Understanding capabilities and their importance in planning
Before we dive into the specifics of capability-based planning, it’s important to understand what we mean by “capability.” We use business capabilities in Enterprise Architecture to focus management attention on improvement and expertise. In TOGAF, a capability is simply defined as “an ability to do something”. If follows that a business capability represents the ability for a business to do something.
Capabilities describe “what” not “how” something is done. In Business Architecture, capability is a powerful shorthand. We hide all the complexity and detail. Using capabilities, we don’t have to explain how, why, or where the business uses the capability. No explanation of people, organization, skills, etc. is required. We simply talk about the capability.
We move the conversation from specific potential improvements to a core set of questions:
- What things do we need to start doing
- What things we need to stop doing
- What things do we need to keep doing well
- What things do we need to improve how we do them
Capability Map
Best-practice capability-maps are not comprehensive lists of everything an organization needs to do. Instead, we focus attention on strengths or advantage that your organization possesses. The set of particular skill set, a specialized process, or a unique resource that sets you apart from your competitors.
A capability map is a visual representation of the capabilities required to achieve your business objectives. It’s an essential tool for aligning your resources with your strategic goals and unlocking your business potential.
Identifying and using capabilities to meet your goals is key to effective planning. By focusing on what your organization needs to do best, you can optimize your resources and investments to achieve the greatest impact.
You will enterprise architecture capabilities
Advantages of capability-based planning
So, what makes capability-based planning such a powerful tool? There are several advantages to this approach, including:
Alignment with organizational strengths
Capability-based planning is all about leveraging your organization’s unique strengths to achieve your goals. By focusing on what you do best, you can optimize your resources and investments for maximum impact. Aligning your capabilities and strategy can help you reach your objectives effectively.
Flexibility and adaptability
One challenge with traditional planning approaches is that they can be rigid. Once a plan is in place, it’s difficult to make changes or pivot in response to new information or market conditions. Capability-based planning is flexible and adaptable. By focusing on your core capabilities, you can adjust your approach as needed to respond to changing circumstances.
Competitive advantage
By leveraging your unique capabilities, you can create a competitive advantage that sets you apart from your competitors. This could be a particular process that allows you to deliver products or services more efficiently, a specialized skill set that allows you to offer unique solutions, or a resource that gives you a distinct advantage in the marketplace.
Capability-based planning vs. traditional planning
So how does capability-based planning differ from traditional planning approaches? The biggest difference is the focus on capabilities rather than objectives. Traditional planning starts with a set of objectives and then works backwards to identify the resources and processes needed to achieve those objectives. Capability-based planning, on the other hand, starts with an assessment of your required organization’s strengths and then identifies the strategic goals that can be achieved by leveraging those strengths.
Another key difference is the level of detail involved. Capability-based planning is less granular than traditional planning. Rather than disassociated improvements, you focus on specific capabilities and how they can be leveraged to achieve specific objectives. This level of detail can make it easier to focus on the resources and investments needed to achieve your goals.
The most important difference is Capability-based Planning is like an Architecture Roadmap.
Like an Architecture Roadmap, a Capability Roadmap will help answer the following questions:
- When will value be delivered – Transition States
- What change to pursue given different criteria – Architecture Roadmap Type 4: Scenarios
- What work will deliver value, and the cost and uncertainty – Architecture Roadmap Type 1: Heatmap
- When work, change, and value delivery will occur – Architecture Roadmap Type 2: Lifecycle
- What is the dependency & impact of work and change – Architecture Roadmap Type 3: Work Package
- What decisions are deferred – Architecture Roadmap Type 4: Scenarios
- What kind of change are we pursuing – Implementation Strategy
Assessing and prioritizing capabilities
The first step in capability-based planning is to develop a capability-map. Then use the map and assess your organization’s capabilities. We typically assess capabilities by 2-4 attributes. In Navigate, we maintain a set of attributes we select from:
- Competency
How good we are relative to our peers - Performance State
How complete to best-imagined capability is desired - Efficiency
How much output we get for a unit of input - Fitness
How well the capability aligns with expectations - Automation / Repeatability
The level of automation (where systems do the work) or repeatability (where the work is done production-line style - Agility
The level of unexpected threat or opportunity (Change) the capability must be able to adapt to - Maturity
Strict CMMI Maturity assessment—the ability to manage and control the capability - Operating Model
Is the Capability Unified, Replicated, Coordinated or Diversified - Performer
Who delivers the capability—internal, division, partner, vendor
Navigate Capability Properties
For a complete discussion of assessing a capability see our Business Architecture Capability Assessment Guide.
| Navigate Property | Choices | |
| Competency | Superior Better than 90% of peers <5% of all activitiesAdvantage Better than 75% of peers <10% of all activitiesParity As good as 50% of peers >85% of all activities |
Specifies which capabilities are critical in differentiation. Requires an understanding of peer ability.
Is not a measure of quality. Parity can have very high standards. Party simply isn’t where an organization invests to differentiate. |
| Performance State | Examining Individual delivery is happens Emerging Experiencing |
Specifies the probability that an organization will always deliver to expectation. |
| Efficiency | 5 (High)
4 3 (Medium) 2 1 (Low) |
Specifies the expected efficiency measured by how many resources (people, energy, money) are required to deliver the outcome, or product. |
| Fitness | 5 (High)
4 3 (Medium) 2 1 (Low) |
|
| Performer | Staff
Contract Business Partner Customer Not Applicable |
Specifies design constrains based on who performs the capability.
Critical capabilities can be drawn from 3rd parties. |
| Agility | High
Medium Low Not Applicable |
Specifies the expected need to respond to external threats and opportunities. |
| Automation | 5 (High)
4 3 (Medium) 2 1 (Low) |
Specifies the level of automation. |
| Maturity | 5 (Innovating)
4 (Predictable) 3 (Standardized) 2 (Managed) 1 (Initial) |
Specifies the level of management control and monitoring. |
| Operating Model | Unified
Replicate Diversified Coordinated Not Applicable |
Specifies base service operating model |
Identify the difference between your current capability and the desired target. Identify what capability attribute needs to be changed.
Capability-based planning drives consistent improvement.
Start by asking questions like:
- What skills or expertise do we have that are hard to find in the market
- What processes or technologies do we use that give us a competitive advantage
- What resources (e.g., equipment, facilities, intellectual property) do we have that are difficult or expensive to replicate
The diagram below is a quick example of enterprise architecture capabilities using the EA Capability Reference Architecture. We see the basic operating model of the EA Team.
Once you’ve identified the potential improvements, you’ll need to align improvements to outcomes, cost to improve, and risk. Best practice is ensuring your Business Architect’s work with the rest of the EA Team. Improving one thing won’t create an improved capability.
Capability-based planning is a foundational activity to develop a good architecture roadmap. All good roadmaps are based on the minimum change to reach consumable value. The minimum change is packaged as work packages that reach transition stages, where value is consumable. Every organization has more potential improvements than it can complete. Winnowing weak change ideas frees resources for successful changes.
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Steps for implementing capability-based planning
Once you’ve identified and prioritized your capabilities, it’s time to implement capability-based planning. Here are some key steps to consider:
Define your strategic goals
The first step is to test the alignment of your prioritized capabilities with your strategic goals. We assume you have a solid strategic goals. Strategic goals aligned with your overall mission and vision.
Map your capabilities to your goals
Once you have your strategic goals in place, you’ll need to map your capabilities to those goals. This involves identifying which capabilities are most relevant to each goal and how they can be leveraged to achieve it. Use the initial assessment in the Capability Map.
Frankly, best-practice capability-based planning will adjust your capabilities or goals based on this mapping exercise.
Align your resources and investments
With your goals and capabilities mapped out, it’s time to align your resources and investments accordingly. You know which capabilities lead to which strategic goals. You know the type of improvement (Competency, agility, efficiency, etc.). You know what needs to be improved (skill, process, etc.).
Identifying the changes needed for each goal and assigning them appropriately. When you are looking at the capability, you will see the need to change your organizational structure, processes, or technology. You have a consolidated set of potential changes aligned to value. You are ready to build a Capability Roadmap.
Develop a Capability Roadmap
The Capability Roadmap exercise, like developing an Architecture Roadmap, requires further winnowing of potential changes. The process of winnowing requires stakeholders to perform trade-off and selecting transition states.
Trade-off compares the four aspects of change – value, cost, uncertainty, and option. Measure value and cost of change using criteria that matter to our stakeholders. Successful trade-off requires understanding:
- Dependency between the set of changes. (Work Package & Gap dependency
- Value, effort, and risk associated with each change and work package
- How stakeholder priority and preference adjust in response to value, effort, and risk of change
The best capability-based plans built to transition states (also called Value Resting Points and Capability Increments). A transition stage is a step toward improvement. A step where you can stop, change your attention, and still receive harvestable value.
It is important to winnow potential changes. Remember your organization has more potential improvements than it can accomplish. You are looking for the minimum set of changes that deliver the most value on the journey towards a strategic goal. Never defend weak improvement ideas. The moment an idea looks weak, winnow it out. Hunt for chaff! Kill weak ideas! Then, celebrate your victory! Celebrate that you are enabling successful change!
Many possible changes fail key tests. Look for changes that are:
- Too much work for the return
- Success is too uncertain for the return
- The change is not directly aligned with improving a capability
- The change doesn’t lead to an increment where you can stop work and harvest value
Frankly, best-practice capability-based planning will adjust your capabilities and goals. Your Capability roadmap will be optimized to value. It will be filled with transition states. Remember, every transition is a future decision.
Monitor and adjust your Capability-based Plan
Finally, it’s important to monitor your progress and adjust your plan as needed. Capability-based planning delivers flexibility through transitions and increments. When you reach a transition stage, further decisions are required. An implementation plan should never go past a transition state. Transition states are where the Stakeholders make informed decisions about when and how to adjust your plan.
We think of transition states as off-ramps on the Capability-based Plan. Stakeholder will exercise an off-ramp for two reasons:
- The work to reach the next value resting point exceeds the current assessment of value.
- The work to reach the next value resting point could be used on a different change that delivers a more exciting or rewarding resting point.
Conclusion
Capability-based planning is a powerful tool for organizations looking to achieve their strategic goals. By identifying and leveraging your unique strengths, you can create a competitive advantage and optimize your resources and investments for maximum impact. Capability-based planning can help business leaders advance their strategies. So why not try it and see what results you can achieve?
If you want help, consider a Enterprise Architecture Capability Roadmap
Enterprise Architecture Capability Reference Architecture
Download the Enterprise Architecture Capability Reference Architecture. It is the foundation of building a solid enterprise architecture team.
Your Enterprise Architecture Capability model is central to an optimized enterprise architecture capability framework.
