How Capability Portfolio Management Can Help Your Business Grow
As a business owner, you’re constantly striving to improve and grow your business. However, this can be difficult if you don’t have a clear understanding of your organization’s capabilities and how they align with your strategic goals. This is where Capability Portfolio Management (CPM) comes in.
What is Capability Portfolio Management?
At its core, CPM is an approach to managing an organization’s capabilities (i.e., its processes, resources, and skills) in a way that aligns them with its strategic goals. It involves identifying your organization’s capabilities, evaluating their performance, and making decisions about where to invest resources to improve them.
Why is Capability Portfolio Management important?
CPM is important for a number of reasons. For one, it can help you identify gaps in your organization’s capabilities. This, in turn, can help you target your investments in areas that will have the greatest impact on your strategic goals. Additionally, CPM can help you optimize your existing capabilities, ensuring that they’re being used to their fullest potential.
How does Capability Portfolio Management work?
CPM typically involves the following steps:
- Identifying capabilities: This involves taking stock of your organization’s existing capabilities and categorizing them into various groups (e.g., core capabilities, supporting capabilities, etc.).
- Assessing performance: This involves evaluating how well each capability is performing (e.g., Are there any gaps? Are there any capabilities that are underperforming?) and comparing this against your strategic goals.
- Mapping to strategic objectives: This involves mapping your capabilities to your organization’s strategic objectives to identify where you need to invest resources.
- Developing a capability roadmap: This involves developing a plan for investing in your organization’s capabilities over time. This roadmap should include timelines, metrics, and milestones.
What are the benefits of Capability Portfolio Management?
CPM offers a number of benefits to organizations, including:
- Improved alignment: By aligning your organization’s capabilities with your strategic goals, you can ensure that everyone in your organization is working towards the same objectives.
- Optimized resource allocation: By identifying your organization’s core capabilities, you can ensure that you’re investing your resources in areas that will have the greatest impact.
- Greater agility: By regularly evaluating your capabilities and adjusting your investments accordingly, you can become more agile and adaptable as an organization.
- Improved decision-making: By having a clear understanding of your organization’s capabilities, you can make more informed decisions about where to invest your resources.
Real-world examples of Capability Portfolio Management in action
There are a number of companies that have successfully implemented Capability Portfolio Management to drive growth and improve their businesses. For example, General Electric (GE) used Capability Portfolio Management to identify its core capabilities and invest in areas that would have the greatest impact on its strategic goals. This included divesting from non-core businesses and investing in areas like renewable energy and aviation.
In conclusion, Capability Portfolio Management can be a powerful tool for driving growth and improving your organization’s performance. By identifying your organization’s capabilities, assessing their performance, and investing in areas that will have the greatest impact, you can ensure that you’re aligned with your strategic goals and well-positioned for success.
