In today’s fast-paced, highly competitive business environment, a company’s capabilities – its ability to execute strategic actions efficiently and effectively – are more crucial than ever. However, traditional models of understanding and cataloging capabilities often fall short. They tend to view capabilities as a list of activities, detached from the broader strategic goals of the organization. This perspective can limit an organization’s ability to adapt and thrive in a dynamic environment.
What if we rethink our approach to capabilities?
Instead of viewing capabilities as standalone entities, let’s consider them as intersections in a strategic matrix. One axis represents strategic outcomes or objectives that the company aspires to achieve. The other axis represents responsibility areas, the ‘team of teams’ that comprise the organization.
The capability lies at the intersection of these two axes – it’s the throughput resulting from specific strategic objectives being channeled through responsibility areas. In this scenario, ‘Product Quality Management’ capability might emerge at the crossroads between ‘Production’ responsibility area and ‘Client Retention’ strategic objective.
What sets this view apart is its focus on alignment and strategic intent. Capabilities aren’t just about ‘what we do.’ They’re about ‘why and how we do it’ in the context of our strategic goals. This approach shifts the focus from tasks and functions to the strategic alignment of resources and actions.
Moreover, it presents capabilities as dynamic entities that evolve, mature, and adapt over time, reflecting the shifting strategic objectives and changes in the operating environment.
Such a view of capabilities is much more in tune with the realities of modern business, where change is constant, and adaptability is a prerequisite for success.
How then do we manage these interconnected capabilities effectively? We propose an approach that views enterprise architecture as interconnected portfolios. Each capability forms a component of a portfolio, and each portfolio aligns with a part of the architecture, from data to infrastructure, to applications, and so on.
Platforms like Scientrix provide a framework for managing these interconnected portfolios. They allow organizations to map out their capabilities, align them with strategic objectives, and adjust them in response to changes in the strategic landscape.
In essence, this approach offers a more holistic, strategic, and adaptable model for understanding and managing capabilities in the modern enterprise. It invites us to look beyond the traditional catalog of capabilities and towards a dynamic, interconnected, and strategy-oriented view of what organizations can and should do to achieve their objectives.