The New Book “Digital Capability - Build Lego-Like Capability Into Business Competency” Introduction ~ Future of CIO

Monday, June 12, 2017

The New Book “Digital Capability - Build Lego-Like Capability Into Business Competency” Introduction

10:53 PM Pearl Zhu No comments

A good definition for a capability is the ability of the business to consistently deliver an expected result to the marketplace.

A capability is an ability that an organization, person, or system possesses for either problem solving or making a certain achievement. A business capability is the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. The corporate capability is the collective ability to implement strategy, innovation and make changes. Traditional management often focused on process or functional based business views which are perceived via inside-out, single-dimensional operational lens. Capability views seem to be more open to considering both internal or external sourcing and provide a level of abstraction that allows more open considerations of the business ecosystem from the multidimensional lens. 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, to improve business maturity significantly. Therefore, the organization should spend more resources upon crafting unique business capabilities and capturing business growth opportunities.

The purpose of the book “Digital Capability - Building Lego-Like Capability into Business Competency “ is to provide an insightful understanding of assessing, developing, and managing organizational capabilities in a structural way. The organization’s competency is based on a set of cohesive capabilities and how fast and effective they can be built upon. The high-mature organizational capability is the digital business differentiator, to keep the business unique, competitive, and innovative, to improve business maturity significantly. The capability views enable dot connections and help the business identify “actuality, capability, and potentiality,” build Lego-like capabilities into core business competency and improve the success rate of strategy execution and overall business maturity.

Chapter 1 Digital capability assessment: A good definition for a capability is the ability of the business to consistently deliver an expected result to the marketplace. A "business capability" describes what is a business entity in the organization, what is their purpose and output to the enterprise. Business capabilities are different from the mere sum of individual abilities and skills of its members. Business processes underpin business capabilities, and business culture nurtures capability coherence. It’s about what we do as a company, how we do it. It’s the collective capabilities to ensure the organization as a whole can achieve more even it is consist of a group of normal people. Business capabilities are fundamental pillars to achieve the corporate strategy, and digital capabilities are dynamic and recombinant by nature, without them, strategy execution cannot be sustained.

Chapter 2 Capability dot connection: Digital capabilities directly decide the overall organization’s competency, and how well they can make the digital transformation, deliver the value to the customers and build a long-term winning position. Connecting the dots, both across and within organizational boundaries, is the great practice to understand, map, and develop the unique set of business capabilities. Few organizations have found a way to reward the type of thinking that allows people to connect the dots. Dot connecting is knowledge alignment and innovation stimulation.

Chapter 3 Digital capability development: Business capability provides a differentiation and the ability to do things and finish tasks in a consistent manner. It is important to take the logical steps for managing a typical capability lifecycle which spans need, requirements, acquisition, in-service, obsolescence, and disposal. First, identify your business core capabilities, and hone them into organization-wide competency. Identify the capability gaps for strategy management; also, comparing your set of capabilities with competitors' to ensure that it is developing differentiated capabilities to gain unique competency.

Chapter 4 Digital capability portfolio: Business capability provides a differentiation and the ability to do things and finish tasks in a consistent manner. It is important to take the logical steps for managing a typical capability lifecycle which spans need, requirements, acquisition, in-service, obsolescence, and disposal. Within that portfolio, a capability will be transient unless managed and maintained over time. To stay competitive, companies must go beyond experimenting with digital, build solid digital capabilities, manage a healthy digital capability portfolio, and commit to transforming themselves into a fully digital business powerhouse.

Chapter 5 Digital capability maturity: 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 and drive enterprise-wide digital transformation. Compared to industrial capabilities, digital business capabilities are more complex in design, with the synthetic nature requiring cross-functional collaboration, embedding agility into processes for adapting to the changes. The right set of high mature digital capabilities directly decides the overall organization’s competency.

The digital ecosystem is complex and volatile, for complex problem solving, understanding context is often the first and the important step in framing the problem, create the relevant context to make a more lasting solution - without it, you are working without any boundaries, or basis for understanding what you are doing. So, if the organization can actively influence its environment, it means that it can actively develop its unique set of capabilities, and build differentiated business competency to adapt to the environment proactively.

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