The Capability Operating Model™ enables organizations to translate strategy into both stable and dynamic components through continuous transformation at four distinct levels: Strategy, Governance, Cross-Functional Teams, and Functional Teams.
Stable Component: Business Capability Building
Business Capabilities are the essential abilities an enterprise must possess to achieve its mission and strategic objectives. Capability building incorporates People, Process, and Technology, leveraging agile and waterfall delivery practices as appropriate. While business capabilities are stable, their relative importance may shift over time, requiring periodic reprioritization of investments in capability building.
A simple enterprise architecture such as the one below could capture the essential business capabilities (vertical), and IT enterprise capabilities (horizontal).
Value Streams are captured through the integration of business capabilities across the value chain, aligning the flow of activities that create value for the enterprise.
Dynamic Component: Innovation and Discovery Engine
To ensure that strategy remains dynamic, we propose an Innovation and Discovery Engine that quarterly identifies and implements new experiments along the following outline:
Identify the strategic context
Assess required business capabilities
Identify three experiments based on the two steps above
Implement the identified experiments in parallel during the quarter
Incorporate the results into the strategy and capability-building reprioritization
Continuous Transformation at Four Distinct Levels
Our approach to building the above-described operating model is through continuous transformation, activated simultaneously across four distinct levels, as shown in the diagram below.
These levels are not hierarchical or sequential, but rather integrated levers that operate in unison to drive sustained change and execution alignment.
