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Is Capability a Function?

In response to a recent post I did on Function vs Functionality, I received a comment from Dennis Stevens at www.dennisstevens.com in which he said:

“For about the last decade I have been using Capabilities to be what you are calling Function here. A capability is something a business does – regardless of how they do it. The nice part of Capability is that it doesn’t change, even when the implementation changes. Capabilities help you overcome the “How Trap” when eliciting requirements, when planning systems releases, and when performing organizational improvements and designs.”

My response to Dennis was:

I also use the term “Capability” but in a different way to the definition you gave. What a business does (more precisely what it OUGHT to do), regardless of the how it does it, I define as a Business Function. The different means by which a Function may be performed, I call “Mechanisms”. An example of this would be the Function “Accept Customer Order”. This could be carried out over the telephone, via fax or as an online transaction, i.e. three different Mechanisms for one Function. I align Capability with the standard English meaning of the word, i.e. what an enterprise is capable of doing and, in this sense, as with the title of your HBR article (which Dennis mentioned later in his comment), it may be associated with productivity. Capability couples a Function with elements that increase its depth, scope, productivity, etc. These elements could include knowledge, skills, technology, product portfolio, geography, and many others.

When talking to the executives of enterprise that want to grow Capability in a certain area, I ask a series of stepped questions beginning with the words:

“Are you currently capable of.. ”.

An example, is an insurance company that wanted to sell insurance products online throughout the US.

The first question asked was, “Are you currently capable of selling insurance products?”
The answer was “yes”, so no problem.

The next question was, “Are you currently capable of selling insurance products in all states?”
Now the answer was “no”, because the Enterprise did not have a licence for particular states. The solution was to obtain these licences.

The next question was, “Are you currently capable of selling insurance products online?”
Again, the answer was “no”, because their systems did not enable them to do this.

This enterprise was able to perform the Function “Sell Insurance Product”, but it did not have the Capability to sell in all states nor did they have the Capability to sell online. Two separate initiatives were put in place to provide this Capability.

This shows is how Capability is essentially different to Function.

Other posts on Capability are: Does Capability Equate to Process? and  Capability vs Requirement

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2 Responses to “Is Capability a Function?”

  1. Skip Lumley March 1, 2012 7:24 pm #

    I’ve been looking up various approaches to Capability modeling. Your example is thought-provoking and leads me to think you might define a Capability as an implementation of a Function in a specified context, which is novel as far as I can tell.

    That would make the distinction between a functional model and a capability model quite clear. But it makes me wonder about the feasibility of modeling capabilities under the definition.

    One reason is that each Function might have its own set of ‘context factors’ – such as geography (U.S. state boundaries), licensing (U.S. state laws) and interfaces (online, face to face, over the counter, automated kiosk, etc.) as in your example. However, I can see no reason why those factors should be the same for all Functions, so the result could be a very complex model. Another reason is that the factors might interact – geographic distinctions would be less important for online selling compared with selling via the other interfaces – and representing those interactions in a model would produce even greater complexity.

    So your example suggests it would make more sense to think of capability inventories based on functional models of the enterprise, rather than capability models.

    • John Owens March 3, 2012 11:38 pm #

      Hi Skip

      Thanks for the comment.

      Capability, by its very nature, is the intersection of several, in some cases very many, things. However, the Capability Model would not necessarily be overly complex and could easily be represented in a relational data structure.

      For example, an enterprise might want to be able to provide accountancy services to corporate clients worldwide. The question then is, “Do we have the Capability to meet this requirement?”.

      Without building a Capability Matrix the enterprise could not answer this question because, as you point out, there might be licensing constraints and other constraints at both regional and national levels. The Capability Matrix would enable the enterprise to define the needs in all relevant terms and, hence, identify all areas where it does and does not have the Capability to meet them.

      Intersection entities in relational data structures are a very powerful why of easily building these multi-dimensional matrices.

      Regards
      John

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