Strategic Planning With A Business Capability Map

Strategy and execution aren’t always as close you think. Business capability mapping creates a shared source of truth based on the CEO’s priorities, or the big picture. Capabilities visually display the essence of business architecture in a way that all stakeholders can understand.

A business capability defines the tasks, systems and processes that must occur for a business to meet its goals. A business capability map or model is a visual display of the structure and hierarchy of an organisation’s defined capabilities.

A business capability map does not provide any nuance beyond naming a capability and relaying its hierarchical position. A capability framework provides levels of competency for the purposes of performance development, workforce planning and strategic L&D.

Defining Capabilities

Consider Current/Future State

Business capabilities should also describe what you have the potential to do. If you’re looking at 3, 5, 10-year plans, consider what capabilities will get you to those goals.

Think Evergreen

Business capabilities should be as stable as possible. If a capability would change if you split up a department, it’s not a true capability.

Decompose Cohesively

When creating levels of sub-capabilities under your core capabilities, you want to think about the business criteria that will make the most sense internally.

Map Building Approaches

Straw-based

Involves starting from scratch and building your map based on internal data.

Whiteboard

Look to industry trends and examples to shape a business capability map around customer needs.

Top-down

Senior stakeholders help define the highest level of capabilities, each of which is decomposed into more detailed levels.

Bottom-up

Business capabilities are defined at the task level.

Structuring & Organising Your Map

1) Organise Capability Groups

Capabilities defined at this level must be as absolute as you can make them.

An objective view means to segment capabilities by their impact on specific strategic outcomes. A value-chain based view looks at the chains of activities that contribute to said strategic outcomes.

2) Define sub-capabilities

Sub-capabilities provide several functions, from offering nuance for organising teams to showing the chain of necessary tasks in a value stream. You don’t necessarily need to have the same number of sub-capabilities under each core capability or capability group.

3) Decompose sub-capabilities

This is mostly seen in larger companies with complex business structures. Sub-capabilities will have their own further decomposition. This level will likely be the most iterative, but it’ll also give you the most insight for activities like heatmapping and capability prioritisation.

Tenets of Good Planning

Involve your business or enterprise architects from the start

The simpler the better – use plain business terms

Make capabilities mutually exclusive and collectively exhaustive

Make it cross-functional; this isn’t just a HR or CEO exercise project

Plan for iterative refinement over time

Remember that your organisation owns these capabilities. What makes you different from competitors in that regard?