The Business Capability Alignment Wheel is a quick and effective means to scope and describe what is needed within an enterprise to achieve strategic change. First make sure your team is clear on the Why behind the change and have defined measurable change results. Then you can move to scoping What needs to change using the Strategic Business Capability Wheel.
Step 1 : Identify Strategic Business Capabilities
Start by identifying the corresponding business capability for each change result. A business capability is comprised of what business resources are needed to achieve that business result, bounded by the required capacity and grounded on legal or voluntary guidelines and constraints.
Business resources that make up a capability can be grouped into five categories each represented by a different spoke in the strategic business capability wheel:
- Information; This may be insight, knowledge or data that is needed or generated.
- People; The organization structure & roles, the individual expertise and the culture that will support the successful implementation of the business capability, not only within the enterprise but also externally, including partnerships and the customer’s environment.
- Technology; The technological and manual systems and tools used.
- Infrastructure; The networks, space and other assets required.
- Process. The transactional, dynamic and social processes used to execute the capability both from the perspective of the enterprise and the perspective of the customer. In some situations a capability is fulfilled by a single business process, in other situations multiple business processes are needed to fulfill one capability.
Step 2: Assess the Business Capability Gaps
With the strategic direction clearly articulated and the required capabilities identified, it is quick and easy to perform an initial assessment of the gap between the current results achieved by each capability and the results required to achieve the strategic target. Focus on the capabilities with larger gaps first and rotate around the wheel to assess each business resource, not only for performance, but also for effectiveness in achieving the business result. For example, a organizational process might be performing well but may no longer be the most effective process for achieving the business result given a redefinition of the result or shift in the customer process or a change in one of the other business resources.
Step 3: Prioritize and Scope Strategy Implementation Projects
You now have enough information to effectively prioritize and scope the various projects that will implement your strategic direction. Assemble the business resource gaps into logical groups that can each be effectively addressed by a solution project. Use your business capability and business resource gap assessment to define the scope and rational for each project.
This is a very brief overview of how the Strategic Business Capability Wheel can be effectively used to scope and prioritize strategic initiatives and there is lots of room for adapting the overall approach for your particular situation. The key is to articulate strategic goals in terms of outcomes and results and keep the business capability assessment focused on effective achievement of those results.