Strategic Planning Part IV: Linking Business Actions to Capabilities

Written by

Chuen Seet

In the last article on the strategic planning process, you learned about defining challenges and creating business objectives. Now, it’s time to assess your business capabilities and determine the business actions required to change your capabilities in order to accomplish your objectives.

What are business capabilities?

Business capabilities are the tangible and intangible building blocks of your business that allow it to do what it does. Made up of people, processes, and physical aspects, your business capabilities define what your business has the ability to accomplish.

During the strategic planning process, it’s important to map out the business capabilities that will be required to accomplish each objective. Doing so will help you determine whether you will be able to accomplish each objective with your current capabilities, as well as decide what capabilities you will need to invest in. This process is known as capability-based planning (or, sometimes, capability modelling).

Assessing business capabilities

As you map out the business capabilities that will be required to accomplish each objective, take the time to assess the necessary capabilities against their current state. Does your business have the full capabilities it needs to accomplish its objectives?

Chances are, some changes in business capabilities will be required. After you’ve listed your business capabilities, take the time to go through each one and assess the level of change that will be required in order for your business to accomplish its objectives.

One way to make this assessment is to mark each capability according to the level of change that will be required with the following legend:

  • Nothing – No change required.
  • Low (L) – Low level of change required.
  • Medium (M) – Medium level of change required.
  • High (H) – High level of change required.
  • New (N) – A new capability.

Prioritizing business capabilities

Once you have assessed the necessary changes to your business capabilities, it’s time to prioritize these changes by level of importance. Which changes will be easiest to implement? Which changes will generate the highest ROI? Are there any changes in capabilities that you can live without for the time being?

It’s important to prioritize changes in business capabilities because there may be more changes than you can realistically accomplish within this timeframe. Later on, you’ll be creating business actions to drive these changes in capabilities and ensuring that your capabilities deliver to your business objectives.

Example of mapping business capabilities

Throughout the previous articles in this series on strategic planning, we’ve been following the strategic planning process for a furniture retail chain that is looking to expand their business. Through the strategic planning process, they defined their strategic vision, created goals, outlined strategic objectives, created measurements, defined their business challenges, and had arrived at the following objectives:

  • Business Objective #1: The three most promising locations in each city are selected by the end of 2023.
  • Business Objective #2: Improve marketing capabilities ahead of the launch of the new retail locations.
  • Business Objective #3: Increase market brand awareness in these new markets by Q1 2025.

Now, it’s a matter of mapping their business capabilities in relation to their objectives. Remember, a business capability describes what a business does. It combines Human Resources, Process / Function, and Physical Assets into overarching business capabilities.

Examples of business capabilities

In tackling these objectives, the furniture retail chain determined they would need the following capabilities. For Business Objective #1, they would utilize:

  • Location Scouting
  • Business Planning
  • Financial Planning
  • Service Planning
  • Business Modeling
  • Capacity Planning

For Business Objective #2 and Business Objective #3, the furniture retail chain would utilize:

  • Marketing Management
  • Campaign Management
  • Brand Management
  • Event Marketing Management
  • Digital Marketing Management
  • Marketing Analytics
  • Sales Management

A colourful Jibility capability map of a furniture retail chain mapping their capabilities and color coding them based on the level of change required

Using Jibility, the furniture retail chain mapped their capabilities, color coding them based on the level of change that will be required. Notice that each capability is linked to its corresponding objective.

After prioritizing their objectives, the furniture retail chain realized they needed to invest the most change in ‘Campaign Management’ and ‘Digital Marketing Management’ in order to successfully accomplish their objectives. They marked these business capabilities as highest priority.

Creating business actions

Once business capabilities have been fully mapped out, it’s time to create business actions to drive changes to each capability. Business actions are small, tangible steps that can be undertaken to enhance a business capability to successfully deliver to a business objective.

Creating business actions is where the strategic planning process becomes its most granular and specific. This is an opportunity to get as detailed as possible in figuring out what specific actions need to be addressed in order to take your business from where it is currently to where in needs to be in order to successfully accomplish your objectives. Later, you’ll package these business actions into initiatives to use when creating a strategic roadmap.

Types of business actions

Business actions are divided into three main categories:

  • People – Positions, teams, and training you’ll need to invest in.
  • Process – Processes and workflows that will have to be created.
  • Physical– Equipment or locations that will have to be procured.

When creating business actions, estimated cost and estimated value are also important considerations. Projecting these numbers allows you to prioritize business actions based on order of importance, as well as return on investment.

Jibility’s free roadmap software allows you to easily assign business actions to each capability, enter an estimated cost, and receive an estimated cost value. Jibility also allows you to assign statuses to business actions to monitor your progress.

Examples of business actions

In the example above, the furniture retail chain had identified 'Campaign Management' as one of its business capabilities that required the most change. For the purpose of illustration, this is the capability we’ll focus on creating business actions for.

For the furniture retail chain, 'Campaign Management' is a brand-new capability for them. Therefore, they will have to invest extensively in creating business actions to get this business capability up-to-speed.

Working with Jibility’s roadmap software, the furniture retail chain created the following business actions to drive changes to 'Campaign Management':

  • Hire a Marketing Director (People) – In order to create successful campaigns, the furniture retail chain will need a marketing director to supply strategic vision and oversee their marketing efforts.
  • Conduct Market Research (Process) – Before creating campaigns to drive awareness in the new markets, the furniture retail chain will need to conduct market research to inform campaign creation.
  • Design Awareness Level Marketing Campaigns (Process) – The furniture retail chain will need to design campaign strategy and collateral for its new markets.
  • Hire a Freelance Marketing Agency (People) – After running a cost analysis, the furniture retail chain determined that it would be more cost-effective to hire a marketing agency to execute their campaigns as opposed to investing in creating an in-house marketing team.

Jibility visualizer showing link between business actions and business capabilities of a furniture retail chain

Using Jibility, the furniture retail chain is able to visualize the link between business actions and business capabilities.

Once these business actions have been completed, the retail furniture chain will have created a new capability that will allow them to "Improve marketing capabilities ahead of the launch of the new retail locations" and "Increase market brand awareness in these new markets by Q1 2025".

Stay tuned to learn more about strategic planning

Now that you have mapped your business capabilities and created business actions to drive changes to your capabilities, you’re almost all the way through with strategic planning! All that’s left to do is to organize business actions into initiatives, so keep on reading:

If you missed previous articles in the Strategic Planning Series, you can find them here:

Free tool for strategic prioritization

Jibility gives you a fast and consistent means of exposing the traceability of each initiative back to the strategic objectives. This means pet projects that sound great but don’t truly align can be identified and discarded early.

Jibility is a dynamic tool, whereby it’s easy to apply changes and see the impact on budget instantly — either within the initial workshop, or when a strategic pivot needs to happen out of the blue.