Invisible driver of excessive costs
Your organization has a range of capabilities - areas where it is particularly strong and effective that deliver the organization’s services and determine its competitiveness.
• Credit management for a bank
• Manufacturing and logistics for a manufacturer
• Investment management for an insurance company
• Merchandising for a retailer.
Others areas of the organization’s operations (eg financial accounting) need to be efficient but do not need to be core capabilities.
Few organizations have a strong capability in strategy execution and project delivery - the capability to ensure that the full business value available is delivered from every project investment. This capability is called your ‘value delivery capability’.
Your organization’s value delivery capability also determines the types of projects you can successfully deliver.
You can start any project, but it is the types of projects you can successfully deliver that determines your future operations, results, returns on investment and profitability.
Bringing innovative new products to market requires a higher level of organizational value delivery capability than, say, payroll automation. When you know your capability level you can ensure you only take on projects you can successfully deliver.
Most organizations have never considered their value delivery capability level and, therefore, have not measured or managed it. Nor do they measure the level of delivery capability required by their project investments.
As a result, they take on projects that they, as an organization, cannot successfully deliver. These projects go over time, over budget and under deliver — sound familiar?
The top 5% of organizations have made visible and then measure their level of value delivery capability and the capability requirements of each project investment so as to assess whether or not they can successfully deliver the project before investing the big bucks.
These organizational and project-level capability assessments make visible any projects that are beyond the organization’s ability to deliver successfully. These ‘beyond capability’ projects can require the organization’s capability to be uplifted to the level required, be redesigned to be within the existing capability level, or be cancelled as they will waste far more than they will deliver.
If you don't know your organization's value delivery capability level you can know that you are wasting money on projects you'll never successfully deliver.