Capability is the quality of being capable. Being capable is to have the capacity or ability to do something or achieve specific goals or objectives. Capacity is simply the potential that each individual has to be more than they are now. Where capability is something that can be learned and improved, Capacity is not something to be learned but can be expanded and developed over time.
Being more and doing more is the concept of Capacity. Have you ever wanted to do more or be more than you are? This is an urge to develop your capacity. To have the desire to achieve more and improve the quality of ones life is to want to develop or improve capacity.
For managers it is important to foster the development of capacity and not just capability. This may sometimes mean that as a manager you might have to do less and be less in terms of your relationship with your subordinates.
Check out this site for 17 Extraordinary Human Capacities: