Define Core and Supporting Capabilities
Once you have engaged stakeholders and gathered input, the next step is to identify and document the core organisation capabilities. A organisation capability defines what the organisation needs to do to function and deliver value, not how it gets done or who does it. Capabilities are stable over time, unlike processes or personnel, which frequently change.
What to Do
-
Start with core capabilities: Core capabilities are the primary functions that directly contribute to delivering the organisation’s products or services. For example, in a manufacturing organisation, capabilities like “Product Development” and “Supply Chain Management” would be core.
-
Identify supporting capabilities: Supporting capabilities enable the core capabilities to function. These include areas like HR, IT, and Finance. While not directly related to the end product or service, they are essential for smooth operations.
-
Use stakeholder input: Review the information you gathered during stakeholder sessions to ensure that all necessary capabilities, both core and supporting, are captured. Verify the list with relevant department heads or SMEs to confirm completeness.
Things to Consider
- Keep it high-level initially: Start with broad capability categories (e.g., “Customer Management”), which you can break down into sub-capabilities later. This makes the model easier to manage and refine during the early stages.
- Include outsourced capabilities: Remember, any organisation function that is outsourced (e.g., payroll, IT support) still needs to be represented in the model. Outsourcing does not change the fact that these are essential capabilities.
Potential Issues
- Overcomplicating the model: At this stage, focus solely on high-level capabilities. If stakeholders mention specific tasks or processes while discussing the organisation, note them, but avoid adding them to the model. Use them only as context to better understand the capabilities, but keep the model stable and focused on high-level capabilities.
- Missing critical capabilities: Be cautious not to overlook key capabilities that might seem peripheral but are essential to the organisation’s long-term functioning, such as regulatory compliance or data management.
Break Capabilities into Sub-Capabilities
What to Do
- Identify sub-capabilities: Once the high-level capabilities are defined, break them into sub-capabilities that provide more detail on the organisation’s operations. For example, “Customer Management” could break down into sub-capabilities like “Customer Onboarding” and “Customer Support.”
- Group related capabilities logically: Ensure that the sub-capabilities are grouped logically under their parent capabilities. This helps create a structured and easy-to follow model.
- Prioritise based on organisation needs: Focus on capabilities that are critical to the organisation’s operations and long-term goals. Prioritising ensures you invest time in the areas that matter most to the organisation.
Things to Consider
- Tailor to the audience: Depending on the intended users of the model, decide how detailed your breakdown needs to be. For non-technical audiences, two levels of capabilities are often sufficient, while technical users may require more detail.
- Avoid mixing process or system details: Capabilities should describe what the organisation does, not how it does it. If processes are discussed during capability identification, document them for context but do not include them in the model. Similarly, do not include IT systems in this step, as they will be handled in separate overlays.
Potential Issues
- Too much granularity: Avoid going too deep into sub-capabilities, as this can overwhelm the model and make it difficult to maintain. Keep the model at a level that offers insight but remains manageable.
- Duplicating capabilities: Ensure that capabilities are clearly defined to avoid duplication. For example, avoid having separate capabilities for “Customer Service” and “Customer Support” unless they genuinely reflect different functions within the organisation.
Next Step: Validate with Stakeholders
Now that the capabilities have been identified, it’s time to validate the model with key stakeholders to ensure it accurately reflects the organisation’s operations and long-term goals.