Capabilities Management-Overview

Capabilities Management-Overview

Performance without capabilities can best be described as steroidal. This chapter provides the context of why building capability is as critical as building performance. It dwells into the difference between capability & performance, core vs. non-core capability, mapping and tracking the capabilities.

Topics in Capabilities Management-Overview : -

Why Capability management is important for making it happen?

Performance management typically works on measuring and tracking the results. It's a well-known and conventional wisdom that current-or-past performance is no assurance for future performance. The Execution as a discipline works extensively on making the business results sustainable and predictable. Building robust and flexible capabilities are core to delivering long-term performance. Organizations have to avoid the temptation of showing a short-term performance surge by giving steroidal shots, to make analysts happy. There needs to be an equal investment into long-term capability building and making money in the short-term.

Capability vs. Performance

Performance is not synonymous with capability. One can have a burst of short-term performance, with minimal capabilities. The capabilities are built with a sense of commitment and perseverance. Performance management is more towards measuring and tracking the outcome or the end-result. Capabilities in most cases strengthen the inputs to the results.

Capability mapping- What you have and what you need

Each business goal should have a diligent assessment of the capabilities needed to deliver both the short-term and long-term results. This will lead to a comprehensive capability list for your business plan and strategy blueprint. This capability list should be mapped against the current capabilities. The gaps need to be rated in terms of criticality, speed, complexity, cost, comparison to competition, level of automation and time over which this gap needs to be closed.

Capability perception vs. reality

While the performance reporting is generally based on the numbers and there are fewer chances for people to have a widely different view on the business performance. Capability as a domain is more ambiguous, as there can be different views on the time & effort needed to build the capability, what that capability will achieve, what capability we currently have and what is the level of reliability by using manual work-arounds.

Core vs. non-core capability

Not all capabilities are needed to deliver results are equally important. One needs to apply the typical prioritization approach for identifying the make-or-break capabilities, and investing more efforts for the same. One can also apply the **core effectiveness %age principle for doing a holistic prioritization.

How-vs-What of Capabilities

A given capability can be achieved in many different ways. For a given capability, one can go for an automation path or keep it as a right mix of manual and automated work. One can go for an ideal capability in one big-bang or achieve it in phases. One can invest into a large base capability platform and then build individual capabilities on it or one can go in a piece-meal basis. How and to what extent one will build a capability is driven by funds, band-width and priority.