Solutions Page - Targeted Capability
What are Strategic Capabilities?
On this webpage you will find an overview of how we assist clients to develop the strategic capabilities required to execute their chosen strategies. According to Hubbard, Rice and Galvin(5), strategic capabilities are:
“Those capabilities that create value for customers, are better than the capabilities of most competitors and are difficult to imitate, substitute or replicate.”
Of course, there are many areas of generic or fundamental knowledge/skill which need to be in place for the organisation simply to keep it's head above water. These are usually a "given", a "ticket to play" if you like. They are often referred to as "Core Competencies". Harrison Consulting is more than accomplished at delivering such base level (or "101") capability improvements.
In isolation however, these skills are rarely enough to deliver a sustainable strategic capability. Even sharpening two or three linked skills may not be enough to build strong customer relationships, and outflank competitors. According to Treacy and Wiersema(12), (page 44):
“Each value discipline requires a company to emphasize different processes, to create different business structures, and to gear management systems differently.”
We introduced this model in Video 1 on our Strategy Execution page (Click here or navigate via "Solutions" in the top menu). We believe Value Disciplines to be one of the most useful current frameworks for understanding the ways in which to create and capture customer value.
Below, with acknowledgement to Treacy and Wiersema(12), (page 44), we reproduce their framework of strategic capabilities for each of the three value disciplines. We work with our clients to identify the target capabilities they need to strengthen, in light of their overall strategic discipline, and set KPIs for our engagement.
On this webpage you will find an overview of how we assist clients to develop the strategic capabilities required to execute their chosen strategies. According to Hubbard, Rice and Galvin(5), strategic capabilities are:
“Those capabilities that create value for customers, are better than the capabilities of most competitors and are difficult to imitate, substitute or replicate.”
Of course, there are many areas of generic or fundamental knowledge/skill which need to be in place for the organisation simply to keep it's head above water. These are usually a "given", a "ticket to play" if you like. They are often referred to as "Core Competencies". Harrison Consulting is more than accomplished at delivering such base level (or "101") capability improvements.
In isolation however, these skills are rarely enough to deliver a sustainable strategic capability. Even sharpening two or three linked skills may not be enough to build strong customer relationships, and outflank competitors. According to Treacy and Wiersema(12), (page 44):
“Each value discipline requires a company to emphasize different processes, to create different business structures, and to gear management systems differently.”
We introduced this model in Video 1 on our Strategy Execution page (Click here or navigate via "Solutions" in the top menu). We believe Value Disciplines to be one of the most useful current frameworks for understanding the ways in which to create and capture customer value.
Below, with acknowledgement to Treacy and Wiersema(12), (page 44), we reproduce their framework of strategic capabilities for each of the three value disciplines. We work with our clients to identify the target capabilities they need to strengthen, in light of their overall strategic discipline, and set KPIs for our engagement.
Imre Hegedus(13) goes further, investigating the Value Disciplines model "from the outside in", and linking business processes to customer value creation. Hegedus states that the value disciplines are (or should be) based on three differing sets of customer expectation, and that the enabling and supporting processes should start with these expectations, rather than the "inside-out" orientation of many business people. He sees this requirement as a significant paradigm shift.
We could not agree more. With our strategic marketing heritage, we firmly believe that the path to sustainable competitive advantage lies in an almost obsessive focus on customer needs and requirements. Thus, we explore with our clients how they gather client "intel", how they assess its significance, and how it leads strategy and execution. As Drucker famously stated:
"Marketing is the whole business... seen from the Customer's point of view"
Zacharias, Nijssen and Stock(14) identified that Treacy and Wiersema's work offered little guidance on value capture capabilities, despite their emphasis on customer value. For this reason, these authors conducted a robust piece of research across 110 organisations and 242 individuals, to correlate each value discipline with the strategic capabilities and processes necessary to establish lasting advantage, as measured by customer loyalty. They divided resources and capabilities into value creation and value capture, as shown in the table below. See page three, section 2.2 of their paper for more detailed explanation of relational and intellectual market-based resources.
We could not agree more. With our strategic marketing heritage, we firmly believe that the path to sustainable competitive advantage lies in an almost obsessive focus on customer needs and requirements. Thus, we explore with our clients how they gather client "intel", how they assess its significance, and how it leads strategy and execution. As Drucker famously stated:
"Marketing is the whole business... seen from the Customer's point of view"
Zacharias, Nijssen and Stock(14) identified that Treacy and Wiersema's work offered little guidance on value capture capabilities, despite their emphasis on customer value. For this reason, these authors conducted a robust piece of research across 110 organisations and 242 individuals, to correlate each value discipline with the strategic capabilities and processes necessary to establish lasting advantage, as measured by customer loyalty. They divided resources and capabilities into value creation and value capture, as shown in the table below. See page three, section 2.2 of their paper for more detailed explanation of relational and intellectual market-based resources.
Their work offers general support for the Treacy and Wiersema model, and conclusions are summarised in the table below, in terms of their ability to deliver lasting customer loyalty. These findings provide a great starting point for discussions with our clients, as we embark upon strategic capability interventions.
Zacharias et al - Summary of Key Findings:
- General support for value disciplines model
- Successful market leaders pursue one dimension to a high level...
...whilst performing at least at market requirement on the other two - In time we would expect to see more leaders in two dimensions to emerge
- For all three types of market leaders, the focus on customer value is part of the corporate culture
- For product leadership firms, exploration and intellectual market-based assets are critical
- For operational excellence firms, exploitation and relational and intellectual market-based assets are critical
- For customer intimacy firms, adaptation and relational and intellectual market-based assets are critical.
