Vadim Kotelnikov    

Corporate Capabilities

The Basic Building Bock of Your Firm and the Basis of Your Competitive Advantage

   

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Corporate Capabilities Sustainable Competitive Advantage Business Processes Business Enablers Leaders Team Building and Teamwork Employee Empowerment Knowledge Management People Power Value Chain Management Sustainable Value Creation Corporate Vision, Mission, Goals Shared Values Winning Organization Innovation System Distinctive Capabilities Master of Business Synergies (MBS) Corporate Capabilities: Definition and Characteristics

Characteristics of a Capability2

  • Is built around a tight business focus closely linked to the company's mission and values

  • Is based on value proposition which can be measured in terms of time, value, or cost

  • Is a corporate property, and therefore it is a corporate responsibility to ensure its development and deployment

  • Is broadly based across the value chain

  • Consists of an integrated set of enablers across business functions:

    • Organization's knowledge and skills

    • Business processes and organizational structure

    • Supporting systems and technology

    • Positional assets and/or resources

     

    6Ws of Corporate Growth

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 abilities7:

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Two Fundamental Beliefs

By Andrew Spanyi

An organizational capability approach requires that leaders subscribe to two fundamental beliefs:

  1. Organizations should be designed, led, and managed so that it is easy for customers to do business with the company and create and environment that helps employees to serve customers.

  2. Organizations are complex business systems in which a change in any one component is likely to have an impact on other components. An understanding of critical relationships is essential.

Business BLISS

  

Balanced Organization

5 Basic Elements

Corporate Capabilities (Wood):

9 Signs of a Losing Organization

 

Capability Defined

Capability represents the identity of your firm as perceived by both your employees and 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.

Core Competencies

Capabilities the Basis of Your Competitive Advantage

Through continued use, capabilities become stronger and more difficult for competitors to understand and imitate. As a source of competitive advantage, a capability "should be neither so simple that it is highly imitable, nor so complex that it defies internal steering and control."4 Capabilities grow through use, and how fast they grow is critical to your success.

 

 

According to the resource-based view of the company, sustainable competitive advantage is achieved by continuously developing existing and creating new resources and capabilities in response to rapidly changing market conditions. Among these resources and capabilities, in the new economy, knowledge represents the most important value-creating asset.

The Tree of Business Success

Distinctive and Reproducible Capabilities

The opportunity for your company to sustain your competitive advantage is determined by your capabilities of two kinds distinctive capabilities and reproducible capabilities and their unique combination you create to achieve synergy >>>

Your distinctive capabilities the characteristics of your company which cannot be replicated by competitors, or can only be replicated with great difficulty are the basis of your sustainable competitive advantage. Distinctive capabilities can be of many kinds: patents, exclusive licenses, strong brands, effective leadership, teamwork, tacit knowledge, or trust-based working relationships.

7 Routes To High Profits

Reproducible capabilities are those that can be bought or created by your competitors and thus by themselves cannot be a source of competitive advantage. Many technical, financial and marketing capabilities are of this kind. Your distinctive capabilities need to be supported by an appropriate set of complementary reproducible capabilities to enable your company to sell its distinctive capabilities in the market it operates... More

Master of Business Synergies (MBS)

A corporation that builds on core competencies utilizes skills that combine to strengthen value chains and build greater competitive advantages. This leads to synergies among business units, whereby they become more productive together than independently.  >>>

Coherence

Coherence is the glue that binds various pieces of your firm together, enabling the to act as one. Anyone who wants to achieve solutions to the problems of tomorrow must acquire this vital trait coherence. You cannot realize the benefits of the new business model without this glue that holds together its elements. Coherence is what makes a corporation greater than the sum of it parts... More

7 Dimensions of Strategic Innovation

Systemic Innovation: 7 Areas

The Strategic Innovation framework weaves together seven dimensions to produce a range of outcomes that drive growth.

Core Technologies and Competencies is the set of internal capabilities, organizational competencies and assets that could potentially be leveraged to deliver value to customers, including technologies, intellectual property, brand equity and strategic relationships... More

Creating Competitive Disruption

Blue Ocean vs. Red Ocean Strategy

The principles of competitive disruption can help you create temporary advantage by combining a vision of disruption with the capabilities necessary for disruption, and by obtaining advantage through tactics. The two fundamental capabilities necessary to create disruption are speed and surprise.  >>>

3Ss of Winning in Business

Creating Sustainable Profits: 9 Questions To Answer

Organizational Capability Approach vs. Traditional Functional Paradigm

"In the capability model, senior managers are predominantly concerned with issues about the quality of products and services provided to customers (external and internal), the flow of value-added work, and roles and responsibilities. The dominant view on performance measurement shifts from the traditional focus of actual-vs.-budget to a more balanced model that includes the timeliness, quality, and cost of providing products and services to customers. Allocation and budgeting of resources moves from the traditional practice of individual units vying for resources based on their own needs toward cross-group teams that jointly assess resource needs based on the flow of work needed to create value for customers. Problem solving would seldom involve situations in which unit managers had to compete with each another; instead, organizations would adapt to departmental interdependence, recognizing that issues are best addressed through cross-group problem-solving sessions focused on providing services to customers and the required flow of work."9

MegaChange a New Approach to Organizational Transformation

MegaChange3 is a total systemwide cultural transformation of your organization. It means designing and transforming organizations based on assumptions of human capability rather than limitations... More

Why Change Fails: 8 Common Errors

Success Stories Best Business Practices British Petroleum (BP)

To enhance organizational capability, BP reduced or removed central functions, and business units were empowered to chose their own routes to implement changes. A flat organization was established. The number of management levels was reduced from 13 to 5... More

 

 

References:

  1. "Strategic Management - Competitiveness and Globalization", M.A. Hint, R.D. Ireland, and R.E. Hoskisson

  2. "The Centerless Corporation", Bruce A.Pasternack and Albert. J. Viscio

  3. "Strategy and the Delusion of Grand Designs", John Kay

  4. "Investment in Strategic Assets: Industry and Firm-Level Perspectives", P.J.H.Schoemaker and R. Amit

  5. "MegaChange", William E. Joyce

  6. "Results-Based Leadership", Dave Ulrich, Jack Zenger, and Norm Smallwood

  7. "Strategic Management: Competitiveness and Globalization", Edition 4, Thomson Learning

  8. "Strategic Achievement", Andrew Spanyi