Capitalizing on Capabilities
Companies command respect today not on how they are structured or managed but upon their actual capabilities: their ability to innovate. The ability to respond to the clients ever changing needs is a key intangible asset. Such ‘organizational capabilities’ are not assets which can be seen or touched but have a massive impact on your market value.
These capabilities—the collective skills, abilities, and expertise of an organization—are the outcome of investments in staffing, training, compensation, communication, and other human resources areas. They represent the ways that people and resources are brought together to accomplish work. They form the identity and personality of the organization by defining what it is good at doing and, in the end, what it is.
While people often use the words “ability,” “competence,” and “capability” interchangeably, we make some distinctions. In technical areas, we refer to an individual’s functional competence or to an organization’s core competencies; on social issues, we refer to an individual’s leadership ability or to an organization’s capabilities.
Organizational capabilities emerge when a company delivers on the combined competencies and abilities of its people “human capital”.