Develop Organizational Capabilities
How is it possible for the organization to become more competitive by means of developing organizational capabilities?
Organizational capabilities are more than tangible values. These are the functional, technical and practical assets and disciplines that help drive competitive advantages. When developing organizational capabilities the focus is put on increasing service efficiencies and effectiveness i.e. by managing the utilization of resources against service demands. This includes development of the most effective and efficient service systems by focusing on increasing the value added service activities at the same time the non-value added activities are eradicated.
Establishment of service standards and guidelines will help provide unified services, clear accountabilities and right focus at the lowest cost. The metric system helps to track current performances and enables managers to take fast and correct actions on time, if performance is out of track. The first step is to understand how effectively the organization responds to new challenges and facilitates changes all the way to implementation and follow up. Fact based assessments generate full understanding for the current performances about where the company currently is! After assessing the current organizational capabilities there will be capability and skill gaps that must be filled. Developing organizational capabilities is to strengthen the ability to facilitate a change that creates competitive advantages by focusing on exceeding customer expectations. Exceeding customer expectations is a team commitment by working in collaboration performing transformational changes that create competitive advantages, sustained over the long-term.
Organizational Capabilities Definition
The service chain cannot be stronger than the weakest link. The question is how is it possible for the organization to become more competitive by means of developing organizational capabilities of; people, work processes, systems and tools and design of more effective organizational structure and knowledge and metric system?
Develop Organizational capabilities objective is to integrate people, processes, systems and tools, organizational structure, knowledge and metric systems that proactively manage the business through changes which create competitive advantages.
People: They are the most important assets in the whole process, only they can make a change happen. Therefore, it is crucial to hire, develop, train and reward the best people towards building a winning culture that focuses on creating continuous competitive advantages. People are valuable assets that need proactive training, coaching and development to facilitate business strategies to execution. Consistent employee performance evaluation improves business performances where the job is evaluated, targets are set and individual training and development programs are jointly planned.
Work processes, systems and tools: The organization must focus on the core activities and if non-core line activities draw to much resource they should be eliminated. Process mapping helps identify the non-value added activities. The aim is to increase service qualities through use of best processes, systems, technology and tools. A focus on “more for less” by increasing the value added service activities as a result of eradicating the non-value added activities are most effective to improve the overall business performances. Integration of work processes and taking advantages of best in class technologies drives systems efficiencies and service levels. The optimal design can leverage technology innovation by supporting new ideas that aim at increasing efficiencies, effectiveness and the customer satisfaction levels.
Organizational structure: To cultivate clear “customer in center” focus the organizational structure should consist of few organizational layers to achieve easy access to the top management levels. Powerful marketing department, research and development including technical support and collaboration are among few organizational capabilities that must cross-function to facilitate and sustain a change. The organizational structure can help to develop focus through the balanced system and should therefore reflect the company’s strategic intent at each time point in the business journey. The decision making process and problem solving process must as well be organized through clear role-sort definitions and job descriptions.
Knowledge and understanding: Consumer information is ultimately the driver of all changes. The organization must cultivate clear business strategies throughout the whole organization leading to transformation that focuses on the key issues and initiatives at each point in the business journey. The organization must be equipped with the best knowledge and understanding to create the right focus and winning cultures. Training and coaching focus is a large part of building effective organizational cultures. Thus, employees are encouraged to take immediate action and ownership at different circumstances to add more values to the total system. A strong framework that proactively facilitates a change increases the flexibility to react fast and effectively to new consumer needs. Therefore a marketing system needs to be in place that facilitates a change from the Master Planning all the way through implementation and performance evaluation related to the change. The optimal environment setup leverages creative thinking, sense of urgency and effective collaboration.
Metric system: If you do not measure it, you cannot manage and improve it! The employees must to be equipped with clear, realistic and high level business targets. Therefore, companies have to establish key business indicators metric dash board that is constantly being reviewed, measured and tracked against the actual performance. The variance between actual performance and target is analyzed and corrective action is taken to get performance back into line. The business targets are clear, aggressive but realistic and the sales and marketing related indicators adjusted regularly based on market situational structure and changes each time. The incentive program is aligned with management and employees interests with those of the company by promoting them to maximize total systems values. It is common that sales people get between 60/80 percent base salary and between 40/20 percent incentives which are based on the critical success factors at each point in time.
