In today’s business dynamic, business leaders today need to identify the capability gaps for strategy management; look ahead and be proactively looking for opportunities to improve.
Core competency is a combination and harmonization of multiple capabilities with a focus: An organization would need to ask whether they need necessary capabilities at the base level to sustain the business, competitive level to stay competitive in the business or at differentiating level to be the key differentiator for the business. A business capability is core because it offers a competitive advantage in delivering better products/services/processes to customers than competitors, and it supports the strategic direction of the organization. It’s important to have an in-depth understanding of what capabilities are important to develop core competency. So the business management should make an assessment, develop both necessary and unique capabilities; and each of these capabilities may be combined in different fashions to yield multiple competencies based on multilayered and integral business capabilities.
It takes time and effort to build high mature organizational capabilities and core business competencies. Discover the business strength that can be transformed into a core capability if it aligns with the strategic direction. The organization’s core competency is based on the set of differentiated and cohesive capabilities and how fast and effective they can be built upon. Capability optimization may evolve and move between categories based on the technology evolution, information refinement, business driver, business model evolution etc, move from base or competitive level to differentiated level. This happens when an organization decides to differentiate by taking an existing capability to the next level. In today's multi-sourcing and on-demand service delivery model, the core capability does not have to be completely delivered by the company itself; the key point is the speed of delivery and overall business maturity.
Capability coherence is the decisive factor for the success of strategy implementation: Business capabilities are different from the mere sum of individual abilities and skills of its members. Business processes underpin business capabilities; and culture nurtures capability coherence. Capability coherence is a decisive factor for strategy management. To achieve capability coherence, choose how to improve the capability based on your enterprise strengths for investing in the best of breed capability and integrate them into cohesive and differentiated business competency.
One of the beauties of working with capabilities is that it keeps you from being dragged into all the detail of the processes involved too early, allowing you to prioritize and focus on the “bigger picture,” and “keeping the end in mind” - enabling strategy implementation. As nowadays strategy management is an iterative continuum. Digital organizations have to adapt to the continuous changes via building dynamic capabilities and developing organizational advantage. The pitfall is that the part of the strategic capabilities of an enterprise perhaps causes silo or some degree of duplication of capabilities because of different naming and labeling. So organizational capability management identifies, models, develops, integrates, and optimizes a set of cohesive capabilities to achieve business goals at both strategic and operational level.
Business capability is synthetic in nature, embedding agility in processes and focusing on building the long-term organizational competency: In order to capture the potential value of their business investments, the executive teams must have a clear understanding of the link between capabilities and business strategies. They need to identify capability gaps in the context of future need, or capability dependency, and be sufficiently aware of the "general condition" of the various capabilities to provide input into a qualitative capability assessment and development. Capabilities may include dependencies, one is part of another or depends on another. It’s important to gain insight into the condition and relationship/dependency of capabilities and focus on building the long-term organizational competency.
Put some thoughts on resiliency or reuse in capability design to avoid reinventing wheels. Business capability is synthetic in nature, so capability mapping also includes capability dependency identification, and capability building could embed agility into processes to ensure capability portfolio coherence and accelerate capability delivery cycle. Loose coupling makes it possible to change the component of capability without affecting the entire system, as long as the structure and interface are kept stable. Build the dynamic business capabilities via those existing building blocks or recombining those existing capabilities into dynamic business competencies.
In today’s business dynamic, business leaders today need to identify the capability gaps for strategy management; look ahead and be proactively looking for opportunities to improve; also compare your set of capabilities with competitors' to ensure that you are developing differentiated capabilities to gain unique business competency, transform business models, optimize operational processes, and improve customer experiences to reach high-level business maturity.
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