Learning Log 2 - Part 1

Capability Audit

A capabilities audit can help you monitor your company’s intangible assets. It will highlight which ones are most important given the company’s history and strategy, measure how well the company delivers on these capabilities, and lead to an action plan for improvement (Smallwood & Ulrich, 2004). The capabilities you audit should reflect those needed to deliver on your company’s strategic promises. By completing a capability audit would help HR professionals become better capability audits. The idea, is not necessarily to boost weak capabilities but to identify and build capabilities that will have the strongest and most direct impact on the execution of strategy.

Capability	1 (low)	2	3	4	5 (high)	Most Critical  (2-3)
Talent		x
Speed			x
Shared mindeset				x		x
Learning			x
Collaboration				x		x
Innovation			x
Accountability				x
Leadership			x
Strategic unit			x
Efficiency			x
Customer connectivity					x	x
Social responsibility				x
Risk		x

I have completed the above capability audit for my organization based on the scorecard by Ulrich et al. (2012). The capabilities that I have rated the most critical are shared mindset, collaboration, and customer connectivity. In the financial services industry those three capabilities are what drives sales and business forward. By looking at the chart we should increase our training on shared mindset and collaboration to best fit our company’s value. To assist with boosting these capabilities, HR can put together a class to train employees on how teamwork is essential for customer satisfaction. To have an increase in shared mindset, leaders can communicate better on the core values of the organization and be more transparent about mission of the company. When employees have the same shared mindset, they understand better what is expected of them. Overall our company scored well on the capability audit and just need to work on retaining their employees and taking on more risk. By continuing to focus on the three most critical capabilities of the company, leaders will have more of a competitive advantage. 

References:

Ulrich, D., W., Younger, J., Brockbank, & Ulrich,M . (2012). HR from the outside in: Six competencies for the future of human resources.

This textbook discusses the six paradoxes of HR. It explains how HR should be run to deliver the best business outcome.

Smallwood, N., & Ulrich, D. (2004, June). Capitalizing on capabilities. Retrieved January 18, 2017, from https://hbr.org/2004/06/capitalizing-on-capabilities

This article is about how leaders can evaluate organizational capabilities and build the ones needed to create intangible value. It talks about how to do a capability audit which provides high level picture of an organization’s strengths and areas for improvement.