Reevaluating capacity building during a recessionary hangover

McKinsey’s study on capacity building efforts was insightful but may need some updating to remain timely. The venture philanthropists and foundations that financially supported non-profits favored organizational capacity investment when the study was conducted in 2001. There was certainly a need for a collated and codified concept of what organizational capacity encompasses and what means organizations can undertake to develop it.  McKinsey suggests resetting aspirations and strategy, focusing on strong managerial leadership, and remaining patient through the process. Of the three principal lessons presented I found the first resonated the most with me. Today, is there favorable sentiment toward a framework of infinite capacity investment and perpetually changing organizational focus? The other two primary takeaways translate better over ten years later with qualifications on the first statement.

Granted, in 2001 the investment world was recovering from the dot com burst and 9/11, but on the whole there was optimism. I feel that in the wake of the recession there is a sobering attention being put on focusing, simplifying, and downsizing. The monotonic frame of mind that encouraged expansion and investment through the early 2000s has been tempered by a voice that argues for examining the status quo and downsizing.  In principal it is difficult to make an argument that it is undesirable to see social programs expand into fully functional institutions. However, I find the main principal behind this mind set running contrary to the first of McKinsey’s suggestions.

Is capacity building really synonymous with focusing the vision of the institution? Is maintenance of a functional status quo universally less desirable than continued growth and development even if said growth and development isn’t warranted and takes away from the focus of the organization itself?  Expanding the organizational capacity of the organization could muddle it with bureaucracy and mission creep. The first suggestion leaves an organization at risk in a somewhat “chicken or the egg” scenario. Is the organization increasing capacity to meet demonstrated needs among constituents (desirable) or changing focus to accommodate newly developed capacity (undesirable)? As non-profit institutions are seldom flush with cash and human resources the troubles that come with expanding organizational capacity (collateral demands from other areas increase, other unintended consequences) can be particularly taxing. By allowing room for institutions to focus less on expanding their capacity and more upon making better use of what’s in place and doing more of what’s working strong management and patience will likely produce a more meaningful reward.