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A well-functioning organization provides clarity regarding the work required to achieve its objectives. It also provides a shared understanding of who will perform that work.
Capabilities are the know-how and expertise needed for an organization to create value. They are the backbone of the organization, and the organization should be designed to facilitate the development and utilization of the capabilities that will enable it to implement the business strategy. Identifying capabilities required in light of the business strategy is an important step in organizing what work will get done and how it will get done in the organization. High-level capabilities should be identified for each part of the organization. For example, a sales organization may identify “develop customer insights”, “acquire new customers”, and “grow customer relationships” as key capabilities.