Capability analysis: How to do it right

The big question – how do you measure capability properly? Talk to Matt Moore.

“If you can’t measure it, you can’t manage it”. It’s a well-known phrase that is frequently used to promote effective data analysis – which it does, despite being inaccurate and taken out of context.

For a start, it is usually incorrectly attributed to management thinker Peter Drucker. It was actually guru W. Edwards Deming who used those words in his book ‘The New Economics’ and the main problem is he actually said was: “It is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth”, i.e. the opposite to the way the quote is usually taken.

So, the phrase has been mis-attributed, mis-quoted and mis-appropriated. But what this misuse does do is prove another truism that, ironically, also supports effective data analysis: that information improperly collected and badly used could have the adverse effect to what it was originally meant to achieve. Or to put it in a more familiar way: If you can’t measure it accurately, you can’t manage it properly.

Of course, not everything needs to be measured, but more can and should be than some might think. The rise in easy-to-use and yet hugely powerful surveying tools and data analysis software means that businesses can now easily collect data on things that were previously thought to be too complex or vague to accurately measure – and therefore properly manage.

If you can’t measure it accurately, you can’t manage it properly.

Two good examples are the capability of an entire organisation regardless of its size, and employees’ soft skills. One could be seen to be too complex, the other too vague, but both can be quickly and rigorously ascertained.

Capability analysis identifies where an organisation can improve by using meticulously designed surveys to measure the collective skills, behaviours and expertise within the business: effectively, what it is currently capable of doing.

The desired state is defined and compared against what has been measured, providing a capability gap. Areas for improvement can be identified throughout the organisation, improvement programmes setup, and their value calculated by another round of surveys and analysis at a later date.

Capability surveys can measure ‘softer’ skills such as leadership, customer service, continuous improvement practices, coaching, communication abilities, strategy awareness and implementation, teamwork, personal development requirements, and many more.

The key to their effectiveness is creating a capability matrix which defines standard levels that are appropriate for different roles. The results of the survey can then be compared and the gaps identified.

For example, a rating scale for customer service may go from ‘1 – Provides professional, timely and courteous service to customers’ to ‘5 – Seeks to create new and innovative solutions to address present and future customer needs.’ 

For a shop floor role, being rated as 1 may be acceptable, whereas a senior leader may be expected to be rated 5. Any difference is the gap.

This is of course simplified; there will probably be many aspects of customer service that require measuring, and a good capability survey will break these out.

It is therefore not surprising that an effective capability survey, based on a well-structured and meaningful capability matrix is a significant commitment in all aspects: design, implementation, execution and analysis.

To be effective on an organisational level, the data collected must be analysed properly.

This means knowing what you want to analyse before you have measured it: the capabilities have to be chosen and fully defined; the participants and the level at which they are to be surveyed carefully considered; and the key metadata – the personal data about where an individual and his or her place in the organisation – identified so that the analysis outputted has a relevance at a strategic level.

For example, a capability survey may highlight that an individual has a below optimum customer focus, that may require a simple development intervention. However, it could be that the individual’s team is below optimum and the problem is a manager who needs development.

It may even be that there is a systemic problem: the organisation’s message about the required customer focus is not being communicated properly and everyone is sub-optimal.

To get to this level of granularity requires an analysis system, but more than that it requires the foresight to know what meta data will ultimately prove to be relevant. Too little, and you don’t get the true picture.

Too much, and the picture becomes obfuscated by excess detail. This is why effective project management is also important: knowing what to collect as well as how to collect it.

The benefits of effective capability analysis are quantifiable and even tangible. Quantifiable, because identifying capability gaps highlights strengths and weaknesses across teams, departments, functions, regions or the entire organisation, and this can be used to focus improvement efforts, development programmes and align human capital with the business objectives.

And tangible because once that is done it can only help to make a business more effective, focused and profitable.


About the author

Matt Moore is online manager and technology PM at Inspirational Development Group


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