A company's right to win in any market depends not just on external market positioning and not just on internal capabilities, but on a coherent strategy that aligns these factors at every level.
Three interlocking elements make up a capabilities-driven strategy.
- Way to Play: How you choose to face the market and create value for your customers.
- Capabilities System: What causes you to choose your way to play and what allows you to deliver on it. This system is made up of three to six distinctive capabilities, the key strengths that set your company apart from its rivals. Each capability is ensured through the right combination of processes, tools, knowledge, skills, and organization, all focused on meeting the desired result.
- Product and Service Fit: Based on your chosen way to play and capabilities system, which elements in your portfolio will grow ... and which should go?
Only a coherent company — one that pursues a clear strategic direction (way to play), builds a system of differentiating capabilities consistent with that direction, and sells products and services that thrive within that system — can reliably and sustainably outpace competitors.
Key Publications on Capabilities-Driven Strategy