(Part two of a series on the forces helping to drive a tactical to strategic transformation of the PMO.)
To be truly successful, every organization must have a well-articulated strategy. And it’s crucial that this strategy be tightly aligned with an execution plan. But for many, there’s still a significant gap between strategy and execution. Organizations struggle to bridge this gap because they lack the clarity required to focus on the capabilities that will help them achieve their strategy.
Capabilities, of course, are the things that a company uses to create its products and serve its markets – things like business processes, people skills and technology. Successful companies understand that there’s a direct relationship between their investment in strategic capabilities and the success that they achieve. This concept is core to truly aligning strategy with execution.
Something else happens when an organization focuses investments and resources on the key business processes it uses to create, produce, sell, and deliver its products or services. Those strategic capabilities are transformed into a competitive advantage – something every organization must have to be successful.
But it’s not always obvious which business processes are strategic. Identifying them requires creativity, insight and, most importantly, a capability model to help clarify the relationships between strategy, demand, supply and execution. Beyond clarifying an organization’s business structures and relationships, a capability model also helps the organization focus its attention on prioritizing investments and managing execution costs.
Now that we understand the connection between capabilities and strategy, we can identify which capabilities are strategic, and how those capabilities relate to the organization’s investment programs. Armed with this new holistic perspective, the next thing to think about is prioritization.