doesn’t stop here, but continues in regards to employees that could prove to be an added benefit to the business.

A solid leadership always recognises what an organisation needs to grow. According to them, the fresh ideas and new people can be the key to this growth. Leaders truly believe that change is the only constant thing. They realise that the only way to explore new markets and move ahead is by making new changes. You can’t provide higher quality to your customers or explore new products and services if your business stays on the same track. This is something that is often taught in leadership development programmes, as a lot of leaders make the same mistake of managing instead of leading. This is what managers are for; to manage stability and predictability. When it comes to capacity building, in particular, it is not just the leaders’ responsibility to make changes so that an organisation can grow. It is the job of everyone. Leaders need to determine the individuals with growth potential in their business. And they need to engross and empower them, putting them in a position where they can contribute to building capacity. You will be stunned by how much of a positive impact this will have on your business and your capacity building strategy.

Developing Human Resources Skills

Even if you don’t work in human resources, the skills in this line of work are essential for all sorts of business roles. Managerial positions need human resource skills, when you are running your own business. Of the many skills that are needed to get a job in human resources, a few of them will help you with capacity building. This includes conflict management, communication, decision making, keeping things organised, and ethics.

As you can see, human resource talents are the most desired skills in any business. A business without communication skills, proper conflict management, and the lack of decision-making ability cannot succeed or survive.

Overcoming Organisational Challenges

In order to manage a business in a proper way, you need to increase the organisational development in your organisation. This type of development works to expand the effectiveness of your team. And this can be done by giving them the knowledge they need in order to perform to their best ability. Organisational development is an important part of the human resources strategy. Business structure keeps small businesses, and corporations focused for a change and ensures performance is at its peak.

An organisation’s capacity building strategy helps them identify and stop the hurdles and challenges that are getting in the way of their progress. Apart from that, a capacity building strategy can also help an organisation boost its strengths and help in achieving its goals. This is especially important in companies, communities, and even government departments.

It is important that the capacity building is driven by the demands of the team and their stakeholders. Without their buy-in, it would be hard to act on the changes that need to be made. Once the key decision-makers are involved, then it is the time to start looking at the organisation with a system-wide view to see how best to approach. One way to approach capacity building is by connecting relevant individuals and teams with each other. It also helps in establishing their own connections and partnerships, in case of both formal and informal. This helps in bringing better cohesion to the group at large. Training is also essential during capacity building since the team would need additional support and new skills to help serve the new strategies and goals they have to fulfil. After all, their previously existing processes and skills were not enough to help them reach their intended goals, and business challenges solved with IT involvement tend to be overcome more efficiently. 


A business without communication skills, proper conflict management, and the lack of decision-making ability cannot succeed or survive.

Capacity Building For Small Businesses

Small businesses can utilise capacity building strategies to increase their long-term viability, management skills, responsiveness to changing the market conditions, and overall effectiveness. So, let’s understand in detail how small businesses can build capacity.

Most people would agree that building capacity can be more difficult for small businesses. This can be due to the fewer resources they draw upon. However, you simply need a strategy, where you can pool in those resources in the most effective use. And then you will be able to grow in a much faster way. This can involve everything from training existing employees, to networking, to increasing your technical capability, to adapting policies. No matter what route you take, you need to plan well and put together an organised and well thought out capacity building plan, as margin for error is small when it comes to small and medium enterprises. Outside assistance comes highly recommended, as a consultant will be able to determine the areas of your business, where improvements are needed, whether it is the creation of new roles, leadership development or something different. You may feel that your resources are stretched at your small business. If that is the case then you need to recognise that every single business has the capacity to grow, and this is because every human can grow. And this, in turn, will lead to business growth, which is why a lot of small business owners need to focus on HR development when putting together their capacity building plan.

Why You Need Capacity Building

Your business needs to build up a workable infrastructure that supports your business and its causes. Capacity building is often overlooked in businesses, where employees are simply trained. But the benefits of instigating this type of skill development in your business will be obvious as it will start to help your business build and grow. Capacity training not only helps in building a more effective team, but it can also increase profits, which is essential for any business. If your business is making profits and solving the core issues, then your business is succeeding and creating a sustainable future.

Businesses, of all kinds, need capacity building in order to grow and sustain. However, there are some specific business issues that can be altered with the implementation of capacity development. 

How To Get Started?

If you are ready to include capacity building into your company, you can find many ways or sources to help you in kick starting. There are many sources that can guide you through the steps. If you are heavily funded, you can consider hiring a consultant in the field, especially if you don’t feel like you have the time to do it all on your own. Then, you can talk to other business leaders about what they did to build capacity in their company. Also there are some local workshops that will help you in learning more about this fundamental strategy that can make a huge difference both behind the scenes and in the company.

Preeti Verma
Preeti Verma
An alumna of IIMC, Preeti writes on global and domestic business, life cycle of a business and its stages. Her fourteen years of stint includes The Economic Times, Business Standard, Financial Express, Tehelka, Businessworld and Times Internet.

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