It has been a decades-long problem of encountering a significant failure rate when executing strategy. Methodologies and tools for their creation have been relatively established. What remains a black block for most of the senior stakeholders is what should be done to implement it according to the plan. The link between strategy and impact has always been seen as an unclear, inaccurate, and somewhat "utopian" phase of both corporate and digital strategy.

TageSpot is Capabilities & Value Streams centric company. We believe that this duo is a comprehensive and at the same time simple instrument for bridging strategy and impact. Unfortunately, it is significantly underused when building long-term and mid-term plans.

A business capability is an ability that business possesses or exchanges that allows it to realize a business model, continuously adapt to market conditions, and grow. It is not a business process nor it is a business unit name. Skills, competencies, and technology by themselves are not capabilities even though they are vital components. Account development, customer relations management, market strategy, and planning are all good examples of business capabilities.

By itself, capability serves the purpose of gluing formalized strategy and its implementation. What does this mean in practice? Capabilities fit nicely in most strategic frameworks. One of the best examples could be Strategy Choice Cascade created by consulting firm Monitor, A.G. Lafley, and Roger Martin. It has been successfully used by P&G for many years and by many other elite companies.

"What capabilities must we have" concentrates on the capabilities that should be optimized or built from scratch to make strategy live up to its potential. So, if to say that "How will we win" approach is set to be "By building world-class engineering teams", capabilities cascade should mention that "Engineering culture management", "Distributed systems design & implementation" etc. capabilities should be on the required level of performance. Now it becomes a challenge for change agents or consultants to build or optimize those capabilities inside a company. In TageSpot, we've refined our own methodology of how to build capabilities by considering their dimensions:

By having an established dimensions view of capabilities we could go deeper on specific business, application, technology requirements. That is how a strategy could transition into execution details.

A value stream is a sibling of many other visual management and strategic documentation approaches that have been used in the past to analyze, model, and measure business value e.g. value chains, lean value streams, value networks. The value stream that we use is based on the work of James Martin's called The Great Transition. Added value is generated for internal stakeholders or consumers in blocks or stages which could be digital, physical assets, etc., which are combined in a layered manner. This value is viewed from the context of a specific group of stakeholders that leverage business capabilities. One stage adds value and transitions to another one. Having VS as a strategy facilitation mechanism significantly promotes cooperation, provides an understanding of the efforts required to deliver customer value, allows to achieve this at speed, resulting in fewer reworks and resources involved.

To see why we need value streams let's imagine a scenario. As part of our strategy, we decided to invest heavily in the data capabilities of the company. This will allow realizing the potential of becoming a data-driven organization to facilitate significant economic decisions and enhance customer journey with AI and predictive analytics. As our experience shows a lot of attention is dedicated to a particular stage and all the related stages are ignored intentionally or inadvertently. As a result, value is not propagated as it should. Besides all its beauty, business capability doesn't provide a mechanism for monitoring value impacts, but this component is crucial. That is why this tandem plays so nicely together. Value streams allow tracking the performance of every stage and applying corrective measures where needed.

This kind of thinking and problem-solving requires a significant change of behaviors and work approaches in all involved stakeholders. It could be hard, but in the end, it pays back to both individuals and companies altogether. We are ready to tackle this challenge with you to make you stand out and built a competitive advantage.