Organizational Capacity

"The race is not always to the swift, nor the battle to the strong, but that's the way to bet." - Damon Runyon

Understanding that all organizations, and their sub elements, have finite production capacity is an essential part of leading effectively.  Yet this is one of the most common gaps in the perspectives of otherwise enlightened and experienced  executives who I work with.  On reflection, all of us would agree that a large, more efficient, and more effective company or business will create greater value, larger output, and higher quality effects than a small one.  But this realization is seldom matched by the actions of leaders who routinely fail to realize the essential physics of organizational production.  Size matters; so do internal processes, leadership, managership, technology, and other factors in the ability of a company to produce.

The typical response to production shortfalls of quality or quantity is to simply demand more and faster; to "turn up the heat" and increase workplace pressure.  This is especially true in government and the not-for-profit sectors.  The result is usually the opposite of the desired effect; higher demands without addressing root cause and added friction in the production processes further reduce efficiency and effectiveness.  As output decays, unenlightened managers and leaders do what they know again; "turn up the heat".  The death spiral continues.

Under these conditions employees simply do the best they can with the tools they have to work with.  Faced with flawed structures, processes, and other challenges they set their own priorities and slog along in quiet desperation trying to achieve the impossible.  This is particularly evident in the staffs of most government organizations.  Leaders add demand after demand to their staffs with little fundamental understanding of the staff's capacity to perform to expected levels.  Flawed "priority systems" are implemented to bring focus to a jumble of conflicting and impossible requirements.  The "priorities" change on an almost daily basis or are ignored altogether.  Employees quickly lose track and cease to pay attention to them.  These are simply "laundry lists" of things to do with the number exceeding the organization's ability to genuinely focus on them. There is an old saying that "when there are too many priorities, there are no priorities" and it's true.  More importantly, "when there are too many priorities, everyone gets to choose their own."

No rational person would expect the same results from a little league baseball team as from the New York Yankees.  But the equivalent practice occurs every day in business and government.  It's a terrible problem and the source of enormous employee morale problems; asking someone to do the impossible for years is guaranteed to dispirit and demoralize the most dedicated workers.  The best ones leave, the mediocre ones stay, production falls, the cycle deepens.

Here are some things that leaders can do:

  • Understand the physics of organizational capacity. There are causes and effects of size, process, technology, and other factors of production on organizational output.

  • Assess the organization and its sub elements to understand their optimum capacities for quality output. How much is it reasonable to expect; steady state and for brief periods of "surge"?

  • Don't just "turn up the heat" and make greater demands.

  • Find the root causes of production shortfalls; both quality and quantity shortfalls.

  • Fix the root causes, not the symptoms.

  • Stop using friction producing "priority systems" as a substitute for genuine understanding and reform.

  • Help your employees; personally. Ask them what they need from you, then do it.

  • Align your own and subordinate leaders expectations with the reality of the company's potential. Are you managing a little league team baseball team or the New York Yankees? Leaders need to understand the capabilities they are guiding.

"Everybody says we hated the New York Yankees. We didn't hate the Yankees. We just hated the way they beat us." - Al Lopez

“Don't mistake activity with achievement.”― John Wooden

Keith Stalder, #58

Copyright © 2015 Keith Stalder & Associates, LLC. All rights reserved.

Keith Stalder has over 40 years of leadership experience in organizations from the very large and established to small technology start ups and everything in between.  With a broad and deep appreciation for, and understanding of, the fundamental challenges of organizations and businesses, both in government and the private sectors, his passion is to help all organizations become all that they aspire to.  He is the founder of Keith Stalder and Associates, LLC, a company dedicated to advancing organizational visions and fundamentally transforming how businesses everywhere are run.  Visit for more information.