Creating Sustainable Advantageous Capabilities

Capabilities  are the often interdependent people, expertise,  tools, processes, and systems that are the foundation for a highly successful organizations sustainable advantage in a specific industry … This sustained advantage gives an organization significant market power underlying durable profits, increased market share,  growth…

A sustainable advantageous capability typically has the following properties:

  • Be the driver for most of your discretionary spending
  • Are no more than  you can count on one hand
  • Should treated "special" during cost cutting initiatives (long  term perspective unless short term  is too severe)
  • A true capability is typically a combination of things which  delivers a unique, difficult to copy combination of attributes
  • Nearly  always multi-functional and increasingly  multi-organizational
  • In larger organizations, can be the foundation for  a high-performing portfolio of businesses — deriving their advantages from similar capability systems.
  • Most lend themselves to advantages through  economies of  scale
  • Some lend themselves to advantages through economies of scope

The key thing to understand about these types of capabilities is that  unlike a physical asset on which many businesses are based, these do not  need to expire. The key is recognizing them as a SAC and maintaining them.   A strategy that leads to a SAC can lead to perpetual advantages and success.