One capability often sets leading companies apart from the rest. Here’s how to build yours.
The term “capability” gets thrown around quite a bit and means different things to different people. Often it refers to individual capabilities—the skills of individual employees and the company’s efforts to build those skills through learning and development. But the retailer we described did something well beyond that: it built what we refer to as an institutional capability. What do we mean?
Simply put, it’s an integrated set of people, processes, and technology that creates value by helping the company consistently do something better than competitors. An institutional capability should derive from the corporate strategy, of course. It must involve work that is integral to the company and the industry; it can’t be a gimmick. Done well, such capabilities become a lasting edge, leading to consistent outperformance and growth in competitive advantage over time.