Monday, March 1, 2021


To keep the business unique, competitive and innovative, the objective assessment of business capability is important to design, build, and preserve core competency even as management expands and redefines the business.

The digital era upon us is about exponential growth of information, increasing speed of change and continuous disruptions. How successfully the organization can handle digital disruption depends on how fast and capable they can adapt to the ever-changing environment. A business capability is the firm’s ability to design, build, integrate, and reconfigure internal and external competences to enable business strategy. It’s important to clarify the organizational condition/suitability/adequacy/ viability of capability, and improve the overall success rate of business strategy.

Suitability: Capabilities underpin business strategy. Technically, capability represents the “what” whereas the process and people represent the how. Organizational capabilities continue being considered the market-relevant bundles of assets and resources with the potential to drive business competitiveness. To evaluate suitability of the capability, organizations can look at both process and capability maps and decide that capabilities are fit and accessible and thus aid the conversations between stakeholders. There are both capability necessities and capability differentiators. Competitive necessities focus on meeting the customer expectation and delivering what the business asks for; competitive differentiators allow the business to “dream bigger,” and achieve “the art of possible.” It’s important to identify your business core capabilities which are harmonization of multiple capabilities such that it permeates the entire organization with a focus, and hone them into organization-wide competency.

A core competency is valuable, rare, and difficult to imitate. To improve the suitability of the organization, having a clearly developed enterprise capability mapping helps to design, build, scale, and optimize a set of business capabilities. To shorten the time cycle and save the cost for building business capabilities, integrate existing building blocks or recombine existing capabilities into the more sophisticated capabilities for enabling an iterative strategy execution continuum.

Adequacy: Organizational maturity is proportional to the maturity of business capability. Thus, assessing adequacy and weighing on the importance of business capability is critical to improve business competency. Methodologically, the management readily considers multiple dimensions (service, process, information, asset, people, etc.) of the adequacy of the business capability to fulfill their business strategy. The maturity of a business capability would be based on the ability for the capability to deliver on customer needs or to achieve the desired capability outcome.

Capability development evolves and moves from the fundamental level to differentiated level between categories based on the technology evolution, business driver, or business model evolution etc. Different weighting may be applied to the capabilities. A capability's maturity should be measured by how well it adds value to the customer. But adding value won't be the same for every company. To keep capability relevant and adequate, it’s important to set up priorities, divest non-core capabilities, and free up resources that can be used to deepen core capabilities in order to build sustainable business competency for the long run.

Viability: Digital organizations are dynamic and informative, business capabilities also need to be dynamic. A viable digital organization can deliver impressive business outcomes and improve its performance by taking continuous digital practices to improve manageability. How viable the business is depends on the business's ability to integrate, build, and reconfigure internal and external competences on the fly to address rapidly changing environments, build new capability, and achieve innovative forms of competitive advantage given path dependencies and market positions.

Ideally, the viable digital businesses are solid enough to give some sort of forms and meaning and open enough to its environment allowing the movement of information, ideas, and people in and out. Loose coupling makes it possible to change the components of a capability without affecting the system. If you need to modify one of those capabilities to execute a dynamic strategy or develop new products/services/ solutions to delight customers, then model/mapping assists with a high level impact assessment and delivery approach. Capability views are 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. 

To keep the business unique, competitive and innovative, the objective assessment of business capability is important to design, build, and preserve core competency even as management expands and redefines the business. The highly complex and dynamic organizational system needs to be elaborated in a well-organized effort for adapting to emergent business changes in its own structures, functions, and behaviors, to improve business competency and maturity significantly.


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