Capabilities-driven strategies: Thriving in a tough economy

Last week my company held it’s kick-off meeting for the 2009 season and one of our big topics was innovating our capabilities. Processes, standardization, skills, tools, etc. are necessary if we are to outpace our competition. A few days after our meeting I came across an article from Strategy+Business that discussed the topic in depth (see article here or click here for PDF). To me there are so many reasons that focusing on your capabilities-driven strategy is far more important than focusing on better improving your product to the nth degree (most companies that are built and run by “technician minded” people tend to focus on continually improving the product vs. delivering the product, thus their companies tend to remain a “ma and pa” shop.)

Let me give you an example of capabilities-driven strategy from a great book (E-myth Revisited) that sums it up so well. “Most of us could build a better hamburger than McDonalds, but few (if any) of us could build a better system for delivering those hamburgers than McDonald’s.”

McDonald’s capabilities and skills in process, marketing, standardization and so forth are what makes it such an efficient company. A better capabilities strategy is also why so many companies thrive and others don’t. If a company can outpace its competition through greater understanding and clarity of their capabilities-driven strategies then they are likely to be able to thrive even in a tough economy!

Have a peak at the article, it’s a great resource for learning and improving your capabilities-driven strategies and getting a jump on outpacing your competition in 2009.