Sridharan Madhusudhanan (Joint Secretary, MEA, Govt of India) said: “Performance and capacity are two different things. It is fair others judge our performance and not capacity. But we make the mistake of taking that performance judgement as a judgement of our capacity. As a result, we stagnate, deteriorate, and sometimes, we give up. Capacity can be nurtured, developed, and turned into performance”
Here he has tried to make some relationship between the two words – capacity and performance. I wanted to elaborate on this by adding three more words and first offering their meaning and then try to find some meaningful relationship between them.
Ability: “Possession of the means or skill to do something, or natural talent or acquired skill or proficiency in a particular area”
Capability: “Power or ability to do something, in short ,capacity”
(Human) Capacity: “Your ability to do something, or the amount of it that you are able to do, in short, your capability”
Potential: “Having or showing the capacity to develop into something in the future”
Performance: “A series of behaviour to accomplish specific results or objectives, or the ability to perform consistently at our best in the environment within which we are operating at that moment’”
You would have heard the corporate term MBO – ‘Management by Objectives’. How many of you are privileged to have a documented set of objectives before you start a quarter or a year to clearly understand and accept that you are supposed to achieve for your team or group or company? Also, an acronym called KRI – “Key Results Indicator”, have you been given your KRIs before to start a time period of work? Mostly the CEOs are given targets to achieve and are supported and reviewed by the board of directors. If the objectives are SMART and KRIs clear and bought off by both parties (you and company), then you can be assessed on your performance against it. Only Performance can be measured through metrics, your ability can be evaluated by tests or other means, but your capacity or capability cannot be either evaluated or measured. Your capability should manifest itself in your performance. You are always judged by impact, not by the intent by which you do things.
For a CEO, the Board of Directors of any profit-making organization would not say (usually, unless there has been a recession year) maintain the same revenue or profits – they would give a target (ex. 20% year over year – YoY) to achieve. Meaning you are not evaluated next year by what you are doing this year – you are usually pushed to the next level, they know you have the “potential” and you have “greater capability” and hence they can expect more from you. This is how promotions in an ideal world should be given as well, the performer (employee) should be performing at his next career level over a period of time consistently for him to be elevated to the next level. For a CEO to perform well YoY, he needs to have a highly-performing team with him- he needs to select his team well to achieve his goals. Same way sprinters like Usain Bolt always are looking at pushing themselves to gain that microsecond to perform better because they believe (and we believe) they have the potential to do so. One cannot sit on your laurels for a long time- one should be constantly improving by getting the right opportunities and performing well in it. As your performance increases, the expectation also increases – either by the company or by the spectators of any game. This is a vicious cycle – once your curve goes from a linear or an exponential rising one to a flat one, it is time to quit.
Almost all government establishments have a stupid criterion of AGE for job promotions which is ridiculous (Time in Job, I have seen many private companies also have this criterion) – by spending an amount of time in a particular job, you are automatically destined for promotion to the next level – whether you even achieved or “able” to perform at the present level is irrelevant.
When you are selected for something (be it a job or a sport), it is already determined by the selectors that you have the required ‘ability’ – this is the basic minimum needed to get your foot in. Just because you have the ability, does not mean you have the capability to do something – meaning, the skills are there, but not being used properly to achieve something useful. There could be many reasons for the same – your boss, your team, your surroundings, your work ethics, changes in family equations etc. You are seen to perform in different environments equally well. Great engineers do not automatically become good leaders. Great batters or bowlers do not become good coaches. This is why we see lots of domestic talent in cricket being wasted when they start playing at the international level – they simply cannot perform. IPL wonder kids become international laughing matter. By constant training, capability or human capacity can be developed and extended – that is why pacers go to MRF foundation to get better, to increase their capability and the NCA for improving their fitness levels.
So, the basic acceptance criterion is your ability. Once in, you need to constantly and consistently improve your capacity to perform better and better, and with that the expectations of you also increases and your potential value also increases, thus pushing you to increase your capability to deliver results.