Industry Report:


Thilanka Liyanage 9th SEPTEMBER 2021

What matters for customers is an organization's ability to serve them. If you ask them which companies they admire, people quickly point to organizations like Microsoft, Google, Starbucks or Tesla

Ask how many layers of management these companies have, though, or how they set strategy, and you’ll discover that few know or care. What people respect about the companies is not how they are structured or their specific approaches to management, but their capabilities - an ability to innovate, for example, or to respond to changing customer needs.

Such organizational capabilities, as we call them, are key intangible assets. You can’t see or touch them, yet they can make all the difference in the world when it comes to market value.

Individual Organizational
An individual's functional competency An organization core competencies
An individual's leadership ability An organizations capabilities

In above table;

Individual-Technical: Represents a person’s functional competence, such as technical expertise in marketing, finance, development or manufacturing

Individual-Social: Person’s leadership ability - for instance, to set direction, to communicate a vision, or to motivate people

Organizational-Technical: Comprises a company’s core technical competencies. For example, a Software Engineering company must know how to enhance business growth of their customers with creative design, development and to deliver market defining high quality solutions

Organizational-Social: Represents an organization’s underlying DNA, culture, and personality. These might include such capabilities as innovation and speed

Organizational capabilities emerge when a company delivers on the combined competencies and abilities of its individuals. Therefore, capabilities of an organization heavily depend on its people. An employee may be technically literate or demonstrate leadership skill, but the company as a whole may or may not embody the same strengths.

People and organizations operate in two different levels, with dynamics and characteristics unique to each other. Often teams come in between these two. Therefore, there should be a mechanism which elevates individual knowledge and skills to organization level capabilities via teams.

This transformation can be named as emergence of human capital in an organization, since it's bottom up in nature.

System and processors are important in facilitating this transformation or emergence process, but not enough. Interaction among people is very important in this exercise.

What kind of interactions I mean?

Interactions which;

  • Serves a common purpose.
  • Sensitive to individual differences, in terms of knowledge, skills, personalities and interests.
  • Supplement each other's knowledge and skills. Learn who knows what, learn from each other.
  • Interactions which attempt to understand why certain things in certain ways, why certain people behave in certain ways.
  • Transform generics skills to context specific skills - what you bring from outside might not work in new places unless you contextualize them.
  • Interactions which lead to changes within you and those who are around you.

Next time when you interact with others, think of these, it might make a difference. More importantly those interactions with the support of processors and system will elevate individual skills into organization capabilities!


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