Strategy Dynamics Briefing 80: Introducing capabilities

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A capability is the ability of the organization, function or team to get something done, and is therefore quite different from resources, both tangible and intangible, that generally do not denote activity. In grammatical terms they can be recognized by the suffix ‘-ing’ or ‘-ment’ – hiring or recruitment, marketing, purchasing, product development and so on. We will define them more clearly in the next Briefing, but let’s start with an example.

What does it mean to have a stronger ...

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Strategy Dynamics Briefing 73: Intangible resources – getting some clarity

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We all know that ‘soft’ factors are important – we need motivation amongst our staff, reputation with potential customers, effective processes to get things done, good data that is up to date, and powerful capabilities for developing products, for example. Unfortunately, there is little agreement in strategy books and articles on what those soft items actually are, the categories into which they fall, or how they can be specified and measured.

We will spare you the review and analysis of ...

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Strategy algorithms beat judgement

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HBR explains how judgement underperforms simple algorithms for many issues – strategy algorithms exist, at least implicitly.

Recent decades have seen human intuition progressively replaced with proven rules, procedures or algorithms for increasingly complex tasks. Long ago, truck deliveries were scheduled by the logistics manager, and airline prices set by pricing staff – both are now automated. And this phenomenon now goes on to more subtle issues, such as bank credit scores, and marketing tactics driven by behavioural insights from big ...

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McKinsey Tests of Strategy

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I’m not a big fan of checklists, but Have you tested your strategy lately? offers useful tests for checking the quality of a strategy. The list also makes some assumptions, and leaves out some vital tests. For example, “Will your strategy beat the market?”  assumes there is a defined market for which rivals struggle for share, but many leading firms create market that they themselves exploit. And test 10 “Have you translated your strategy into an action plan?” assumes that management ...

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Skills and capabilities

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Capabilities clearly enable performance – if your organization can do key tasks, faster, cheaper or better than others, then you will develop stronger resources in a more powerful system than they can. But academic strategy articles on the topic are mostly too abstract to connect with the practical appraisal of skills and capabilities in organizations. So it’s good to see a down-to-earth approach to assessing skills from McKinsey – asking people to evaluate their own needs. But there’s more ...

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