Friday, March 17, 2017

High-Mature Organizational Capability as the Digital Business Differentiator

The high-mature organizational capability is the digital business differentiator, to keep the business unique, competitive and innovative, and improve the business maturity significantly.

A business capability is a specific ordering of people, processes, resources, Information, and technology, aimed at creating a defined business outcome; capabilities are often developed reactively to competitive threats, strategic opportunities, and environmental changes. So all businesses have certain capabilities, what matters is maturity, the high-mature set of business capabilities can make organizations more adaptable to fulfill their strategy, as the key business differentiator.

Create the mapping between capability and strategy:  It is a process of progressively elaborating a set of capabilities through conceptual, logical and physical states, informing decision-making at multiple levels, and helping to maximize the business value. The executive teams must have a clear understanding of the link between organizational capabilities and business strategies, in order to capture the potential value of their capital investments. Business architecture can be taken as a mapping tool in providing the visibility and defining the roadmap for strategic alignment. It is also a discipline that helps organizations define and deliver organizational capabilities aligned with their strategic goals and objectives. Prepare the strategic plan points the company in a direction where it can maximize its market position and reap as many benefits as possible. This direction must allow for economic, market or customer change and let business adapt smoothly. A good strategic planning helps organizations extract the maximum value from their portfolio of organizational capabilities by their ability to inform decision-making at multiple levels, and to drive strategic alignment and optimization.

Modular business capabilities enable flexible strategic planning and execution with agility:  It's about breaking down the business capability blocks, there are the variety of hard and soft business elements such as skills (ability), knowledge (internal/external), policies/routines, business processes, any type of tangible/intangible resources, assets, culture, and forms of communications. These modular business capabilities can be recombined into dynamic digital capabilities with much shorter building cycle. The capability-based strategy is not only leading to a destination (business vision) but also cultivating and optimizing the set of mature enterprise capabilities on the way proactively, to further improving the business competency. Most of the enterprise capabilities need to be woven cross-functionally, it takes seamless communication and collaboration for the business as a whole, so it has to bridge the functional silos and fine-tune key business processes for crafting a set of high-cohesive and high mature organizational capabilities.

Leverage the capability-based strategic plan to drive budgets and prioritization, and improve the success rate of strategy management: It helps stakeholders to articulate what they need in their natural language (and not be hung up about methodologies). This will get reluctant stakeholders to want to contribute in the next iteration and gives business functions enough time to develop good strategies to deliver them. The capability-based strategy is to well bridge ‘as-is’ and "to-be" state. The multitude of organizational capabilities expands the business horizon to take a different path for reaching the “to-be” state. Hence, organizational capability maturity is an important digital business differentiator to improve the effectiveness of strategy management. Alternatives and adaptation are the keywords to survival. You know where you come from but you are not sure where you’ll arrive or how you get there precisely, so be well prepared for surprises and take the step-wise adventure more confidently.
As capability is an acquired and organized "ability" within a company and takes hard work to put in place, it can therefore not be completely transferred because of the degree of organizational learning and organization that goes with it. So, the high-mature organizational capability is the digital business differentiator, to keep the business unique, competitive and innovative, and improve the business maturity significantly.


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