Friday, January 15, 2010

Business Success - Structure or Capability?

In the book "Organization of the Future 2" (Edited by well known leadership developers Frances Hesselbein and Marshall Goldsmith), a chapter authored by Dave Ulrich and Norm Smallwood discusses whether organizations are about structure or capabilities. The authors claim that companies like GE, Disney, Google, and Apple are known for their capabilities and not their structures for conducting business. The authors state...

"Capabilities represent what the organization is known for, what it is good at doing, and how it patterns its activities to deliver value."

This has great application to fostering new thinking on human capital development. The business challenges that organizations face now and in the future, such as speed/context/scope of change, globalization, talent shifts in the workplace, and others, will drive development of key strategic human capital capabilities to overcome these challenges. While the normal inclination in challenging economic environments, like the recession faced in 2008-2009, has been to restructure and cut costs, forward thinking companies made a commitment to establish their organizations for future success coming out of the recession. They did this by focusing on what the environment would look like, opportunities that environment would present and how it would deliver value to its customers.

Organizations like GE, Google and Disney are driving strategies to develop and enhance their competitive positions within their markets. The capabilities required for their competitive advantage are varied, but should focus in a specific area...overcoming human capital challenges to enhancing their competitive positions.

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