Innovation: Competency vs Capability Puzzle


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In his book #PlayBold Magnus Penker identifies capabilities as the first key ingredient of organizations that are successful innovators. The section was so inspiring, I thought I would explore his thoughts and give a brief about it. May be this will inspire many of you to buy and read this wonderful book.


A lot of organizations that decide to innovate, hire some very competent people. They then identify training programs or workshop that they believe will help their teams innovate. How about training our managers and teams in design thinking? Or analytics course? Or TRIZ workshop?


Quite a few organizations that I reached out to discuss about innovation told me they have trained their teams on design thinking and have launched projects. They would get back to me once their set of projects are over.


What such efforts, hiring people with new skills, training people on design thinking or TRIZ, starting an innovation function etc. does is ensure that there are some innovation skills and competency in the organization.


Research by Magnus and Innovation360 team indicate that you should derive your innovation strategy from the capabilities you possess and competencies of your employees.


Very often organizations confuse between capability and competency and his book talks about this in detail. Here is an interpretation for you


Competency is the skill of an individual to carry out a task. These could be technical, managerial, organizational etc. X is very competent test engineer. Sita is a competent sales person. Ram is an expert at project management. All of these describe the abilities of the person to execute a task and you can define the levels of competency as well.


However, is the presence of competency sufficient for an organization to achieve results? Multiple studies, Magnus and Innovation360, Assink (2006), PwC (2010), Booz & Co (2010) show that successful companies aligned capability with ambition. They don’t refer to competencies. By all means Kodak had the most competent camera designers in the world. Nokia and Blackberry had very competent engineers who designed mobile phones. Very clearly competencies aren’t sufficient for innovation.


Magnus identifies capabilities as the missing element. It encompasses a number of competencies, he identifies 66 of them, leadership styles, organization personas, culture and four key process related to innovation, ideation, idea selection, development and commercialization. Unlike competencies, capabilities is more related to the organization as an unit.


An individual may have competencies, but the organization needs multiple people with multiple competencies, often overlapping ones. They need different types of personas and multiple leadership styles to succeed. This must be all stitched together with process and structure.


Furthermore the organization needs to ensure capabilities are aligned with the goals. If your goals are incremental improvements, you need different capabilities from those needed for radical innovation.


Getting a few competent resources, sadly is inadequate to drive innovation (or for that matter any transformation). I have found this to be true at every organization I have dealt with.


Put the worlds best project management software without ensuring the organization has capability to utilize it and ensuring the culture, structure and goals are aligned to it, will result in a failure.


Hiring an acclaimed and competent lean sigma expert will not make the organization lean without changing the way every part of the organization works.


Implementing agile in your development process without ensuring that sales, HR and management process are also agile will ensure no benefits or agility.


The same holds true of innovation; design thinking training, ideation cells, periodic hackathons, AI & IoT projects are all merely innovation theatre unless the organization stitches these competencies together with process, leadership styles, personas and culture as well as align them with strategy, ambition and management systems.


You will of course learn a lot more from #Playbold authored by Magnus Penker.


Thanks Magnus as your book inspired me to put it all together.


Do reach out to me if you need support for your innovation efforts.

Krishnan Naganathan

Krishnan is a leading innovation consultant and focuses on helping people and organizations innovate and build capabilities for innovation. He brings over 25 years of experience in the industry and consulting. You can reach him by phone / WhatsApp: +919791033967 or email: krishnan@thinkhorizonconsulting.com

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