Organizational capabilities refers to the abilities of a company or organization to effectively complete its work, meet its goals, and adapt to changes.
Having strong organizational capabilities is crucial for success in any industry.
Importance of organizational capabilities
- Gaining competitive advantages
- Adapting to changes
- Driving business results
How HR teams can help build organizational capabilities
- Engage leadership
- Define and list your organizational capabilities
- Conduct an organizational capabilities assessment
- Understand the capability gap
- Prioritize and create an action plan
- Track progress and follow up
Examples to define and list your organizational capabilities
- Organizational culture
- Vision, mission and value shape the organization’s identity and support its development
- Employees’ mindsets help them function well
- Effective communications promote teamwork and allows cross-functional collaboration
- Leadership performance and effectiveness
- A clear and decisive leadership brand exists with clarity of thought and communication
- Reasonable judgement on people
- Leadership qualities remain consistent throughout teams
- Strategy alignment
- Consistently invest in the practices and procedures required for strategy development and implementation.
- All employees understand the organization's business strategy and why it's important.
- All employees recognize how their role supports the strategy.
- Innovation
- Focusing on the future, not the past.
- Willingness to reconstructing parts of the organization.
- Processes that can accommodate something new.
- Agility
- Skilled and knowledgeable employees who are ready to adapt.
- Prompt decision-making processes that don’t rely on bureaucracy.
- Planning ahead and adapting to competition or unexpected events.
- Flexible systems and workflows that can accommodate the organizational change process or expansion.
- Talent
- All employees have the necessary skills and tools to do their current jobs.
- All employees are committed to doing their jobs well and consistently.
- Having ability to keep good employees motivated and on board.
- Learning and growth are supported and encouraged.
- Customer connectivity
- Committed accountability to customers.
- Strong customer data collection and analytics.
Another way to categorize the organizational capabilities
- Operational capabilities
- Strategic capabilities
- Dynamic capabilities
- Context capabilities
- Core vs no-core capabilities
- Behavioral vs structural capabilities
