Capabilities are the developed and inherent characteristics of people to get things done, basically abilities times capacity. Only individual people have capabilities. Others can experience, measure, or observe the results of people’s capabilities but they can't directly develop or mobilize capabilities. Firms, institutions, and other organizations get their capabilities directly from their people.

Generally, capabilities are evaluated in terms of what people do and what they have. “Success” is defined as doing highly valued activities and having highly valued activities items. Individuals’ values define their concepts of success, which determines the capabilities they will seek to develop. But, fundamentally, capabilities enable people to be successful as they are doing and having things they value.

What you do and how you do it is culture. People create culture as they apply their capabilities in coordination. Culture reflexively shapes capabilities as people act in particular contexts, adopt the local values, and become known to others who have and do similar things. Great culture is unlocked by the two keys: shared understanding and time on task, which also happen to be critical for learning!

In the context of organizations, capabilities, like other resources, should be assessed relative to requirements, which flow from particular business functions and overall purpose (see our last post, "Customer Value and the Value Chain" for more on purpose). Shared understanding of requirements, which enables people to develop valued capabilities, starts with executives and other leaders.

Effective leaders add to, detail, and expand understanding of requirements by sharing their knowledge with others. Executives define what an organization must do and have to be successful. They link required capabilities to purpose,and communicate it to others who then add details as they act on and communicate those requirements farther.

Needs are requirements minus available resources. This arguably over-simplistic view helps focus on barriers, constraints, and gaps that must be avoided or eliminated—a key executive function (aligning resources to customer value, that is, as discussed in the first post in this series). Constraint, gap, or needs analysis should focus on purpose, while considering individuals’ capabilities and motivations across the value chain. The most effective, efficient, and equitable way to do this is by collaboration, specifically participatory planning.

The key to development and learning is time on task. Practice makes permanent but not necessarily perfect. Feedback and models are required for effective learning. The most efficient learning integrates new “know how” and “know that” into prior knowledge via practices that methodically expand, improve, and increase.

People must understand workforce requirements—they must know what they need to know—in order to develop useful, valuable capabilities. As we get clearer personal and shared awareness of available and needed capabilities, we get closer to developing or finding them. People must have a holistic view of requirements to orient themselves vis-a-vis others and their personal and shared purposes.

Workforce development is essentially an individual, personal activity, but it is necessarily linked to society-wide factors. The collective results of individuals' development determine how organizations and whole economies operate. While learning is inherently social and can be standardized, the process of developing capabilities is necessarily fully distributed to individual people. (Read that again. It's really important!) Executives must recognize and embrace this fact if the organizations they lead are to succeed. The implications are quite profound.

The practical implication is that (1) leaders must be a source of understanding about required capabilities. People need to know what capabilities organizations have and need, current and future, as customers, employees, partners, and other stakeholders, to be successful. Leaders are, by definition, those who provide this information. Also, (2) leaders must create opportunities and situations for people to apply their capabilities with clear guidance and support. This is basically what a “learning organization” does. It is group time-on-task. The two roles—providing understanding and creating opportunities—feed into and support each other. Organizational learning and workforce development are necessarily an iterative processes as (1) enables (2) informs (1) enables (2), etc.

Think about it. Do you see this in your organization? If not, you have problems.

In the next post we identify simple steps to accomplish these two things—shared understanding and time on task. Then we will dig into the state of technology, how to effectively plan for it and incorporate it into strategy. Stay tuned!

by Greg Laudeman