Saturday, August 28, 2021


Organization need to discover its own strength, find its niche, and build a set of core, and better recombinant capabilities in order to become more competitive

The ecosystem environment today is full of uncertainty, velocity, complexity, and ambiguity, a business capability is the firm’s ability to integrate, build, and reconfigure internal and external competence to address rapidly changing business environments. However, many business strategy implementation or change efforts are symptomatic of not having a comprehensive understanding and taking a stepwise approach to build competency and managing a seamless transformation. Here is the logical scenario to develop a capability management portfolio with interrelated components and information-based intelligence.

Planning & forecasting: Capabilities underpin business strategy execution. Nowadays, strategy is dynamic, thus, capability development also needs to be dynamic to adapt to the rapid change. Good planning is goal-directed, purposeful, and intelligent. Organizational management needs to do planning and forecasting about how they can compete to capture the uprising trends or explore new marketing shares, which capabilities are crucial to enable their agile strategy. The degree of planning has a positive correlation with the degree of uncertainty and unpredictability. To outbeat the market, a highly competitive company enforces an iterative planning- implementation continuum and has a deliberately close alignment among the company’s strategic direction, its coherent and distinctive capabilities, and most or all of its products and services, and guide the business to the future in a structured way.

You can succeed where you choose to improve. Gain a robust enough view of the future to enter new domains before they take off; translating strategic intent into dynamic planning, then into capability development and into meaningful action and making the needed changes stick can be difficult, doing it frequently and at a fast pace, even more so, but worth the effort. The very first step in capability development is capability modeling which serves many purposes including forecasting & planning. Business capability is the people, process, and tools required to perform a business function. The key to successful capability/capacity planning is to be transparent, know what you are doing and what you are good at - the organizational innate strength, clear leadership at all levels, enhance governance so everyone knows what they are to execute on, and enable capability-enabled strategy management.

Categorization & classification: A classification is based on the position of the concept in the evolution tree, it’s about capability categorization and portfolio management to improve effectiveness, transparency, and resource efficiency. Categorize your own flavor and decompose. There are base capability, differentiated capability, and core competency - a set of capability with a focus, etc. Classification helps the management highlight the real value and a health capability portfolio management can support strategic planning and execution. It allows you to manage the spend in developing the capability, and provide the executive insight about which of the strategic choices is most likely to succeed in the organizational culture, and the program of work required to build and sustain it.

There are capability necessities and capability differentiators. Some keep the lights on; some build unique business competencies. Some can be built in house, some need to be acquired. Some are linear, some are integral; some are stable; some are dynamic; some are event driven, others are goal driven. etc. After formulating strategy alternatives, you design the capability and cost it for each alternative. That way you can see if you can do it with your own workforce through training, or if it will require transitions. Processes underpin capabilities; the smart process needs to have dynamic aspects to it. It is rigorous; it can handle ad-hoc and exceptional matters smoothly and it ‘knows’ enough to be able to handle failures effectively.

Exploration & exploitation: During the journey of business transformation, forethoughtful leaders understand where and how they can and should improve to get the biggest effect and scale up across the digital ecosystem effortlessly. In fact, either individually or collectively, the key factor to the paradigm shift has been the endless self-exploration and self-renewal in intellectual, emotional, material, or spiritual dimensions that need to co-evolve together for continually building capabilities and accelerating performance. Compared to the silo based industrial age, emerging technology tools and abundant information allow a company to speed up in capability development cycle and move into a more advanced stage of digital exploration.

However, for many lagging organizations, the ecosystems have evolved without much attention or planning. Some organizations are operated in a hybrid mode, separating the exploitation of the existing methods and technologies from the exploration of the new way to do things by leveraging the emergent trends to design, build, scale, and optimize business capabilities to drive transformative changes.The multi-thread management involves aligning initiatives, talent, resources, and performance with the goals to implement dynamic strategy and improve business maturity continuously and systematically.

Modeling & mapping: Capability models allow analysts to conduct a fit/gap analysis of capability vs requirements, facilitate the process of deep analyzing, and managing large volumes of activities and run simulation events to identify areas in a capability portfolio that can be changed and optimized, such as duplicated capability or ineffective capability, etc. Capabilities underpin strategy management. Seldom is there a strategy that is achieved by one capability, and this is why the task of mapping capabilities to strategies is difficult, but a necessary step in effective strategy management.

There are natural frictions between different functions of the company, thus, it is important to make a gap analysis between business functions, the current state and future state of the organization, capability evaluation -capability gap in the context of future need, or capability dependency or business capability reliance on technology capability, investment calculation, etc. A capability mapping and development involves capability analysis - documenting how an existing capability works/ flows to capability re-engineering - making improvements to an existing capability; capability design - creating a new capability. But keep in mind, capability is still the means to the end; in the end, it is not about modeling or designing a capability. It's about strategy execution!

Dissemination and integration
: The business capability is a composite of "whos," "whats," "wheres," "whens,""whys," and "hows." The composite must be broken down to its constituent elements and each element mapped to associated strategies for enabling business change. The process of dissemination is to analyzing the capacity of each element of the capability against each associated strategy to assure the element as used by each capability to achieve each strategy adequately; to re-framing of business planning processes in order (who participates, how often, allowing creativity and innovation to flow, identifying technology as well as business risks, etc.); re-framing of in-place processes that filter and fund investments, both business-oriented and technology-oriented.

There are both hard and soft components in capability development; the successful capability integration and quality management will depend on the underlying business relationships between all of these points and how they influence each other. Some relevant capabilities can be integrated into unique business competencies to solve more complex problems. The best scenario is to create a comprehensive capability map through cross-functional collaboration. Those business capabilities with gaps are evaluated more deeply, which produces a list of remediation work that needs completing to improve differentiated business capabilities and enhance capability management cycle.

Evaluation and feedback
: The criteria to evaluate capability maturity need to clearly identify the core competencies and focus more on optimization opportunities and tuning organizational competencies. The capability maturity can be measured against the achievement of desired business or customer outcomes. This can be accomplished by measuring the people, process and technology impact on capability effectiveness, Feedback on capability-enabled performance and outcomes help the business management make the timely adjustment for making continuous improvement. Measurement systems should be in place as part of overall capability portfolio management to ensure the value proposed in any business case is actually realized. It can help you get some objective perspectives on what you are trying to manage,

Business executives, employees, clients, and vendors all have their various observations on the capability management cycles. Thus, they can provide great feedback, their respective viewpoints based on their special angles can indicate useful areas for further exploration and confirmation. You should have an in-depth understanding of what capabilities are critical to building the long-term competency for the business's long-term prosperity. Organizations strive to become people-centric businesses. Assuming the company has a great product, creating meaningful, relevant, and compelling differentiation in the mind of customers is the challenge. This is the foundation in which capabilities are built or optimized and brands are built.

In fact, there is no “one size fits all” formula for capability development. Organization need to discover its own strength, find its niche, and build a set of core, and better recombinant capabilities in order to become more competitive


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