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Development is both an individual and collective endeavor. To be lifted out of poverty, people must attend school, stay healthy, live free of violence, and find rewarding employment— to name a few. Yet these achievements rely on the systems that provide these services and opportunities— the educational system, the healthcare system, the police and civil servants… the list goes on.

Capacity building involves strengthening the individual ability of people to function or perform tasks. It therefore, focuses on skills training and improving technical ability among individuals. But people change; they move around, they leave. Building capability enables people to meet future challenges; using a range of experiences as a vehicle for individual and organisational learning; acting as a role model for personal development. Leaders champion learning and capability development so that they and others gain the skills, knowledge and experience they need to meet the future needs of the service, develop their own potential, and learn from both success and failure.

The strategic importance of capabilities is apparent around the globe: half of all respondents this year say capability building is at least a top-three priority at their companies. This finding supports our experience with fast-growing organizations in the region, which face notable capability gaps as they expand. Regardless of region, though, most executives agree that they are not building capabilities for purely competitive reasons.

They most often cite customer demand and strategic importance as the factors their companies consider when prioritizing capabilities. Company culture and the results from standardized diagnostics rate lower. Capacity is about growth: growth of the individual in knowledge, skills and experience. Growth of the group that surrounds this individual as these skills and knowledge are passed on; and from this individual and group, growth of a society and nation. Capacity development is about supporting growth – within individuals, groups and across societies as a whole.