How to assess your firm’s organizational capabilities, so you can reinforce the crucial ones? Conduct a capabilities audit: Identify the two or three capabilities most essential to carrying out your strategy, uncover gaps between actual and desired performance on those capabilities, and devise a plan for improving them. Intangibles influence corporate success far more.

Don’t ignore them in favor of tangible, easy-to-quantify assets like facilities and equipment. These capabilities reflect your workforce’s collective expertise and define what your firm does best.īut to strengthen organizational capabilities, you have to measure these notoriously difficult-to-quantify assets. How to strike back? Strengthen your organizational capabilities-intangible, hard-to-copy assets such as leadership, efficiency, and innovation.

Rivals everywhere are seeking to blunt your strategic edge. In short, it helps turn intangible assets into concrete strengths. It enables executives to assess overall company strengths and weaknesses, senior leaders to define strategy, midlevel managers to execute strategy, and frontline leaders to achieve tactical results. In addition to highlighting which intangible assets are most important given the organization’s history and strategy, this exercise will gauge how well your company delivers on its capabilities and will guide you in developing an action plan for improvement.Ī capabilities audit can work for an entire organization, a business unit, or a region-indeed, for any part of a company that has a strategy to generate financial or customer-related results. So you can determine how your company fares in these categories (or others, if the generic list doesn’t suit your needs), the authors explain how to conduct a “capabilities audit,” describing in particular the experiences and findings of two companies that recently performed such audits. Organizations that fall below the norm in any of the 11 are likely candidates for dysfunction and competitive disadvantage.

Such companies typically excel in only three of these capabilities while maintaining industry parity in the other areas. Although there is no magic list of proficiencies that every organization needs in order to succeed, the authors identify 11 intangible assets that well-managed companies tend to have: talent, speed, shared mind-set and coherent brand identity, accountability, collaboration, learning, leadership, customer connectivity, strategic unity, innovation, and efficiency. By making the most of organizational capabilities-employees’ collective skills and fields of expertise-you can dramatically improve your company’s market value.

Capabilities brief template