The Capability Outcome Power of Five
This article will build on information discussed in preceding capability blogs and show how to construct an effective capability management roadmap – one that enables astute companies to focus their efforts, resources and time so as to get their biggest bang for their buck in the shortest period of time.
We call this the Capability Outcome Power of Five…
Step 1: Build Your Capability Outcome Structures
As described in our previous blog – How to Build Business Capabilities – we need to define the capability outcome for each capability. Keep in mind that it is possible to have multiple capabilities associated with one capability outcome. Similarly a capability could be related to more than one capability outcome.
This is what that meta-model looks like:
Step 2: Identify the Top Five Capability Outcomes
With a group of highly experienced subject matter experts (SME’s) focus attention on the top five capability outcomes. We achieve this by looking for high return-on-investment (ROI) capability outcomes that will be able to be resolved in the short to medium term, providing the biggest positive impact to the organization.
This is normally accomplished by creating a spreadsheet on a whiteboard with the above mentioned elements.
Place all the high level capability outcomes in the first column on the board. Then for each capability outcome determine:
- Can this capability outcome be achieved in the short, medium or long term?
- What will the impact on the organization be once this capability outcome is achieved – high, medium or low?
- What current pain is felt within the organization by not achieving this capability outcome – high, medium or low?
- What is the ballpark cost to achieve this capability outcome – high, medium or low?
Before going through this exercise, first agree with the team what high, medium and low means. So, for example, some companies have defined short term to mean between 1 and 4 months, medium term 5 to 9 months, and long term anything exceeding 10 months.
Once rated, the top five capability outcomes are easy to identify. We are looking for the top 5 capability outcomes that will:
- Have the largest positive impact on the organization – both soft and hard
- Be able to be achieved in the shortest period of time
- Require the least amount of capital and effort to achieve, and
Resolve the largest areas of pain felt within the organization
Next, in order to convey a clear depiction of the results, this information could be turned into a useful management graphic.
Using the graphic below as an example, the capability outcome XYZ seems to be the first obvious candidate to pursue, being: High pain felt by it not being achieved, with a short term achievement window, with positive high impact on the organization upon achievement, that has a low estimated achievement cost.
At Confiance we prefer focusing on just the top 5 capability outcomes (hence the name), but there is nothing wrong if an organization prefers to look at the top 7, 10 or more.
In this fast moving business environment, people are so absorbed in the day-to-day running of the business that few have the time, inclination or tools to identify large ROI business opportunities.
But by consciously embarking on an exercise like this, the benefits speak for themselves. Any executive would jump at the opportunity to be able to have a clearly defined list of projects that will enable the organization to reap sizable low hanging fruit in the short term with minimal effort & cost.
Furthermore this exercise will not only also identify medium to long term opportunities, but also what projects to avoid due to: high cost, low impact benefit, minimal pain reduction and long term resolution period.
Confiance would be delighted to guide you through a Capability Outcome Power of Five workshop to experience the numerous advantages of undergoing such an exercise.