Chapter 5: Develop (Designing Capabilities)

Look at this table before reading any further. Two sets of programs at the same institution, serving the same strategic purpose, resourced by the same budget process. One column describes a capability. The other describes fragments. The question this chapter answers is: how did Marcus get here, what does the contrast actually mean, and what do you do about it?

Here's how it happened.

Three months into the Design4 process, Marcus walked Tom through a question that had been nagging him since the Define phase.

"Your programs work," Marcus said. "Health Sciences graduates are employed. Employers are satisfied. Your enrolment is resilient. Why?"

Tom didn't hesitate. "Because we built the programs with employers, not for them. Our clinical placement network isn't an add-on. It's the backbone. Every course is mapped to the competencies our employer partners tell us they need. Every student gets work-integrated learning before they graduate, not as a capstone project at the end, but woven through from semester two. And we track whether our graduates perform on the job, not just whether they passed their courses."

Marcus nodded. "So you have the capability to do employer-integrated program design."

"I suppose we do," Tom said. "We just call it 'how we do things.'"

That afternoon, Marcus walked down the hall to meet with two faculty members from the business programs housed at the Downtown Centre. He asked a version of the same question: "How do your programs connect to employer needs?"

The answer was revealing. "We have an advisory committee," one said. "They meet twice a year. They tell us what skills are trending and we try to incorporate that into the curriculum." The other added: "To be honest, most of our students came for the credential. Especially the international students. The connection to employers was secondary."

Two sets of programs. Same institution. One had the capability Marcus's strategy demanded. The other had the appearance of it. The difference wasn't effort or intention. It was architectural: People, Processes, Technology, and Information were aligned in Health Sciences. In the business programs, only fragments of each element existed, and they didn't connect.

Marcus had just experienced the Strategy-Capability Gap from the inside. Lakeshore's "How to Win" was employer-integrated program design. One part of the institution had built that capability over years of deliberate effort. Other parts had never needed to, because international tuition had made the question of employer alignment financially irrelevant.

Now that the tuition was gone, the gap was exposed. And closing it wouldn't be a matter of issuing a memo or purchasing a platform. It would require designing a capability from the ground up: the right people, the right processes, the right tools, and the right information, working together as a system.

You've discovered your purpose. You've defined your strategic choices: where to play and how to win. On paper, you have a compelling strategy and a testable business model. Now comes the question that separates aspiration from reality: Can you actually do this?

This is the Develop phase, and its governance question is direct: Are we doing them the right way? Not Are we doing the right things? (that was Define's question). Develop asks whether the organisation's internal architecture, its capabilities, value streams, and structural design, is configured to execute the strategy it has committed to. Of the four owners, this is the Architects' phase: they run Develop, designing the capabilities the Strategists' choices require. Lakeshore had no business architect. Marcus did the work anyway: an accidental architect, in a second seat beside his strategist's one.

Strategy speaks in choices; operations speak in processes and systems. When execution falls short, the diagnosis is usually "poor implementation", but the real problem is that nobody designed the bridge between them. That bridge is capability architecture: what the organisation must be great at, how value flows across functions, where the gaps are and how to close them. If Discover is about understanding and Define is about choosing, Develop is about designing.

In Practice: Marcus's hallway walk illustrated something the Develop phase makes explicit: capability isn't binary. You don't "have" it or "not have" it. Capability exists on a spectrum of maturity, and the same organisation can be highly mature in one area and barely functional in another. Lakeshore's strategic choice (employer-integrated program design as the institutional "How to Win") meant that the maturity level Tom had built in Health Sciences needed to become the standard across all priority programs. The Develop phase was about understanding what that standard actually consisted of, and what it would take to replicate it.