Chapter 5: Develop (Designing Capabilities)
Two programs sit in adjacent hallways of the same institution. One produces graduates employers fight to hire. The other produces graduates employers barely notice. The difference is not effort or funding. It is architecture: whether People, Processes, Technology, and Information are designed to work as a system. Strategy without capability is just ambition. This chapter is where ambition meets organizational reality.
Learning Objectives
By the end of this chapter, you'll be able to:
- Explain how the Develop phase bridges strategy and operations and answers the governance question "Are we doing things the right way?"
- Define "capability" as an integrated system of people, processes, technology, and information, not just a department or function
- Describe how value streams connect capabilities into end-to-end flows that create stakeholder value
- Explain the purpose of capability gap analysis and how it prioritizes investment based on strategic impact
- Articulate why prototyping and iteration reduce risk when building new capabilities
Key Concepts
Self-Assessment
Before moving to the next chapter, ensure you can:
Reflection Questions
Apply these concepts to your own context:
1. Think about Marcus's hallway walk. Is there a similar contrast in your organization, where one unit has built a capability to high maturity while another unit of the same organization barely has it at all? What caused the difference?
2. Map your organization's primary value stream from the stakeholder's perspective. Where are the strongest stages? Where do handoffs break down? Where is the stakeholder experience most fragmented?
3. If you could close one capability gap in your organization tomorrow, which would create the most strategic impact? What's stopping you from starting a prototype this week?