We have learned that some organizations execute their strategy based on the amount of money they have available in the bank, the skills of their current workforce or educated guesses about where the business environment is headed. However, more mature organizations are executing strategy by identifying and filling gap between the business capabilities they have today and the capabilities they need in the future. Doing so results in improvements across your organization – even in areas where you did not expect to see wins such as your structure, processes, people and even culture!
Business capabilities are what differentiates the organization and ensures that it is equipped to execute its strategy. Capabilities are the “What” is needed in order to execute, followed by the “How” to achieve the desired result. These are the operational things or what the organization must know how to do to execute strategy. For example, a manufacturing firm must know how to design and create innovative products. [http://www.accelare.com/strategy-to-execution]
What is a capability-driven organization good for? In short, running your organization based on capability models can improve your design, implementation and outcomes. Capability based planning involves getting real about what is needed to execute and about getting to the root cause of issues that are holding you back. As a result, capability-driven efforts improve:
• Strategy: Unpack strategy as part of exploring capabilities allowing strategy to become much more clear and likely to succeed
• Structure: Employ a capability based organizational design which ensures accountability of capabilities to execute the business strategy. [And bust through silos!]
• Processes: Improve the series of connected activities that make up the work you carry out for efficiency/effectiveness
• People: Clarify the skills, knowledge and abilities needed in order to deliver so that human resources are operating at peak performance
• Culture: Amp up the beliefs, values and norms which represent your organization’s unique character and makes it what it is
For example, a health insurance company adopted capability based planning solely to improve their performance via better execution of strategy. However, over time I observed that the strategy to execution work was positively impacting other aspects including people becoming more collaborative, processes becoming more efficient and technology tools becoming more useful for end-users. In fact, a common refrain from employees on the ground was that the culture had improved.
Hard to believe that capabilities can improve all these areas? It is not surprising given that capability based planning involves figuring out what it will take to succeed from a People, Process and Technology point of view and filling these gaps. This is all about becoming a high performance organization. A simple formula that works.
What challenges are you facing that may be solved through capability based planning?
Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.
Kevin Anderson, Dr. Organizational Design 