Business Capability Maps: A GPS for Improvement

A map is a useful tool that helps users determine where they are currently and how to proceed to where they need to be. Maps don’t only exist to aid travellers as they navigate; they also play an important role in business planning and strategy.

A business might use maps or charts to document and understand systems, processes, functions, and responsibilities, and they may come in the form of organizational charts, process diagrams, and other deliverables. 

These visual tools allow you to get a clearer view of the current state of your organization, identify strengths and weaknesses, and create strategies for improvement. Additionally, maps play an important role in scenario building and planning for the future state of your company.

One of the most important visual assets in organizational planning is the business capability map. Where other charts detail how things are done, a capability map documents what the business does.

What Is a Business Capability Map?

A capability map defines one or more of the capabilities your business has. It also details strengths and gaps within those capabilities.

Business mapping is often associated with processes in place to achieve certain goals. The maps show how to perform the tasks necessary to achieve the results required to keep the business going. 

Business capabilities are different. They are the combination of expertise, resources, and other elements your organization must have to succeed. A business capability map provides visual documentation of those capabilities.

A map is a visual document, but there is no single template for creating a capability map. Instead, you can use the tools you have to create a map with a layout that works best for your business.

Before you can map your company’s capabilities, you must be able to identify them. Capabilities are frequently confused with processes. However, a capability has very specific traits. Use these guidelines to articulate capabilities in your organization:

A Capability Is a What

A capability describes what a company does. It does not address how, where, or who. For example, software development is a capability. It’s something the business is capable of doing. There’s no mention of the processes involved in the software development or who is responsible for them.

A Capability Should Have a Clear Definition

Each capability that you map should have a clear definition. For example, if you define data security as a capability, you must detail what data you’re referring to and what you mean by securing it. This is important to do because it ensures that everybody is working with the correct information, and nobody is making the wrong assumptions.

A Capability Has an Outcome

You should be able to detail the outcome that you achieve as a result of your company’s capability. If the capability is employee development, for instance, the outcome might be worker engagement and retention.

Not All Capabilities Are Tangible

Software development is a tangible capability. It results in a product that you can use or sell. However, keep in mind that some capabilities, like collaboration, are not tangible. 

Many capabilities are intangible - their a function or attribute of your great team.

4 Benefits of Business Capability Mapping

There are 4 benefits of mapping business capabilities.

1. Identifies Capability Gaps

Mapping forces you to identify your company’s capabilities and examine them closely. You will see which capabilities you have, how strong they are, and where there are gaps that could impact your ability to grow or compete.

2. Communicates Capabilities Clearly

After mapping, you can define and articulate each capability using a common language. This method ensures that everyone is on the same page when discussing a capability.

3. Helps with Setting Priorities

Capability mapping can help with priority setting on two fronts. If important capabilities are missing or lacking, you can prioritize them in organizational and capabilities planning. 

Additionally, as you prioritize your projects, you can use the map to determine which one should be the focus based on the current strengths of your capabilities.

4. Scales with the Business

A capability map is a living document. It can be adjusted as your business acquires or strengthens its capabilities.

Once you have mapped out your key capabilities, you will have a valuable document to go along with your organizational charts and other items to facilitate business planning.

Interactive chart template: An organizational planning tool like Functionly helps companies to see a bigger picture view of roles, responsibilities and connections within their teams, helping to map business capabilities.

How to Map Business Capabilities

There’s not a single methodology for creating a capability map. However, there are some key guidelines that you can use to create procedures that allow you to develop maps that are valuable to your organization. 

Use organizational charting software that has robust functionality to help you get the best possible results.

Gather Key Insights from Your Value Chain

A value chain is a series of processes and activities that take a product or service on the journey from idea to market. If you study the value chain, you will be able to get some foundational ideas about your business capabilities. 

For example, efficiency and talent acquisition might stand out in a value chain that’s related to developing a new smartphone app.

Contextualize Your Capabilities Within Industry Parameters

What are the strengths and capabilities that are most important in your industry? Which of these does your company have? You should know your capabilities and how they align with your industry. 

To find that out, answer the following questions to determine how your capabilities have you positioned within the market:

• Who are your organization’s stakeholders?
• What is the value that your products create?
• Which members of your company directly engage with customers?
• Which customer groups benefit most from your products or services?
• What are the activities that take place to provide your product or service?

It’s important to have this context to understand the true value of your capabilities.

Document Business Capabilities Using Insider Insights

Put together a team of leaders and key experts from your industry to build a list of business capabilities. Keep the focus on what is most important to your business by prioritizing these areas:

• Stakeholders: Expectation management and identification of key stakeholders
• Mission-Critical: Activities relating to the creation and delivery of your products
• Distribution: Anything pertaining to relationships with clients or distributors
• Infrastructure: Activities that build or maintain company infrastructure
• Financials: Investments, taxes, insurance, and other fiscal activities
• Customer Service: Onboarding customer support and retention
• Support: Key support functions, including HR and risk management

The list of capabilities you create will reflect the things that key people in your company value and prioritize. This is the document that you will work from during the rest of the mapping process.

Now that you have your first list of capabilities, move to the next iteration. Refine the list. Break large capabilities into smaller ones. Create categories and subcategories for capabilities that make sense for your business. Finally, build connections among your business capabilities.

Next, map capabilities to outcomes. What does each capability allow your business to achieve? How does it improve your ability to compete? For example, if you’re in an industry that is particularly volatile and competitive, resilience and innovation can give you staying power and allow you to face industry disruptors.

Don’t forget to include missing capabilities. In addition to mapping the capabilities you have, detail the ones you lack. It’s important to know where those gaps exist.

You’ll also want to add a state of change description. You can better describe capabilities that are strengths, missing capabilities, and capabilities that need to be improved by adding a state of change column to your map.

Your capabilities will most likely include items that relate to both IT and business infrastructure. This is a good thing, as it helps organizational leaders see how those capabilities align. Mapping is also a good way to describe IT capabilities using the same language that describes business capabilities.

Challenges When Mapping Business Capabilities

One of the challenges you will face when mapping capabilities is inexperience and lack of familiarity. You are creating and executing a new process for the first time, and it may be challenging to make that work. On top of that, you might have new organizational tools to learn.

Another challenge is obtaining buy-in from leaders and other stakeholders. They may not see the value in capability mapping, and you may need to clarify it for them.

Employees you ask to refer to the document may not understand its value at first. It’s important to educate them as well. Maps like this may become stagnant if people don’t understand why it’s important to keep them updated.

One way to overcome this challenge is by identifying and mapping just one or two capabilities. Use them as the basis of a case study that demonstrates how you can use these maps for creating strategies or increasing understanding of your company’s current state.

Using Capability Mapping in Organizational Planning

After you have created your capability map, you have a valuable tool for organizational and strategic planning. As you undertake major initiatives like restructuring or important projects, your map will tell you if you have the existing capabilities you need to succeed.