You may wonder why capability models are such powerful strategy tools in today’s environment. In my years of consulting experience, I have found that an organization’s capabilities remain relatively stable over time and have been used, limitedly, in strategy realization. Organizations typically request capabilities that are core to their business or differentiators in the market. Organizational units, business processes and technology enable the achievement of the business capabilities. We have found that building a set of capability models that are constantly monitored and interrogated is the key.
Differentiating capabilities requires an organization to gain knowledge about the environmental influencers that are shaping and impacting their market. This includes areas such as emergent technologies, competitors, and, customers. Being able to bind this knowledge, in a way that allows for rapid marketplace response, is the difference maker. Many organizations capture and maintain this information but lack the methods to evaluate and leverage the knowledge gained.
One method is the rationalization of environmental influencers where we identify how they change our perspective on other capability model objects such as business goals, measurements, problems, opportunities, impacts, etc. See figure 1, Business Capability Model.
Rationalizing, emergent technologies, may accelerate an organizations achievement of certain goals, provide a new opportunity, solves an existing business challenge, change plans and business requirements. New customer insights, may force the organization to change its goals and/or measurement and bring new benefits to the organization.
The outcome of environmental influencer rationalization is to gain new insights and knowledge to create competitive advantage. Has your organization requested validation of their business strategy?
How did you respond to that request? What was the business response to your response?
When faced with this situation, I typically develop a set capability models to initiate the discussion.