capitalizing on capabilities
Post on 19-May-2015
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CAPITALIZING ON CAPABILITIES
Presented by
Amritanshu Kumar Singh
11DCP062
"Our only limitations are those which we set up in our minds or permit others to establish for us."
– Elizabeth Arden
Capability defined
Capability represents the identity of your firm as perceived by both your employees and your customers.
It is your ability to perform better than competitors using a distinctive and difficult to replicate set of business attributes.
Capability is a capacity for a set of resources to integratively perform a stretch task
Purpose
Ulrich and Smallwood assert that :-
a capabilities audit can make capabilities visible and
meaningful to companies’ stakeholders. This article describes
what a capabilities audit is and gives a step-by-step method on
how to conduct audit.
Building Capability through Leadership Attributes
Leaders are responsible for building organizational capability.
You need the ability to translate organizational direction into
roadmaps, vision into action, and purpose into process.
To do so, you must demonstrate at least five abilities:
To build your organizational infrastructure;
To leverage ability;
To deploy teams;
To design human resource system, and
To make change happen.
Organizational capabilities
X Individual Organizational
Technical An individual’s functional
competence
An organizations core competence
Social An individuals leadership
ability
An organizational capabilities
Organizational Capability Explanation
Ways to evaluate/track this capability
1 Talent Talent is the organizational capability that attracts, motivates and retains competent and committed people.
Productivity measures, retention statistics, employee surveys, and direct observation.
2 Speed This is the ability to recognize opportunities and to act immediately. Acting quickly can refer to exploiting new markets, creating new products, establishing new employee contracts, or implementing new business processes.
How long it takes to go from concept to commercialization, or from the collection of customer data to changes in customer relations; A return-on-time-invested (ROTI) index can monitor the time required for, and the value created by, various activities.
3 Shared Mind-Set & Coherent Brand Identity
This is the organizational capability that ensures that employees and customers have positive and consistent images of and experiences with an organization.
The degree of alignment between internal and external mind-sets; Measuring the degree of consensus among employees when they are all asked what the top three things are that the company wants to be known for in the future.
4 Accountability This is being good at obtaining high performance from employees. Performance accountability becomes an organizational capability when employees realize that failure to meet their goals would be unacceptable to the company.
Examine the tools you use to manage performance (i.e., appraisal forms, variance in compensation based on employee performance, etc.)
Contd.
5 Collaboration This is working across boundaries, ensuring efficiency and leverage. “Collaboration occurs when an organization as a whole gains efficiencies of operation through the pooling of services or technologies, through economies of scale, or through the sharing of ideas and talent across boundaries”.
Calculate a company’s break-up value;
Compare the break-up value to the current market value of the assets.
6 Learning This is generating and generalizing ideas with impact. New ideas can be generated by benchmarking, experimenting, continuously improving, etc.
Look at what other companies are doing; Hire or develop people with new skills and ideas.
7 Leadership Being good at embedding leaders throughout the organization. Consistently producing effective leaders is generally an indication of a clear leadership brand.
You can track your organization’s leadership brand by monitoring the pool of future leaders.
8 Customer Connectivity
Building long-lasting relationships of trust with certain customers. When a large number of employees have meaningful exposure to or interaction with customers, connectivity is enhanced .
Identify your key accounts and track the share of those important customers over time; Frequent customer-service surveys may also offer insight into how customers perceive your connectivity.
Contd…
9 Strategic Unity
Articulating and sharing a strategic point of view. There are three levels of strategic unity: intellectual, behavioral and procedural (p. 122).
Note how consistently employees respond when asked about the company’s strategy.
10 Innovation Doing something new in both content and process.
A vitality index (for instance, one that records revenues or profits from products or services created in the last three years) (p. 122).
11 Efficiency Being good at managing costs. Inventories, direct and indirect labor, capital employed, and costs of goods sold can all be viewed on balance sheets and income statements
Audit process
The five basic steps Explanation
1 Determine which part of the business to audit. Division, region, entire company, etc.
2 Create the content of the audit. Tailor the 11 generic capabilities to your own organization.
3 Gather data from multiple groups on current and desired capabilities.
90-degree, 360-degree, or 720-degree assessments*
4 Synthesize the data to identify the most critical capabilities requiring managerial attention.
Look for patterns in the data; Determine the three capabilities needed to deliver on your company’s goals.
5 Put together an action plan with clear steps to take and measures to monitor, and assign a team to the job of delivering on the critical capabilities
Education/Training events, new performance standards, new technology to sustain the capability are all ways to take action
Lessons learned
Get focused Recognize the interdependence of capabilities Learn from the best Create a virtuous cycle of assessment and investment Compare capability perceptions Match capability with delivery Avoid underinvestment in organization intangibles Don’t confuse capabilities with activities
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