Tuesday, September 15, 2020

“Run, Grow, and Expand” Enterprise Capability Portfolio

Enterprise capability management, in essence, consists of a portfolio or matrix of capabilities that are used in various combinations.

Organizations of the future are increasingly exhibiting digital characteristics in various shades, extensiveness, and intensity, a set of unique capabilities directly decides the overall organizational competence and maturity. 

The digital capability is modular, dynamic, and nonlinear, business management needs to know what they are able to accomplish, and what it will take to expand the differentiated capabilities. the capability dependence or interdependence, as well as how to accelerate the development cycle for getting digital ready.

Capabilities oftentimes include dependencies, one is part of another, or depends on another:
There are multiple perspectives of organizational capabilities, and there are all sorts of capabilities such as enterprise learning capability, changeability, innovation capability, problem-solving capabilities, etc. Business executives should be sufficiently aware of the "general condition" of the various capabilities, provide input into a qualitative assessment, identify capability gaps in the context of future need, or capability dependency, as well as gain insight into condition and relationship or interdependency-one capability depending on the other, etc, in order to integrate and optimization and speed up capability management cycle.

The matter of fact is that business capability building today is dependent on information technology as a linchpin. The abundant information and emerging digital technology are some most important elements in the new breed of digital capabilities which are rigor, but not rigid, standardized, also dynamic, mosaic, but not lose focus. Only through an in-depth understanding of the interdependence of capabilities, architects, and engineering teams can work collaboratively to integrate them cohesively, accelerate the design and development cycle, extend functional capabilities into a holistic capability portfolio and build a unique and sustainable business advantage.

Capability cannot be transferred because of the degree of organizational learning capacity, unique culture ingredient, or management expertise: Organizational capabilities continue being considered the market-relevant bundles of resources with the potential to drive business competitiveness. A cohesive set of business capabilities can be woven into core organizational competencies. A core competency is a deep proficiency that enables a company to deliver unique value to customers and differentiates itself from competitors. It usually emerges from a blend of people, processes, and culture which evolves into a mindset, and it is hard to copy.

Due to corporate learning, culture setting, or management discipline, usually, these unique capabilities cannot be transferred easily. Also, if you try to emulate competitors, you start looking like them, perhaps you lose your own strength and forget your business purpose. An organization can hone their core competency via a good alignment of reliable information, rigorous processes, flexible structures, efficient technologies, and talented people, etc. A core competency is valuable, rare, and difficult to imitate. Organizations with multiple and complementary core competencies can build formidable companies and unlock business performance and build a solid company brand.

The capability enables business strategy, and strategy cultivates capability: The enterprise consists of a set of capabilities. Business capabilities are fundamental pillars to achieve the corporate strategy. And the capability-based strategy has a higher success rate. If you cannot read your strategic competencies and capabilities, then it's a great question to ask of the executive and strategic planning team. Top executives need to identify the capability patterns of the company, the risk profile of the enterprise performance deficiencies, and assess the management view of the condition/suitability of capability to support the intended future operating model and implement a well-defined business strategy.

Enterprise capability management, in essence, consists of a portfolio or matrix of capabilities that are used in various combinations. When you want to make a change to one of those capabilities, then your business model - capability mapping assists with a high-level impact assessment and delivery approach. The organization should understand its environment, take a proactive approach to “run, grow, and expand” their capability portfolio, develop new products/services, and then deliver them seamlessly.

The digital business today is dynamic, continuous, expansive, interdependent, hyperconnected, and interactive. Organizations need to discover their “innate strength,” understand the interdependence of varying capabilities and make an objective assessment of their business capability maturity which would be based on its ability to deliver on either customer needs or to achieve the desired business outcome.


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