I was talking with Dave Ulrich last week about the term capability.  He was reviewing my new book, The New HR Analytics.  He acknowledged the distinction between competence (current skills) and capability (future potential) that I made in the book and suggested he would like to see something about organizational capability.

I consider Dave the master of organizational management.  When I asked him what he thought to be the key elements of organizational capability he answered that capability is what an organization is noted for.  He cited examples such as GE for leadership development, Disney for customer service, and Apple for easy-to-use products. 

In considering this it quickly came to me where organizational capability fits in the HCM:21 model.  It links Step 1: the Strategic Scan with Step 2: Capability Planning.  Once you are clear about what is happening in your market and what you aspire to be, then you can audit your organization’s capability to be that.  In a June 2004 HBR article Dave and Norm Smallwood listed 11 capabilities that can be reviewed to determine which two or three are most important for you:  Talent, Speed, Shared Mind-Set, Accountability, Collaboration, Learning, Leadership, Customer Connectivity, Strategic Unity, Innovation, Efficiency.  The HCM:21 Strategic Scan provides the data on human, structural and relational capital that enables you to carry out an audit of your organizational capability.  Once you have this then you can move to Capability Planning and make the investments in people, structure and technology needed to attain organizational capability.

Dr. Jac