Closing the Gap: Mastering Organizational Capability

How to increase proproductivity even by 40 percent? - Discover the key strategies for organizations to bridge the gap in their capabilities and overcome the challenges of talent management.

Understanding the Capability Chasm

The capability chasm refers to the gap that exists between an organization's current capabilities and the capabilities it needs to succeed in a rapidly changing business environment. It is important for organizations to understand this gap in order to effectively address it and close it.

One way to understand the capability chasm is by conducting a thorough assessment of the organization's current capabilities. This involves identifying the strengths and weaknesses of the organization, as well as the skills and competencies needed to meet future challenges. McKinsey research shows that, in many organizations, between 20 and 30 percent of critical roles aren’t filled by the most appropriate people and that current incumbents may not be the people best suited to meet the future demands.

By understanding the capability chasm, organizations can develop targeted strategies to bridge the gap and enhance their overall capabilities.

Identifying the Key Organizational Capabilities

Identifying the key organizational capabilities is a crucial step in closing the capability chasm. These capabilities can be defined as the unique strengths and competencies that give an organization a competitive advantage in the market.

To identify the key organizational capabilities, organizations need to assess their internal resources, such as their employees, technology, and processes. They also need to consider external factors, such as market trends and customer demands.

Once the key organizational capabilities are identified, organizations can focus their efforts on developing and strengthening these capabilities to meet the challenges of the future.

Developing a Strategic Talent Management Plan

A strategic talent management plan is essential for organizations to effectively manage their workforce and bridge the capability chasm. This plan involves attracting, developing and retaining the right talent to fill critical roles and drive organizational success.

To develop a strategic talent management plan, organizations need to assess their current talent pool and identify any gaps or areas of improvement. They should also align their talent management strategies with their overall business goals and objectives. Create success profiles: Organizations should define what “great” looks like for their highestvalue roles. With a checklist of the knowledge, skills, attributes and experiences required for success in those positions in hand, business leaders can look beyond the usual suspects and customize their searches accordingly. Use available metrics: To create the best matches, business leaders should use any and all performance data available to them, taking care to keep the specifics of the high-value position in mind while gathering and assessing those metrics.

By developing a strategic talent management plan, organizations can ensure that they have the right people in the right roles, with the necessary skills and competencies to close the capability chasm.

Reallocating high performers to the most critical roles

One effective strategy for closing the capability chasm is to reallocate high performers to the most critical roles within the organization. High performers are employees who consistently exceed expectations and demonstrate exceptional skills and competencies.

By reallocating high performers to the most critical roles, organizations can leverage their expertise and drive performance in key areas. This helps to bridge the capability gap and ensure that the organization has the necessary capabilities to succeed. McKinsey research shows that 5 percent of employees deliver 95 percent of an organization’s value—and that companies that reallocate high performers to the most critical roles on a quarterly basis are 2.2 times more likely to outperform direct competitors than are those that revisited roles less frequently.

However, it is important for organizations to carefully assess the skills and competencies required for each critical role before making any reallocation decisions. This ensures that high performers are placed in roles where they can make the greatest impact.

Leveraging Technology for Organizational Capability

Technology plays a crucial role in enhancing organizational capability and closing the capability chasm. By leveraging technology, organizations can streamline processes, improve efficiency, and enable employees to work more effectively.

One way to leverage technology for organizational capability is by implementing advanced analytics and data-driven decision-making tools. These tools can provide valuable insights into the organization's capabilities and help identify areas for improvement. Make talent mapping a leadership priority McKinsey research shows that when HR processes are aligned with a business’s talent-to-value efforts, employee engagement can go up by 50 percent, training costs can go down by 50 percent and productivity can increase by 40 percent. 

Technology can also support talent management efforts by enabling remote work, facilitating communication and collaboration, and providing access to training and development resources.

By embracing technology, organizations can enhance their overall capabilities and overcome the challenges of the rapidly changing business landscape.