Navigating the Pitfalls of Capability Design


Organizational capabilities, the intricate interplay between skills, technology, governance, and processes, form the bedrock of any enterprise, bridging the gap between strategy and execution. Yet, many organizations struggle to effectively define, cultivate, and utilize these capabilities, leading to a host of issues that can hamper performance and thwart growth.

This article aims to shed light on some of these failures and provide insights on how to avoid them, introducing the power of the matrix approach.

1. The Failure of Co-Creation and The Matrix Approach:

Capabilities often fall short when they are not co-created within the organization. When top management develops capabilities in isolation, without engaging supporting functions or consulting the broader workforce, the result can be a capability framework that is impractical, unsustainable, or disconnected from the organization’s day-to-day realities. To counter this, businesses should emphasize cross-functional collaboration and employee involvement in the design and development of capabilities.

Here, the matrix approach comes into play. By placing high-level teams (Y-axis) against the organization’s objectives and ambitions (X-axis), you create an intersecting matrix. This intersection reveals the critical capabilities needed for each team to successfully deliver on their goals and contribute to the company’s broader ambitions. This matrix approach promotes co-creation and facilitates a shared understanding of necessary capabilities across all levels of the organization.

2. Granularity Missteps:

Another common pitfall is failing to attain the right level of granularity when defining capabilities. If capabilities are described too broadly, they might lack specificity, making them difficult to translate into actionable plans. On the other hand, overly specific capabilities may restrict adaptability and stifle innovation. Striking the right balance calls for an understanding of the business’s context, strategic goals, and the nuances of the operating environment.

3. Inadequate Alignment with Strategy:

Capabilities must align closely with the organization’s strategic objectives. However, businesses often struggle to maintain this alignment, especially in a rapidly changing business environment. This disconnect can lead to misallocated resources and efforts, hampering execution and strategic progress. Periodic review of capabilities, in light of evolving strategies, can help organizations stay on the right track.

4. Neglecting Capability Development:

While organizations may spend significant time and resources on identifying and defining capabilities, they often falter when it comes to nurturing and developing them. This could be due to a lack of investment in employee development, poor adoption of technology, or ineffective governance. A commitment to continuous learning, technology integration, and robust governance practices are crucial for fostering capabilities.

5. Overlooking the Human Element:

Lastly, the human element is often overlooked in the context of capabilities. Skills are a critical component of capabilities, and organizations need to ensure their employees possess the right skill sets to perform their roles effectively. This requires a focus on talent management, skill development, and creating a culture that values and encourages skill acquisition.


In conclusion, managing organizational capabilities effectively is a complex task, fraught with potential pitfalls. However, by recognizing and addressing these common failures, and by embracing a matrix approach to defining capabilities, organizations can better position themselves to leverage their capabilities, driving improved execution and strategic success. As organizations navigate the tumultuous business landscape of today, the importance of co-created, well-defined, strategy-aligned, nurtured, and human-centric capabilities cannot be overstated.

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