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Absorptive capacity

Absorptive capacity is how much new change an organisation can take in and make real while continuing to run. In its original research sense it describes the ability to recognise, take in and apply new external knowledge; in change practice it describes the ceiling on how much adaptation a population can absorb at once.

Capacity to absorb change is a finite quantity that no governance forum in most organisations owns.

Why it matters when the plan changes

Plans are approved against financial capacity and rarely against this one. An organisation with the money and the market case for four initiatives may not have the attention to absorb them, and nothing in a business case surfaces that. The constraint is real, invisible in the approval process and binding in delivery. Sull, Homkes and Sull reported in Harvard Business Review that only 11% of managers believed their company's strategic priorities were resourced, which is what exceeding capacity looks like from inside an organisation, not from the plan that approved it.

The tension is that capacity is not evenly distributed. Two initiatives affecting different populations coexist comfortably; two landing on the same middle managers do not. Measuring capacity at the level of the organisation misses this, and measuring it at the level of the people actually absorbing the change is what nobody does. The friction shows most clearly where new demand meets existing support: populations carrying operational work absorb less new change than the aggregate figures suggest.

In practice

A portfolio review approves four programmes on their individual merits. Three of them require substantial time from the same layer of business-unit leaders. The fourth is approved on the strength of its business case. All four are funded and one of them will be delivered properly, which nobody decided.

Evidence

What it cannot tell you

Absorptive capacity describes a ceiling on how much change a population can take in, but it does not tell you which specific initiative should be cut, delayed or resequenced when the ceiling is exceeded. It is silent on why capacity is low in a given population, whether the cause is skill, mandate, sequencing or design.

Questions

Not precisely, though it can be estimated by asking which populations each initiative actually draws on and summing by population rather than by initiative. Harvard Business Review found that only 11% of managers believed their strategic priorities were resourced, evidence that this arithmetic is rarely done at portfolio level.

In the management layer immediately below the executive, who carry the operational and the change work simultaneously. Sull, Homkes and Sull reported in Harvard Business Review, 2015, that only 11% of managers believed their priorities were resourced, precisely the layer where capacity is invisible to those who authorise the plan.

Somewhat, with experience of change and with capability built deliberately. It grows slowly and cannot be expanded on the timescale of a single programme, so within any given plan it should be treated as fixed and designed around rather than exhorted upward.

Changes that require people to work differently rather than to use a different system, changes that cross boundaries, and changes that arrive while a previous one is incomplete. A technically small change landing on an organisation mid-integration can consume more capacity than a large one landing cleanly.

Not only whether each initiative is worth doing, but which populations it draws on and what else is already drawing on them. Approving each one on its individual merit without ever looking at that aggregate is how four funded programmes end up producing one properly delivered one.