Please feel free to watch the video of this presentation at https://youtu.be/1tZYE0SbakE Capability models have a long history. They came out of business schools in the 50ies. In recent years the enterprise- and business architecture communities seem to have taken over, making capabilities more an IT rather than a business modeling concept. Most capability models we've seen fail to achieve their original purpose: to enable business people to design better enterprises - ones that are fit for purpose, efficient, adaptive to change and satisfy customers. In this webinar, Wolfgang Goebl explains the typical flaws of capability models and design patterns for next-generation capability modeling. You will learn: practical patterns to create capability maps that foster a seamless business & IT co-design why most capability modeling efforts fail and how to overcome the usual problems how to connect other elements of the architecture with capabilities - how to run a broad elicitation process with all relevant stakeholders how to use capability maps in corporate management

1. Capability Maps
The Next Generation
Wolfgang Goebl

2. We help people create better enterprises.
INTERSECTION GROUP

3. What went wrong with capability maps?

4. What went wrong with capability maps?
Ugly
Not very present outside
architecture communities
Few practical design patterns
IT centered view

5. What went wrong with capability maps?
"Always based on information objects”
call everything “management”
(product-, claim-, money-, track-, train,...)
“Tennis Racket Management”?
“Tennis Ball Acceleration Management”?
Unnatural language
Capabilities present in IT only
Extremely weak biz & IT alignment

6. What we want to change…
"Always based on business objects”
Serve
Unnatural language
Capabilities present in IT only
Extremely weak biz & IT alignment
Based on highest cohesion
common
everywhere
Seamless busIT co-design

7. Capabilities are
business components
used as a modular “master structure”
of the enterprise.
Organisational- and IT structures
can be derived from this
master structure.
“Modular business components.”
Designed for Digital, J.Ross et.al
What we want to change…

8. Businesses
Outcomes
Activities
People
Things

9. The cells/modular components of the business

10. Buildings
People
Software Assets
Information
Raw Material
Machine
Output
(= product or
intermediate
output)
“What we can do by orchestrating people and assets.
Capability Definition

11. “A thing that is valuable or useful to somebody/something”
Physical
- Machine
- Building
- Raw Material
Information
Software
- Application
- Software Technology
It’s not ALL about software!
Asset

12. Office
Billing Officer
SAP FI
Traveled Route
Electricity
Computer
Bill
“Billing”
“What we can do by orchestrating people and assets.
Capability Example

13. Capability Map Example

14. Capability Design -> Organisational Unit Design

15. Org Units? Activity?
Business Functions? Processes?
The team “billing” has the capability to do the
“billing” and performs the processes/activities
“billing”.

16. Org Units? Activity? Business Functions?
“Organisational Units have business functions capabilities”.
“Organisational Units perform activities”
“Activities are actually performed capabilities”
Only ONE master structure of the business!
Connect process management & capability based design

17. “Related activities our enterprise carries out.”
Process
Process/Activity = actually performed capability
Only ONE way to design boundaries (caps, orga, activities, processes)
Seamless connection of process management & capabilities & org design

18. How to design capabilities? - together what belongs together
When are the groupings “good”?

19. When are the groupings “good” -> Loose coupling
“Cohesion is the degree to which the elements inside a component belong together
for some unifying purpose.”
Loose coupling
Tight coupling

20. When are groupings “good”?
By color?
By size?
By shape?
By species?

21. Example: “Build and Maintain Tracks”
Flattening machine team
Sensor
software
Gravel
Flattening train
Flatten tracks
The asset (flattening train) drives the
capability boundary.
Specialization leads to a thick stable
boundary of the capability

22. When are groupings “good”?
Products/services
Skills/
related activities
Assets
Primary driver of
grouping:

23. Customer Interaction: get in touch with the customer
e.g. sales via various channels, customer services, customer
information;
Operational: create the products
e.g. manufacturing, warehousing, logistics, order processing;
Shared/support: reusable business components
e.g. customer management, marketing, legal, HR, accounting, IT;
Change: enable an enterprise to innovate the other three categories
e.g. product design, strategy/vision, enterprise design.
Capability Groupings

24. More ways to categorise capabilities
Management/Core/Support
Process-driven (Plan/Build/Run/Learn)
Ordinary/Dynamic
Intra-organisational/Outsourced
Innovating/Differentiating/Commodity

25. Brand Product
Organisation
Story
Purpose
Process
Capability
Journey
Task
Channel
Asset
Content
How to design capabilities? - Product oriented!
Startup

26. Brand Product
Organisation
Story
Purpose
Process
Capability
Journey
Task
Channel
Asset
Content
How to design capabilities? - Driven by legacy
Existing Company

27. How to model capability maps
● Use sound categories
● Make products visible
● Group around what offers highest cohesion (e.g. an Object, a Process, related Skills)
● Limit redundancy
● Embrace specialization & reuse
● Use their language (e.g. HR instead of “Manage Human Resources”)
● Focus on essence (~5 level 1, 10-20 level 2, 50-75 level 3)
Buildings
People
Software Assets
Information
Raw Material
Machine
Output
(= product or
intermediate
output)

28. Broad Elicitation Process
Existing Orgchart
Existing
Process/Product
Model
Capability Model
Executive
Board Application
Owners
Business
Experts
B-Level
Executives
Connect bottom-up with top-down design

29. What you’ve learned in this section..
› Only ONE decomposition of the business
› Start from existing docs (org, processes, website..)
› Run a broad elicitation process
› Enable business to own their capability design
› Design for highest cohesion
› Select categories with care
› Layout for beauty
Business / IT Alignment -> BusinessIT Co-Design

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Various backgrounds:
About 30% Enterprise and Business Architects
About 30% Experience, Service and Business
Designers
A diverse group of about 20% other, related
profiles:
Business Analysts, Founders and Executives,
Innovation or Change Agents, Operations and
Process Designers, Organisation Designers and
Developers, Branding and Marketing Experts,
Agilists and Digital/IT Experts, Product Owners,
Industry Experts…
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34. enterprisedesignpatterns.com
Patterns
Journey to impact
Behaviour patterns
Practice patterns
Creations patterns

35. Thank you!
Wolfgang Goebl
wolfgang@intersection.group
www.intersection.group