Getty getty Several years ago, colleagues from my old consulting firm, the RBL Group , wrote about a clever way to convert business goals into a plan of action and investment. Plenty of consultancies talk about the difficulty and importance of effective implementation plans. But, these colleagues, Dave Ulrich and Norm Smallwood, in an HBR article called “capitalizing on capabilities” took a different approach. Ulrich and Smallwood focused on organizational capability as a critical missing link between vision and outcome. Think of capability as the extension of “competency-based management” at the organizational level. Here’s how Ulrich and Smallwood described the role of capability in business performance and value: “Capabilities—the collective skills, abilities, and expertise of an organization—form the identity and personality of the organization by defining what it is good at doing and, in the end, what it is . They are stable over time and more difficult for competitors to copy … They aren’t easy to measure … but these capabilities give investors’ confidence in future earnings.” They pointed out research by Baruch Lev who studies capabilities from an intangible assets perspective, and who found that company valuation is forward looking based on investor’s confidence in future earnings e.g., their ability to continue to grow and thrive. That ability is what organizational capability is all about. Lev put it this way : “Intangible assets—a skilled workforce, patents and know-how, software, strong customer relationships, brands, unique organizational designs and processes, and the like—generate most of corporate growth and shareholder value. They account for well over half the market capitalization of public companies. They absorb a trillion dollars of corporate investment funds every year. In fact, these “soft” assets are what give today’s companies their hard competitive edge.” I find it helpful to think of organizational capability as a bundle of skills, investments, process choices, IP, analytics, performance measures, and other resources. Aligning these activities and assets to create capability is the goal; they must work together. Different strategies, in turn, rely on different bundles of capability: Amazon , for example, is all about deepening its relationship with customers and grows by providing new ways to serve its retail and business customers. By contrast, e-commerce marketplaces like Overstock or Wayfair rely on their ability to source and distribute the right remaindered home goods that can be sold at a profit. Exxon Mobil , my old employer depends on excellence in risk management as they invest billions in the search for new old and gas reserves. In short, different companies with different strategies means different capability bundles. The link between strategy and capability bundles is equally important for talent marketplaces. Different platforms – marketplaces and social networks – have different strategies and, therefore, may require different capability bundles: The “big three” platforms, Freelancer.com , Fiverr.com or Upwork.com offer the broadest possible set of freelance services and price range . Kolabtree is laser focused on a particular service category; in their case R&D scientists. LifeSciHub in pharma clinical project management and Spacely.work […]
