1. Leading your Business Customer
With Business Capability Analysis
A Lean-Agile Approach to Enterprise Analysis
Dean Stevens
Synaptus
@leanopinions

2. Capability Modeling
HBR: The Next Revolution in Productivity
• Business capability is an outcome
based view of what the business
does
• Capability Model presents
– A graphical view of the business
or value stream
– Specifies value by a relative
assessment of capabilities
• Promote a shared understanding
– Identify, scope & prioritize
initiatives
– Maintain business context
throughout the project

3. I have a question! Value Manager
…BIZ
I need to help them
discover GOOD answers
… Value Manager
I have a question!
…Other
Stakeholders
I have a question!
…DEV
3

4. Value Manager
Good Answers to Hard Questions
• Prioritization
– What feature do we work on next?
• Scope
– Should I add more functionality? Or is this done?
• Quality
– Is it good enough?
• Trade offs
– Will the easy solution be sufficient?
4

5. Value Manager
Big Picture
What if we learned
together how it fits
into the big picture?
They are asking
questions about
the puzzle piece
5

6. Value Manager
Shared Context
Collaborate and Elaborate
Then we could
TALK about what
we had learned
… with a shared
CONTEXT
6

7. Value Manager
Value of Capability Analysis
• Provide Context I could help
them discover
GOOD answers,
and QUICKLY
• Facilitate Discovery
• Focus on Value
• Promote Feedback

8. Capability Analysis Recipe
1. Describe Business Capabilities
2. Assess Capabilities for Value, Performance & Risks
3. Analyze Capability Model (Heat Map)
8

9. Describe Business Capabilities
Focus on Business Benefit
• Start with a list of your business process
– From what you already know and documents you have
– Process Frameworks: APQC, ITIL
• Rename and describe them as business benefits
– What’s the benefit, the outcome, the purpose
– How could we measure it
• Map the value stream or network (optional)
• Validate/ elaborate with business managers.
9

10. Describe Business Capabilities
The “How Trap”
How Phrase Outcome Phrase
Receive Fax Receive Request
Enter Info to System Draft Quote
Create Certificate Create Certificate
Send Fax to Agent Communicate Quote to Agent
Rekey into FinApp Interface
Create Policy Agreement Create Policy Agreement
Mail Agreement Send Agreement
Send Fax is just one way to Communicate a Quote
Focusing on the outcome avoids the “How Trap”
Easier to “see” drivers and results

11. Describe Business Capabilities
• Capability Name Review It is hard “see”
what we do in this
– Action verb/noun format
different way
– Identify & revise “How Trap” names
• Description Review
– Objective: Make clear what this
activity is during interviews
– Include business benefit, purpose
or outcome
– OK to state “how” we do it
currently
– Clarify & Simplify

12. Describe Business Capabilities
Detailed Capability Model
Key Key
Business Capability Purpose Owner Metric Goal Cost FTE
2.0 Generate Demand
2.2 Manage Retailer Relationships
2.2.2 Support Inventory Management
at Retailers
2.2.3 Provide & Deliver Retailer Access
to Intranet
2.2.4 Develop & Provide Warranty
Services
2.2.5 Provide Product Technical
Support
2.2.7 Allocate Product to Retailer
2.2.8 Create & Manage Retailer Orders
2.2.9 Create & Manage Parts Order
2.2.10 Monitor retailer compliance
with policies and programs

13. Describe Business Capabilities
Visualize the Business
Capability Relationship Diagram
Launch New Product
Ideation Plan Launch Post Launch
Control
10 11 10
1.3.2 Communicate,
1.1.1 Analyze New PS&P 1.4.1 Manage New PS&P 3.4.2 Track Perform Metrics 4.1.2 Assess Accessory
3.1.2 Qualify Suppliers 1.2.5 Develop Launch Plan Coordinate & Execute 1.3.5 Manage Launch
Opportunities Portfolios for Parts/Acc'y Suppliers Demand
Comm Plan
Controlling
1.2.1 Obtain Financial
Approval & Support to
3.1.3 Negotiate & Document 1.3.3 Coordinate & Execute 1.4.2 Manage Partner 3.4.3 Track Performance
Develop PS&P
Supplier Agreement Marketing Plan Relationships for New PS&P Metrics for Service Providers
Value Add
10
1.4.3 Establish Price to 1.2.2 Design, Prototype & 1.3.6 Execute Launch of 2.1.7 Perform Customer
2.1.3 Train Dealers
Dealer Test New PS&P New PS&P Relations
Value
10
1.1.2 Plan, Develop &
1.2.3 Design & Develop 4.2.5 Plan Warehousing & 2.2.5 Provide Product
Communicate New PS&P 1.3.1 Perform Pre-Launch
Installation Process Staging - Long Range Technical Support
Strategy Activities
Supporting/Enabling
11 11
Support
1.1.3 Develop Action Plans 1.2.4 Design & Develop 1.3.4 Coordinate & Execute 3.3.2 Coordinate Technical
to Develop PS&P Concepts Support Services Support Activities Support with Supplier
4
1.1.4 Document Action 2.2.2 Support Inventory
Plans to Develop PS&P 6 Management at Dealers
3.3.1 Perform Supply Chain
Concepts
Planning with Supplier
8
4.2.3 Plan General Parts &
3.1.1 Identify Suppliers Acc'y Requirements - Long
Range
Business Scenario Metrics
Offer high quality products that the customer desires, that can be delivered quickly and Time to Market
that drives increased sales and profitability. Activities include assess opportunities, plan, New Product Revenue & Profitability
launch and market (initial) required to. Market Penetration

14. Assess Business Capabilities
• Elicit specific answers to specific questions for each
capability
– Value: Strategic, Business, Customer
– Performance: Relative to expectations, Constraint
– Risk: Business, Compliance, Technical
• This is Context
• Very powerful approach to Organizational Learning
and Shared Understanding
14

15. Assess Business Capabilities
Capability Model/ Heat Map
Value:
• Assessed Business Strategy
Business
Value, Performance, Customer Risk
Performance
and Risks relative to How suitable is Regulatory
Compliance
other capabilities performance relative
Technology
to expectations?
• Visualize the Business
with Context
KEY Business
High Value High Per Gap High Risk
Benefit
Medium Value Medium Per Gap Moderate Risk
Low Value Low Per Gap Low Risk
15

16. Assess Business Capabilities
Value Stream/ Network View
Capability Relationship Diagram
Launch New Product
Ideation Plan Launch Post Launch
LEGEND
Business
10 11 10 Performance Changeability
Value
1.3.2 Communicate, L
1.1.1 Analyze New PS&P 1.4.1 Manage New PS&P 3.4.2 Track Perform Metrics 4.1.2 Assess Accessory
3.1.2 Qualify Suppliers 1.2.5 Develop Launch Plan Coordinate & Execute 1.3.5 Manage Launch High Low
Opportunities Portfolios for Parts/Acc'y Suppliers Demand
Comm Plan M
H
Controlling
Dealer
Survey
VP
1.2.1 Obtain Financial
Approval & Support to
3.1.3 Negotiate & Document 1.3.3 Coordinate & Execute 1.4.2 Manage Partner 3.4.3 Track Performance
Develop PS&P
Marketing Plan Low High M
Supplier Agreement Relationships for New PS&P Metrics for Service Providers
Not Specified
P
10
1.4.3 Establish Price to 1.2.2 Design, Prototype & 1.3.6 Execute Launch of 2.1.7 Perform Customer
2.1.3 Train Dealers
Dealer Test New PS&P New PS&P Relations
Value
10
1.1.2 Plan, Develop &
1.2.3 Design & Develop 4.2.5 Plan Warehousing & 2.2.5 Provide Product
Communicate New PS&P 1.3.1 Perform Pre-Launch
Installation Process Staging - Long Range Technical Support
Strategy Activities
Supporting/Enabling
11 11
1.1.3 Develop Action Plans 1.2.4 Design & Develop 1.3.4 Coordinate & Execute 3.3.2 Coordinate Technical
to Develop PS&P Concepts Support Services Support Activities Support with Supplier
4
Very Red – Improve Performance
1.1.4 Document Action 2.2.2 Support Inventory
Plans to Develop PS&P 6 Management at Dealers
3.3.1 Perform Supply Chain
Concepts
Planning with Supplier
8
3.1.1 Identify Suppliers
4.2.3 Plan General Parts &
Acc'y Requirements - Long
Very Green – Improve Efficiency
Range
Business Scenario Metrics
Offer high quality products that the customer desires, that can be delivered quickly and Time to Market
that drives increased sales and profitability. Activities include assess opportunities, plan, New Product Revenue & Profitability
launch and market (initial) required to. Market Penetration

17. Analyze the Capability Model
Lenses
• Analytical Approaches
The Capability
– Lean Analysis Model is a great way
– Theory of Constraints to start these
analytical
– Financial Analysis approaches
– Organizational Analysis
– Technology Architecture Analysis
17

18. Analyze the Capability Model
Competencies
• Analytical Thinking & Problem Solving
– Creative Thinking
– Decision Making I can apply these
analytical
– Learning competencies
– Problem Solving
– Systems Thinking
18

19. Value Manager
Collaborate and Elaborate
We can TALK
about what we
have learned
… with a shared
CONTEXT
19

20. Value Manager
Good Answers to Hard Questions
• Prioritization I can help them
– What feature do we work on discover GOOD
answers,
next?
and QUICKLY
• Scope
– Should I add more
functionality? Or is this done?
• Quality
– Is it good enough?
• Trade offs
– Will the easy solution be
sufficient?
20

21. Value Manager
Value of Capability Analysis
• Provide Context Capability Analysis
really helps me add
value when I use it
to…
• Facilitate Discovery
• Focus on Value
• Promote Feedback