12 years, 10 months ago

The Battle of Our Times: Capabilities vs. Process


Photo by Tim Hipps, FMWRC Public Affairs

I'm a little ashamed to admit I've spent far too much of my career debating colleagues on the merits of capability versus process. In the worst example, I engaged in an intense debate on the topic in front of my vice-president, my general manager, and the chief architect of the company. My VP considers that the worst conversation she's been in in the past three years.

Who can blame her? It's largely academic, mostly cared about by architects and is frankly, and too nuanced for non-architects to really understand; certainly too trivial for a VP to be bothered with. 

The debate is really about what concept should be used as the key lens for understanding an organization. This camp is where you'll usually find the Six Sigma evangelists and business process management devotees. I'm not sure how much they'll agree with my synthesis of their position but essentially it's this: business processes are activities and organizations are largely about the activities they execute, therefore this is the appropriate concept by which to understand the organization.

In the other camp are business architects, usually. Their perspective is that organizations aren't really about activities, they are about outcomes. Activities are merely a vehicle for achieving outcomes. Most organizations care more about the outcomes (what) than the activity (how) that was used to accomplish the outcome. Capabilities – by definition – are the business outcomes unconstrained by the people, process, information, and technology used to achieve it.

As is probably apparent from what I've written so far, I strongly believe that capabilities are a better lens than processes primarily for three reasons. The first is the focal distinction between the two concepts. Business outcomes are about value – activities can be about value but not necessarily so. It's not unheard of for organizations to spend so much energy on the activity that they lose sight of the value that they're driving for. Properly defined capabilities ensure that value is always in the focus.

The second reason  is that processes don't always account for all of the outcomes that an organization cares about. In fact, there are some outcomes that are entrenched in multiple processes. Customer relationship management, for example, is a part of many processes throughout the lifecycle of the customer. This is an outcome that needs to be managed – process can't handle it very well. A capability-based approach provides visibility to the outcome without being constrained by the processes.

The third has  to do with methods – namely, most process-centric approaches are overly concerned with process-modeling. I like process models – they can be invaluable – but they aren't a panacea for making organizational improvements. That's largely because they take too long and provide too little return on investment. Process modeling is a cumbersome activity, especially at the swimlane level which many methods prescribe. An organization – especially a global, multi-national one – will likely have multiple process flows for any particular process depending on the geography, amongst other factors. At the end, there's not much in terms of prescription and instead a huge library of processes that must then be continuously maintained.

I think capability-based planning provides a more scalable approach. You start with an understanding of the outcomes, determine which high-value outcomes required the most attention, and then focus energy on dissecting only those capabilities which matter, using multiple tools including process modeling. There's no wasted effort trying to inventory processes of the sake of having a model.

That's an argument I'm willing to have, although if my VP is present, I'm likely to ask that we take it outside.