Initiatecapabilityunderstanding

Assessing the importance or criticality of capability helps the business management balance short-term and long term perspectives, to enable the strategy executions and build business long term advantage.

Generally speaking, a business capability is an ability needed by an organization in order to achieve a certain level of business performance. Leveraging capability view allows the corporate management to focus on “what” the business needs, not necessarily digging into the process level of “how” the business runs. 

Organizational competency is based on a set of differentiated and cohesive capabilities to build long term business advantage.

 

Core & dynamic capabilities support the strategic direction of the organization: Capabilities are built by people, process, information, and technology, etc. It is always important to connect the dots between business capabilities and strategy and make a proper mapping to ensure the successful strategy execution. As capabilities enabled business strategy has a significantly high success rate.

The core capabilities could be those which are identified as delivering the business competency, or customer experience than competitors. Dynamic core capabilities are the strategic routines to accelerate the cycle of strategy management. By strengthening the business strength and improving business weakness, the capability-based strategy is not only leading to a well-set destination but also proactively cultivating and optimizing a unique set of enterprise capabilities dynamically.

Unique & integral capabilities offer a competitive advantage of the company: Capabilities are the abilities to produce specific corporate goods or services for serving customers, gaining market shares, and building business competency. Organization’s capabilities can be categorized into the competitive necessity and competitive uniqueness. Unique capabilities could be those which are identified as delivering the competitive product, services, solutions and customer experience than competitors.

Furthermore, some relevant capabilities can be integrated into unique business competencies to solve more complex problems consistently. To truly build unique business competencies, use the profiles and assess capability portfolios, to identify where the gaps in performance lie, capture the organizational development needs, and take logical steps to achieve high performance business results.

Differentiated & holistic capabilities help to build a strong brand name for the organization: There is a logical scenario in building strategic capability/fulfillment into the brand name of an organization. To build a consistent strong corporate brand name, the management needs to check: Is “what you look '' consistent with “who you are ”? Do you have a set of differentiated capabilities to build a strong corporate brand name? Business capabilities are different from the mere sum of individual abilities and skills of its members. Organizational processes underpin business capabilities; and culture nurtures capability coherence. Capabilities is a foundation to build a solid corporate brand.

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. The journey of business capability development needs to be the ongoing journey, moving from fixed to dynamic, transactional to transformational, linear to nonlinear for leading strategic changes, solving more complex problems or thorny issues effectively, developing a strong corporate brand name and deepening its influence consistently.

An objective assessment of capability includes the importance of each capability to the enterprise; different weighting may be applied to the capabilities of shaping organizational competency. Assessing the importance or criticality of capability helps the business management balance short-term and long term perspectives, to enable the strategy executions and build business long term advantage. It is the collective capability to ensure an organization as a whole can achieve more even if it consists of a group of normal people, and the well set of optimal capabilities can be cultivated via cultural coherence and continuous improvement.

Posted in: Enterprise Capability