Capabilities Before Initiatives
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The document discusses the importance of assessing business capabilities before implementing strategic initiatives to ensure successful execution of a company’s strategy. It outlines key principles linking business capabilities to strategic objectives, emphasizing that understanding these capabilities can improve initiative planning and execution. The consulting firm Slalom offers services to help organizations evaluate and strengthen their business capabilities to achieve strategic goals.
Capabilities Before Initiatives
- 1. Capabilities before Initiatives ImprovingStrategyExecution through Capability Definition and Assessment When developing the list of initiatives required to execute your company’s strategy, neglecting to assess the business capabilities required to support that execution can lead to failure. Business capabilities define what your business does, so it is critical to understand how well your company’s capabilities are functioning before committing to a plan of activities that rely on them. Most corporate planning efforts follow a four-step cycle: 1. Strategy 2. Objectives 3. Initiatives 4. Key Performance Indicators The portfolio of initiatives that result from this model, does not fully consider which business capabilities will be crossed, and whether those capabilities are strong enough to support successful execution. These initiatives are more likely to fail due to incorrect or missing scope, change conflicts between initiatives, underestimation of the investment required, or schedule conflicts. While these four basic planning steps are integral to defining corporate strategy and a plan for execution, incorporating business capabilities into the planning process creates a tighter linkage between “what” you want to achieve and “how” you will accomplish your goals. Additionally, defining your business capabilities creates a shared understanding of your business and the changes that are necessary accomplish your strategic objectives. Strategy Objectives Initiatives Key Performance Indicators Traditional Corporate Planning Framework
- 2. CAPABILITIES BEFORE INITIATIVES | SLALOM CONSULTING | 2 Three Key Business ArchitecturePrinciples A deeper understanding of your business capabilities will help you identify your company’s strengths and weaknesses, and point you towards business opportunities that may not have been apparent. Below are three key principles we use to help companies align their business capabilities to their strategic objectives. 1. Capabilities are Stable for any Particular Business There is a fundamental set of capabilities required for a particular organization to conduct business, and these capabilities only change when the underlying business model changes. While the business capabilities are stable, the components that comprise the capabilities – people and organizations, business processes, information, technology, and partnerships -- are frequently changing: Organizations change shape and personnel Processes are redefined and modified Information quantity and delivery mechanisms are increasing Technology is constantly changing and advancing Partnerships are created and terminated Focusing first on what your business does to satisfy customers allows you to identify your key capabilities and assess their health. 2. Strategy Feasibility Depends on the Business Capabilities Linking strategic objectives to the related business capabilities is the first step in determining if your strategy is feasible. By understanding the capabilities required to meet an objective, you can then assess the specific elements of those capabilities - are they developed enough to support the objective or is investment required? Reviewing the linkage between objectives and business capabilities also illustrates where multiple objectives require improvements to the same capability, allowing for more efficient and cost-effective initiative planning and definition. 3. Successful Initiative Planning Requires Understanding Capabilities Your business capability map and assessment are critical inputs into your initiative planning effort because they provide a complete picture of what needs to be done – what investments need to be made to strengthen the people, process, information, and technology components of your business capabilities. The understanding created from defining your capabilities, assessing their strengths and weaknesses, and linking capabilities to objectives gives you a complete portfolio view of what you need to execute to achieve your strategy.
- 3. CAPABILITIES BEFORE INITIATIVES | SLALOM CONSULTING | 3 Capabilities Drive Strategy and Execution Success Successful strategy execution comes from understanding your business capabilities and then aligning the changes that are required to your initiative planning process. By applying this approach we have helped clients successfully drive their strategy execution by: Building capability maps to create a clear mental model of how business satisfies customer needs Creating cross-cutting views of the strengths and weaknesses of business capability, technology and strategy components Understanding current and future states and the gap in between Establishing agreement across stakeholders about what needs to be done We Can Help If you want to improve your strategy execution planning activities, call us. We can help you understand your business capabilities and the improvements they require, working with you to create a roadmap of initiatives necessary to implement your strategy. About Slalom Slalom Consulting brings together business and technology expertise to help companies drive enterprise performance, accelerate innovation, enhance the customer experience, and increase employee productivity. The firm delivers award-winning solutions in areas such as information management and analytics, sales and marketing, organizational effectiveness, CFO advisory, mobility, and cloud through a national network of local offices and major alliance partners, including Microsoft, Salesforce.com, and Amazon Web Services. Founded in 2001 and based in Seattle, WA, Slalom has organically grown to more than 2,200 consultants. The company has been ranked as a Top 10 Best Firms to Work For by Consulting Magazine four times, and earned recognition from Microsoft as a Partner of the Year five times. For more information, visit slalom.com. For more information, contact Annie Ezell Cave Business Architecture anniee@slalom.com 206-349-5669 Sue Alemann Business Architecture suea@slalom.com 425.829.2465 Business Capability Components