Designing New CapabilitiesCapabilities are the things that organizations do well and that deliver meaningful business results. They include skills, processes, know-how, and unique ways of using assets and resources. Transformative organizations master the ability to build capability sets that support customer outcomes and give their organization an advantage.
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Think for a moment about a successful company and what it is you admire about it. If you’re like many people, you might start by pointing to the company’s unique and awe-inspiring products or services. Or perhaps you identified an incredibly charismatic leader who has driven the company forward to success.
Because capabilities should be enduring and provide advantages that are difficult to replicate, organizations need to focus on identifying and investing in a set of capabilities that, when layered together, create their unique advantage. These are reasonable answers, and they both can be critical to success. But the question was, what do you admire about the company? When you dig a little deeper, you will likely point out what the organization does well. These things that Walmart, Apple, and other companies excel at are what enables them to be great companies. They are called capabilities. McKinsey defines capabilities as “anything an organization does well that drives meaningful business results.” This includes their skills, processes, know-how, and unique ways of using assets and resources they have developed. Because capabilities should be enduring and provide advantages that are difficult to replicate, organizations need to focus on identifying and investing in a set of capabilities that, when layered together, create their unique advantage. |
Explore this and other topics in the upcoming book Transformative.
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