This RAND Europe study, conducted in collaboration with the Saatchi Institute, examines organisational capacity assessment. This study explores how organisational capacity is understood and measured in a range of organisations, before analysing how culture and communication drive organisational performance and offering an initial outline of a diagnostic tool for organisational capacity.

Cover: Understanding the Drivers of Organisational Capacity
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Understanding the Drivers of Organisational Capacity

by Kate Cox, Stephen Jolly, Simon Van Der Staaij, Christian Van Stolk

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Research Questions

  1. How is 'organisational capacity' understood and measured in the public and non-profit sectors?
  2. How can organisational culture and communication be conceptualised, and in what ways do they contribute to capacity building?
  3. How can organisational capacity be better understood and measured in the future?

This study aims to improve the ability of organisations to measure their capacity and to harness organisational culture in optimising performance. Organisations worldwide face a profound challenge: they are asked to deliver the same outputs and outcomes while facing budget reductions, technological disruption and political uncertainty. This raises an important question about how public and private sector organisations can develop their capacity to deliver services, products or value, when so much effort has focused on reducing costs rather than improving performance.

RAND Europe, in collaboration with the Saatchi Institute, conducted a study intended to advance current debates on organisational capacity and the role of 'culture' within organisations. Based on interviews and a literature review, the research analyses the dimensions of organisational capacity; explores how organisational culture (collective beliefs, values, behaviours, attitudes, norms, artefacts and symbols) and communication interact with capacity building; and paves the way for future development of a diagnostic tool for organisational capacity assessment.

The main tenet of the report is that better performing organisations have a range of capacities that contribute to better outcomes. Linked to all of these capacities are two critical concepts: culture and communication. Our research shows that organisations can influence their own culture, and that communication can allow organisations to effectively harness culture to manage change, mitigate risk and enhance performance. The report also lays the foundations for the development of a diagnostic tool that can support understanding of organisational capacity and help establish a baseline for assessment.

Key Findings

There is little agreement on what constitutes organisational capacity but consensus that it is a multidimensional concept

  • Despite diverging definitions, our research found that 'organisational capacity' is a multidimensional concept with culture and communications as core determinants. Culture and communication are linked to six dimensions of capacity: leadership, strategy, structure/governance, skills, human capital, and accountability. The relative importance of these dimensions varies depending on the mission and maturity of an organisation.

Culture and communication permeate all areas of organisational capacity and support capacity building

  • Capacity building without a supportive organisational culture and effective communication is unlikely to achieve organisational performance objectives, and even less likely to enable the organisation to achieve transformational change. Organisational capacity building generally involves a change process, be it implementation of a policy change (such as Brexit), restructuring or modernisation. To be successful, these processes require effective communication and a culture that is attuned to the aims, values and functions of the organisation

A diagnostic tool can help in understanding the capacity needs of an organisation and establishing a baseline for assessment

  • Our report lays the foundations for a diagnostic tool that centres on culture and communication and presents questions linked to the associated dimensions of capacity. Follow-on research should be conducted to understand how each dimension fits with an organisation's overall mission and level of maturity. This work could enable leaders to draw on wider judgements on organisational capacity deficits, future capacity needs, and crucially, the presence of a culture that supports capacity building.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Assessing organisational capacity

  • Appendix A

    List of interview questions

  • Appendix B

    List of interviewees

Research conducted by

The research described in this report was prepared for the Saatchi Institute and conducted by RAND Europe.

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