The conditions through which strategy becomes action

Bring knowledge of the business into the strategic work

What people know about customers, technology, operations and the organization helps identify possibilities and assess proposed directions. This knowledge needs to enter the work while alternatives are still being considered.

I examine how existing capabilities and the potential to develop them affect the choices available to the business. As the direction takes shape, I assess what it requires of the organization and where further development is needed.

Make the links to results explicit

I examine what the business needs to deliver for its customers, how that contributes to its financial objectives, and what this requires of its processes, skills, knowledge and systems.

These links express assumptions about cause and effect. I examine whether the proposed changes are likely to produce the intended results and how to assess their effects in practice. Each strategic capability connects the result the business needs with the work required to achieve it. Examples include delivering cost-effective solutions with high uptime, translating customer insight into adapted services, or integrating innovation into creative customer solutions. For each capability, I specify the intended result and examine what is needed to deliver it.

Assess how well the capability works

A strategic capability is the organization’s ability to deliver a specific result required by its strategy. It depends on how processes, skills, technology, structure, management systems, culture and behaviors work together.

I examine how a capability contributes to business results and what must be put together to achieve them. Skills and learning are part of a strategic capability, together with the processes, technology and organizational arrangements needed to deliver the intended result.

I assess how well the components work together under the demands placed on the business. The assessment considers the results achieved, how consistently they are delivered and where the capability falls short. The significance of a weakness depends on its effect on the intended result and the circumstances in which the capability must work.

Integrate the capabilities with how the business operates

Capabilities depend on one another and often draw on the same people, information and resources. Even well-developed capabilities can work against each other or be constrained by the way the business is managed.

I examine these relationships together with organization, governance, management systems, incentives, controls, the operating model and mandates. These arrangements extend across capabilities and need to support the business as a whole.

Where execution barriers arise

Within a capability, the quality of its components and how they interact affect the results it delivers. Some weaknesses have little consequence. Others limit the capability as a whole. Across the business, organization, governance, management, incentives, controls and resource allocation affect how well capabilities work together.

I examine the requirements of each capability alongside the organization and management systems shared across the business. A change that helps one capability may create difficulties for another.

Deliver cost-effective solutions with high uptime

In this example, the business needs to meet margin and service-cost objectives while delivering the availability and total cost of use agreed with the customer. Development, delivery, operations and maintenance must work together to produce it, supported by the necessary skills, operating data and technical systems.

If operating data does not reach maintenance teams, the barrier lies within the capability. If those teams have the data but budget targets discourage preventive work, the barrier lies in the supporting system. Both problems may be present at the same time. The diagnostic needs to distinguish these explanations and examine how they interact.

Distinguish the contribution from the whole

A function can meet its own objectives while the capability as a whole falls short of the intended result. Responsibility for a capability extends to the relationships between those contributions and their combined effect on the result.

Responsibility for coordinating a capability needs an explicit mandate. It does not follow automatically from responsibility for one of its components.