Business change happens somewhere at the intersection of hard and soft leadership — across a continuum between strategic and tactical management that can easily feel like a maze of competing factors.
Operational capabilities bring together systems, processes, data, knowledge, talent, skills, resources, and both tangible and intangible assets. Organisations are characterised by how they build distinctive ways to deploy, allocate, and coordinate those resources to create value and sustain competitive advantage. Capabilities are what businesses can do as a result of teams working together; data is the input and output, processes and tools are the enablers connecting the dots between data and teams.
Implementing new capabilities involves continuous business alignment and change management to ensure effective adoption. A key challenge in appraising them is maintaining objectivity — considering relevance against the business plan and/or the NPD plan, alongside the organisation's ability to change.
Not everything needs to be best-in-class or state-of-the-art, which is why prioritisation matters. Business maturity and agility are also key. Creating new capabilities isn't simply about team-building or adding more resources. As Segal-Horn (2004) put it: "Capabilities involve complex patterns of coordination between people, and between people and other resources." Capabilities are, in essence, routines — or sets of interdependent routines with different maturity levels: operating governance and core processes, combined with supporting tools and IT platforms.
This article covers what it takes to build credible holistic business change roadmaps and the considerations essential to implementing new operational capabilities successfully.
Business capability assessment
Business improvement often starts with a capability map and a maturity assessment. The guiding questions cover a wide territory:
- What does the business do, and how well does it do it?
- How does it create value today, and how does it want to create value tomorrow?
- How does the organisation operate, internally and with its suppliers and customers?
- What currently works and what doesn't — and why?
- What are the core and supporting capabilities that characterise the business's way of operating?
- What is its market position, and what are its core competencies?
- How does it derive competitive advantage and respond to external change forces?
- How do teams collaborate and exchange data and information?
- What are the key deliverables and decisions across the product development lifecycle, and how do these link to data quality?
- How does the organisation learn?
- What is the current organisational design and operating model?
- How does the business deal with internal change?
- What is its relative maturity, and what's the ambition for the future?
Both strategic and tactical considerations come into play when assessing capability durability, transparency, transferability, appropriability, and replicability. It's a question of weighing future capability needs against immediate problem-solving — short-term effectiveness and efficiency against long-term competitive advantage. Process and behavioural models such as CMMI can, as White (2021) puts it, "help organisations streamline process improvement and encourage productive, efficient behaviours that decrease risks in software, product, and service development."
Implementing new operational capabilities
According to Porter's generic strategies model, organisations have three basic options for gaining competitive advantage: cost leadership, differentiation, and focus (Porter, 1985). These shouldn't be seen as ends in themselves. Operational excellence, product leadership, and customer intimacy are the kind of indicators leadership teams use to determine whether their underlying strategies and change initiatives are actually working.
Capability and business-change assessment are often combined with capturing improvements and new requirements, guiding stakeholders toward pragmatic, feasible solution elements. Useful questions include:
- What are the expected outcomes and benefit case for the target business scenario, user stories, and use cases?
- How complex is it, and which stakeholder groups and personas are most affected?
- What will the solutioning process look like — who's involved, how, and when?
- Can we demonstrate the intent through a proof-of-concept to help key users understand the solution?
- What's the deployment and data-migration strategy, in the context of the initial MVP scope?
- What are the key internal and external interdependencies, and how do they integrate into the overall implementation roadmap?
- What will be addressed through process versus digital solution elements — bearing in mind the system won't fix everything?
- What needs tailoring to the business specifically, and what's the effort to make and sustain that?
- How will quick wins be positioned — will they be quick fixes, and will they serve their purpose without hindering the next maturity steps?
- What will the learning curve be, and is the business ready for it?
- What education and change management will maximise value realisation?
- How does this fit alongside other business imperatives and wider change initiatives?
- In the interim, how will the change initiative(s) affect the sustainability of ongoing operations?
Requirements might be captured through interviews, discovery workshops, awareness sessions, proofs-of-concept. Whichever route, they always need to link back to tangible business scenarios and use cases. Specific user stories relate to specific persona perspectives and needs, and feed into the business change roadmap.
Navigating the business change roadmap
Assessing and implementing business change is an integral part of any new-capability plan, regardless of the type, maturity, or industry of the organisation. To be effective, though, it needs to fit across the organisational footprint and cultural context.
The ability to change links to the organisational culture: how people are onboarded, how they learn or are allowed to learn, how change is implemented (from simple continuous improvement to more transformational change), how people are rewarded, how success and failure are managed, how decisions are made, how the organisation communicates across functions, how business priorities are informed, etc.Grealou, 2019
Mature organisations with established NPD governance and processes often need focused product data management (PDM) execution support to drive process acceleration, operational efficiency, and cost reduction. That's also a skills and talent-development question — adopting new agile-engineering approaches and leveraging good data.
Start-ups, by contrast, typically begin with the PDM capabilities that are essential for a successful launch, without trying to do it all at once. In both cases, it comes down to knowing the right questions to ask, when — while anticipating possible answers to build a robust foundation for development and improvement.
The business change roadmap needs to allow room for experimentation and learning along the way, while addressing ongoing or new problems. Challenged programmes typically look to fix disruptive data-quality problems and give stakeholders the accurate, up-to-date information they need — when and how they need it — to fulfil their role effectively. That also relieves the workplace frustration and stress caused by inaccurate data and dysfunctional processes, which in turn earns back the stakeholder trust needed to continue the journey.
What are your thoughts?
References
White SK (2021); What Is CMMI? A Model for Optimising Development Processes; CIO.com. https://www.cio.com/article/274530/process-improvement-capability-maturity-model-integration-cmmi-definition-and-solutions.html
Grealou L (2019); First Change The People, Then The System; virtual+digital. http://virtual-digital.com/first-change-the-people-then-the-system
Segal-Horn S (2004); The Strategy Reader, 2nd Edition; Wiley-Blackwell.
Porter ME (1985); Competitive Advantage: Creating and Sustaining Superior Performance; New York, The Free Press.
