Growing the Bottom Line: Building Capability

It’s a common misconception in the business world that companies should focus solely on building and selling products. While this may lead to short-term success, it can limit a company’s growth and long-term potential. In reality, the true source of value for a company is its people and their ability to build and grow the company as a whole.

Building a company’s capability, or its capacity for success, is a crucial aspect of business that is often overlooked. This refers to a company’s ability to effectively manage its resources, adapt to change, and execute its plans. When a company invests in its capability, it’s investing in the future of the business and its long-term success.

For example, a company that focuses on building its capability may invest in giving people time an space to think, in research and development, and in reflecting on its collective assumptions and beliefs which account for the way things are done. By doing so, the company is not only building its ability to succeed in the present, but it is also preparing for the future. As the business grows and changes, a company with a strong capability will be able to adapt and continue to grow.

In contrast, a company that focuses solely on product development may find itself in a precarious position. If the product becomes outdated or is no longer in demand, the company may struggle to adapt and may eventually falter. On the other hand, a company that has built its capability will be able to pivot and adjust to the changing market, even if its original product is no longer successful.

Investing in capability also pays off in terms of attracting and retaining capable people. Companies that offer opportunities for personal growth and development are more likely to retain their people and see increased morale and engagement This leads to a stronger and more stable workforce, which can drive a company’s success.

In conclusion, while building products is certainly important, it is not the only, or even the most important, aspect of a company’s success. Building a company’s capability is critical for long-term success and growth. Companies that focus on building their capability will find that the payback of this investment is substantial, in terms of future success, employee retention, and overall growth. So, while it may seem funny that companies want their people to build products, the real value lies in building the company’s capability.

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