An organization deploys capabilities to execute its activities. Some of these capabilities are critical to survive and thrive. In three easy steps, you can determine objectives to steer the development of critical capabilities in your organization.
Steps to determine objectives
Determine objectives for developing a particular capability in your organization as follows:
- Identify the advantage the capability would bring.
- Determine the direction for developing the capability.
- Set the priority of developing the capability.
Advantage
To identify the advantage that a particular capability would bring to your organization, you can perform a VRIO analysis to determine four relevant properties of the capability:
- Valuable: able to exploit opportunities and defend against threats.
- Rare: scarce and difficult to obtain.
- Inimitable: hard to copy or substitute.
- Organized: set up to capitalize on organizational resources.
Together with information about its presence in your organization, you can use the outcomes of the VRIO analysis as follows to identify the advantage a particular capability brings:
Direction
Determine a course of action for developing a particular capability in your organization as follows:
- No advantage: ignore (if not present) or disinvest (if present).
- Competitor’s advantage: acquire so it will be present in your organization.
- Competitive parity: specialize so it will be rare in the market.
- Temporary advantage: unite with other capabilities so it cannot be imitated in the market.
- Unused advantage: secure in your organizational design.
- Strategic advantage: maintain in your organization.
Priority
There are several ways to prioritize activities. What is best depends on your way of working. When pursuing Agile, set a priority for developing a particular capability as follows:
- Now: do this first.
- Next: do this second.
- Later: do this after the second.