Do you have a clear strategy, and are you aiming to do the right things? Many organisations are working hard to ensure that they have a clear and responsive strategy, and that the whole organisation knows what it wants to achieve. Organisations are often getting much better at investing in the right strategic initiatives, and have started to develop better management approaches to maintain and adjust the portfolio of those initiatives so that strategic value i.e. [return on investment x strategic alignment] is always optimised in the light of the business environment prevailing at the time.

However, a key aspect of such considerations is how well they will be able to drive those initiatives through – and that requires a careful look at organisational capabilities. This is becoming more and more critical for organisations as they seek to develop strategies that not only drive growth in markets and profitability but also greater capital efficiency through, for example, shorter programme/project cycle times, higher project throughput and shorter times from concept to market via broader enterprise-wide innovation and improvement supported by more effective organisational knowledge sharing.

So, how do you measure your organisation's capabilities? If we take growth in sales, a universal strategic objective as an example, business development is a core capability in enabling that. An organisation's skills, knowledge and experience in performing that capability manifest themselves in the roles, skills, people, processes, systems, data and culture of the company in this area - and these elements all need to be identified and managed to ensure the business can deliver successfully.

Once you have identified all of the capabilities required to deliver your strategic objectives, you should ask the following key questions …

Is the business capable of doing the 'next right things' for our strategy?

Any organisational function (e.g. department) can look at its vision for contributing value to the strategic objectives of the enterprise, and can develop a blueprint for how things would work in future if that vision were to be reached. For example, a vision for an enterpris-wide Portfolio and Programme Office may be "to drive and rapidly enable the strategic value that transforms our business", and the blueprint for a specific capability within that function, such as "organisation and governance" could be articulated as needing to reach a state of capability maturity where (a) senior level, active engagement and sponsorship is intrinsic in the culture; (b) more coherent decision making is enabled by clearer roles and responsibilities within and between governance bodies; and (c) the organisation is governed and performance managed to deliver results and strategic value. If you don't have the right roadmap of initiatives in place to achieve the blueprint for each core capability in your organisation, then you are unlikely to be capable of doing the 'next right things' that your enterprise's strategy dictates.

Do we understand our capabilities and how they should be developed?

People are often obsessed with organisation charts when looking at how to position themselves for the future. True, the people aspects of managing change and delivering value are critically important but what is more important is to look more widely at the capabilities of the organisation and how they are orchestrated to deliver results. It is capability – i.e. organisational skills, knowledge and experience – and how it is managed and developed, that is a key foundation for strategic success.

Of course, looking across the entire enterprise at the business model(s) and underlying operating model is the ideal way of ensuring that the strategic initiatives of the business are undertaken and performed in the right way, and these models provide the context for understanding what capabilities are needed now and in the future. However, it is not always feasible to do this in one go, and there is still a lot that can be done to improve and develop organisational capabilities in more specific areas (functions) of the enterprise.

Above, we considered the concept of road mapping, which essentially helps to link the intended progress of capability development in a particular function to the contribution to strategic value of those capabilities. That 'top down' perspective on developing capabilities needs to be combined with a 'bottom up' approach, i.e. one which looks in more detail at capability maturity (how good the capabilities are), ideally using externally benchmarked maturity models that ultimately allow comparison with other organisations.

How good are our capabilities?

There are many capability maturity models around, and most of the more accepted ones tend to define capability maturity as 5 levels, i.e.: Level 1 - awareness of process; Level 2 - repeatable process; Level 3 - defined process; Level 4 - managed process; and Level 5 - optimised process. In these definitions, 'process' is interpreted as a generic term for all the important capability attributes of the organisation. For example, 'P3M3' is a well-known portfolio, programme and project management capability model that segments capabilities into 7 perspectives (e.g. benefits management, financial management, risk management) that guide and define the key capabilities to be looked at. On the other hand, you may wish to adopt a more narrowly scoped diagnosis of capability – for example, if you are looking at the people aspects only, using a competency framework like that available from the Association of Project Management (APM), or developing your own, would allow for a broad assessment of the skills, knowledge and experience of people in the organisation. Whatever model you use, the goal is to understand existing capability maturity levels in your organisation, to the level of granularity that identifies the issues that exist – and particularly the issues that have impact on ability of the organisation to meet its strategic objectives effectively. It is those issues that must be addressed by any capability development roadmap.

How can we improve capability?

With a clear vision and strategy for the business, and a clear understanding of the blueprint for your business i.e. of how your business will operate in future to achieve that vision, it is possible then to produce a capability development roadmap that identifies how quickly your capabilities need to be developed in each of the perspective areas defined by your model. Such a roadmap is often represented as a strategy chart that outlines the blocks of capability that will be delivered to drive up the maturity level over time to achieve the vision and blueprint.

How do we put it all into practice?

Putting together an implementation plan to deliver the capability improvements means clearly prioritising the capability developments according to strategic need. Keeping it simple is usually the most effective way of gaining agreement on priorities across the organisation, and a MoSCoW ('must do'; 'should do'; 'could do'; 'won't do') or similar approach will yield sufficient clarity on priorities to develop the implementation plan.

Remember what is really important - don't leap to solutions before having understood your capabilities, and your development roadmap. Yes, it may be that an organisation re-structuring is necessary, but do it in the context and with the knowledge of how it addresses the most important capability issues, i.e. those with strategic implications. Yes, it may be that you feel you have too many people skilled in one discipline and not enough in another, but again do the groundwork to validate that this is indeed true and that it is strategically important. Otherwise, you are just creating unnecessary distraction, using up organisational resources inefficiently – and ultimately undermining the opportunity for your organisation to succeed.