Original subtitles

Hi this is Jesper and i make videos on youtube for\h those who like to challenge mindsets and make a\h\h

difference in the workplace i like explaining\h consulting management and data frameworks\h\h

i make youtube videos to explain how to use them\h and today i'm going to explain capability mapping\h\h

a secret framework hidden on google\h search to solve a 50 year old mystery\h\h

computers have been in business for more than\h 50 years but when they were introduced 50 years\h\h

ago another silo was immediately created a silo\h consisted of technology people or technology nodes\h\h

so already from the beginning that started\h to be a bit of a communication problem\h\h

with business people and technology\h people trying to understand each other\h\h

and it hasn't got much better which is quite\h surprising considering the very very big\h\h

leaps and bounds that were made in\h terms of technology in the last 50 years\h\h

but today busy strategy and i.t strategy are still\h misaligned and quite frankly dysfunctionally so\h\h

the problem is different language and different\h terminology a business may you terms like growth\h\h

market share profit productivity and the business\h goal may be to increase productivity if you are\h\h

a manufacturing company for example from 50\h 000 units per year to 100 000 units per year\h\h

a corresponding it goal or technology goal may\h be to increase system availability from 99.5 to\h\h

99.7 percent or to ensure that all calls that\h are taken on a help desk are answered within 15\h\h

seconds instead of 30 seconds all kind of it\h goals tend to revolve around something to do\h\h

with the service level this tends to be the\h essence of many technology strategies today\h\h

simply to keep the lights on and making sure the\h systems are working and available when needed\h\h

but there is no significant connection between\h business and technology goals and considering\h\h

the increasing importance of digital and\h digital technologies this is concerning

digital companies often called digital disruptors\h are emerging everywhere what makes them different\h\h

is the ability to use technology and how\h to align business and technology outcomes\h\h

hence it is critical to incumbent organizations\h to better align technology and business operations\h\h

and strategies to remain competitive and this is\h where capability mapping comes into the picture\h\h

it creates a new view of the organization that\h both business and technology can understand\h\h

and it provides a common language so both\h can be understood so if you want to be hero\h\h

solve the 50 year old mystery and bring capability\h mapping into your organization but wonders how\h\h

well then i've got you covered and in four\h simple steps i'm going to explain and show\h\h

you how you can become an expert we're going\h to talk about what capability mapping is\h\h

and we're going to talk about why it's\h different and why to use for white so good\h\h

we're going to talk about how it works by\h unpacking a real case study and actually\h\h

looking at the real capability map and lastly\h i'm going to share some of my own experiences\h\h

and practitioner trips so that you can learn as\h quickly as possible and get up to speed as quickly\h\h

as possible and go out there and practice how does\h that sound let's start and if you like what you've\h\h

seen so far please hit the like and subscribe\h button below so i can make more of these videos\h\h

so let's start with capabilities a capability\h describes what an organization does at its core\h\h

capability mapping is used to identify\h capabilities needed for an organization to\h\h

execute on its strategy and run its operations it\h has three core benefits firstly it is easy to use\h\h

and practice as you will see in example shortly\h second its static it doesn't change often so\h\h

once you have invested a time to develop it it\h stays current with very little upkeep and third\h\h

as i mentioned previously it provides a language\h that with business and technology can understand

there are actually several other benefits i'm\h talking about the core benefits when it comes\h\h

to mapping business and i.t strategy but there\h are a number of business benefits in their own\h\h

right that i'm going to touch on throughout\h this video surface is fantastic why aren't\h\h

more people using it well that's a million\h dollar question it's not that it's hidden\h\h

if it's hidden it's hidden in plain sight well\h regardless of reason or other people may or\h\h

may not be using it don't let it stop you from\h using it in your organization to do great things\h\h

let's look at some simple rules behind capability\h mapping firstly it is not an organizational\h\h

structure although as you will see in the second\h it might look like an organizational structure\h\h

because it looks like a hierarchy but they are not\h the same and the answer very different questions\h\h

language is important a capability is always\h expressed as a noun whereas for example a process\h\h

is expressed as a verb for example a\h capability might be product development\h\h

whereas the process would be develop product\h another important rule is that capabilities\h\h

are unique they are atomic and they cannot\h be replicated regardless of how large the\h\h

organization is they can only exist once and once\h only it's not like a geographic organization that\h\h

may have the functional structure and the\h processes duplicated in three regions in\h\h

the capability map regardless of the organization\h the capability can only exist once and once only

because it focuses on what the organization does\h rather than how it does it it remains static and\h\h

resistant to change for example an organizational\h structure will not affect the capability map\h\h

the only thing that affects a capability map\h if there is a major shift in our strategy\h\h

so how is the capability map developed these are\h the core steps yet depending on purpose the status\h\h

may vary slightly let's unpack each stage in\h more detail before jumping into a case study\h\h

first we map current business\h capabilities using a structure-like format\h\h

high-level capabilities go on top which are then\h broken down into more granular capabilities second\h\h

current capabilities are rated in how well or\h not they support the organization this forms\h\h

the current state view and is often shown as a\h heat map third to support the strategy capability\h\h

uplifts are identified including new capabilities\h needed this forms the future state view and is\h\h

also often shown as a roadmap fourth capability\h uplifts and new capabilities are prioritized which\h\h

creates a business roadmap and fifth the business\h roadmap is mapped against applications and systems\h\h

existing and you which generates an i.t roadmap\h which forms the basis of an i.t strategy\h\h

voila we have done it we have made the\h connection between business strategy and\h\h

i.t strategy with this background on capability\h mapping we cannot apply it in the real world\h\h

edison cars a pioneer in hydrogen propulsion\h builds 50 000 cars annually this ceo has\h\h

recently given the leadership team the goal of\h increasing production to 100 000 cars annually\h\h

within the next two years the ceo has also given\h the leadership team the task of coming up with\h\h

the transformation plan in three months the\h leadership team has decided to use capability\h\h

mapping and business architecture as a tool and\h framework for developing the transformation plan\h\h

it is well known in the business that the\h major obstacle to increased production\h\h

is the lack of i.t systems technology systems\h and the integration with the rest of the\h\h

organization and with outside ecosystem the\h leadership team developed the capability map\h\h

based on their own terminology they were using in\h their business and in that industry and the high\h\h

level capabilities were product management build\h management marketing management dealer management\h\h

after market management procurement management and\h the bundled all of the corporate functions like\h\h

finance i.t and hr into corporate management\h product management were further divided into\h\h

research management concept development\h design management estimating management and\h\h

pricing management product management is often\h referred to as level zero capability because\h\h

it's a top level capability whereas the next level\h capabilities referred to as a level 1 capability\h\h

and each level 1 capability was\h further decomposed into more granular\h\h

level 2 capabilities and this is our starting\h capability map for the rest of this case study\h\h

next the leadership team conducted a current\h state assessment of all existing capabilities\h\h

to understand how well they supported the\h current operations after understanding the\h\h

current state capabilities the leadership team\h next wanted to understand what capability uplifts\h\h

and new capabilities were required to\h double production to 100 000 cars annually\h\h

next the leadership team prioritized\h capability uplifts and new capabilities\h\h

once completed they used the prioritized\h capabilities to create the business roadmap\h\h

and finally the business roadmap was used to\h identify new applications application uplifts\h\h

new cloud platforms and network and infrastructure\h uplifts to create the connected technology roadmap\h\h

the leadership team was very happy with the\h technology roadmap but wanted to further\h\h

leverage the investment in capability mapping they\h wanted to understand the organizational impact so\h\h

change management strategy could be developed so\h they mapped each detailed capability against the\h\h

organization to understand the organizational\h impact of the transformation roadmap\h\h

it also provides a number of\h other benefits for example\h\h

it identifies inefficient and\h duplicated processes influences\h\h

organizational restructures by identifying\h silo and inefficient use of human resources\h\h

and lastly it informs investment decisions by\h identify the capabilities that are most needed\h\h

to affect or to support an organizational strategy\h and now i'm going to share practitioner tips and\h\h

my own experience and observations having\h practiced capability modeling for many years\h\h

and the first one is if the organization is\h not familiar with this concept start small\h\h

start with a function or a group it is not ideal\h but very difficult to start capability modeling\h\h

with a big bang approach unless you have a\h ceo or someone that is really keen to do it\h\h

find a good use case or a good problem to solve\h nothing is more powerful than using capability\h\h

mapping to solve a real problem especially if\h the problem is something the organization has\h\h

struggled with in the past find a great sponsor\h and this is really important find someone in the\h\h

business that can see the benefit of this and\h need it so a good sponsor in the right function\h\h

of the organization is a fantastic start it's\h easy to fall into the trap analysis paralysis\h\h

stop at level 3 or level 4 capabilities\h going deeper than a level 4 capability\h\h

is most often not useful so stop at level 4. so\h what are your technology choices supporting this\h\h

well they're not that many you have two types of\h software you have the more cheapest software like\h\h

your microsoft vco which i tend to use myself or\h you have the more expensive software like your\h\h

ice solver that connects the entire enterprise\h architecture stack which is horribly expensive\h\h

and it's a very long investment in terms of\h learning and really coming up to speed so\h\h

in terms of software they not that much choice i\h tend to go on the live trend using things like vco\h\h

if you want something free and draw io is a great\h little technology tool for this kind of stuff\h\h

overall my advice is again like everything\h start small use simple technologies and if\h\h

it takes off in the organization then you can\h consider investing into one of these enterprise\h\h

grade management software tool sets and lastly\h love frameworks or hate frameworks there are a\h\h

number of business capability frameworks out there\h already that can be very useful to get started\h\h

certainly very useful in the beginning to show the\h business how it looks like and how it works but at\h\h

the same time adopting a framework early on can\h make us a little bit blindsided put on blinkers\h\h

and may not result in the best capability map for\h the organization so i do use them sparingly in\h\h

the beginning to show the business to explain but\h when i start the capability mapping itself i like\h\h

to start from a clean slate and one thing that's\h very important is to try to use the language of\h\h

the business because they need to own this and be\h part of this so to use that language is critical\h\h

but in terms of frameworks what i've done\h is to list in the description of this video\h\h

three or four of the industry leading frameworks\h most of them are free one of them is not but you\h\h

will all see that in the description so good luck\h with everything and if you have liked this video\h\h

please like and subscribe and i look forward to\h seeing you in my next video take care until then