Like a living organism, businesses exist in dynamic environments where continual change and evolution is required not only to survive, but also to thrive. To effectively adapt and differentiate, leaders in companies must look at their markets and consider how they will guide their organizations to a distinct and sustainable place where they can thrive. The better leaders chart a course that is differentiating, identify and deliver unique capabilities and align resources, the better they will be able to rise above the competitive crowd.
Strategy and capabilities are inexorably linked.
While this topic might not seem relevant to HR executives, the reality is that HR executives are often the ones best positioned in organizations to help leaders see and understand the limitations in capabilities and resources and align people, processes, and technology to the strategy of the organization. So instead of focusing on setting strategy, HR executives can help leaders achieve optimal organizational alignment by:
- Establishing the value they offer shareholders
- Determining the resources and capabilities needed to deliver that value
- Making and acting on choices that support successful delivery of value
There are several ways you can align your capabilities and resources with your strategic goals:
- Determine your strategic capabilities. Your organization has many capabilities. These are made up of processes, systems, and talent. Identifying which capabilities best support your desired outcome will enable you to make aligned organization choices that lead to differentiation. For example, at one technology firm we worked with, they had an uncanny ability to design simplicity and ease-of-use into their systems. Even though they had robust functionality, they found ways to make their system intuitive and easy for users. As a result, they constantly gained favorable reviews and new users who were looking for systems that were easy to use and train. The capability of designing intuitive systems was not accidental, it was understood, intentionally designed into their organization and reinforced in how they worked and operated as a company.
- Use your strategic capabilities to differentiate your company. Being able to offer capabilities that set you apart from your competitors is a critical advantage. To do this effectively, you need to clearly identify the market niche your company is filling or creating, and diligently identify, build, and exploit new capabilities to strengthen your unique positioning in the marketplace.
- Be willing to shift resources. Strategy looks to the future; capabilities are aligned to the past. New or different demands that get placed on processes, systems, people, and practices create strain on the current structure and necessitate shifting revenue and/or other resources from one area of the business to another to align with future strategic plans. While it may be necessary to implement cost cutting measures, be sure to do so with surgical precision so as not so undermine the strategic, differentiating capabilities that are needed to maintain a winning position. Stay focused on the areas that have the biggest strategic impact and concentrate your capital investments there.
- Analyze the work as it relates to your strategy. Shifting resources will require that you examine and reorganize work within your organization to maintain the ability of work and people to deliver strategic value. This restructuring process is not the first step in organization alignment; however it is often a necessary step in order to accomplish your strategic plans. When determining which work to retain and which to allot resources, give priority to that which is core to your strategy and differentiation. When necessary, consider streamlining or even outsourcing work that is not central to the strategy.
Your results follow naturally from your how you align your organization and resources to drive strategy; the results you are currently getting are a reflection of how you have aligned your organization and strategic capabilities. If you want different results, you will need to realign or develop capabilities and resources in new and differentiating ways. In the process of advancing your strategic planning efforts, you will inevitably develop goals and objectives that will create benchmarks to measure success along the way and help you focus your efforts to implement your plan.
Strategy and capabilities are inexorably linked. If your resources and capabilities are not aligned with your strategy, your strategic planning efforts will amount to little more than wishful thinking, rather than achievable plans that lead to the successful evolution of your company.