Capabilities, the fundamental building blocks of your organisation
What must your organisation be able to do to achieve its strategy?
“Capabilities, what exactly are they?” It's a question we regularly hear at the start of a new collaboration. And admittedly, giving a clear and precise definition isn't easy.
Capabilities are, in fact, a complex and layered concept. They touch the core of your organisation and connect strategy, business and IT.
What are capabilities?
Essentially, capabilities are about what an organisation does, not how it does it. They are the fundamental abilities that enable an organisation to create value and achieve its strategic objectives.
A capability encompasses the organisation in its entirety. Enabling it typically requires a combination of different building blocks.
Competencies and processes
- What knowledge and skills are needed?
- What processes support the capability?
- What roles and responsibilities are involved?
Applications and data
- What applications support the operation?
- What data is needed to make decisions?
- How do systems and information align with each other?
What, not how
A capability describes what your organisation must be able to do. Processes, roles, systems and data determine how you put that ability into practice.
Capabilities are not departments
There's a risk that capabilities get reduced to the organisation's org chart. That's too limiting. Capabilities transcend departments and job functions. They form a cross-section of the organisation, bringing together different competencies, processes, applications and data sources around a single organisational ability.
As a result, capabilities remain useful even when teams, functions or organisational structures change.
A stable frame of reference
Organisational structures change. Capabilities tend to remain far more stable, offering a solid anchor during transformation.
Why define capabilities?
A capability map doesn't just provide insight into what your organisation does — it also supports choices around strategy, investment and change.
Strategic clarity
You gain a better understanding of what your organisation is good at, which capabilities are essential, and what value they deliver to customers.
Internal alignment
Capabilities help clarify roles, responsibilities and interdependencies.
Competitive advantage
By deliberately developing unique and strategically important capabilities, you can set your organisation apart from competitors more effectively.
The cornerstones of your organisation
Capabilities remain stable over time and provide a reliable anchor when change is on the horizon. They help determine where to invest, which processes need support, and which applications or data sources fall short.
See capabilities, therefore, as the cornerstones of your organisation: they give structure to strategy, business architecture and digital transformation.
A bridge between strategy and value
Capabilities describe what your organisation must be able to do, sustainably, to turn strategy into value for customers and stakeholders.