Capability-Driven Transformation: The Key to Sustainable Agility
By Cesario Ramos.
A key difference between Toyota and many other companies is how they develop their organizational capabilities over time. As the graph shows, Toyota’s approach leads to steady, ongoing growth through continuous improvement. Other companies, however, often see progress followed by setbacks, losing the gains they made.
Source: Extreme Toyota: Radical Contradictions That Drive Success at the World’s Best Manufacturer
Rather than relying on fixed frameworks, some companies focus on steady, ongoing growth through capability-driven transformation, which leads to sustainable progress. In contrast, others often experience cycles of improvement followed by setbacks, losing the gains they worked hard to achieve. This ties directly into the Creating Agile Organizations (CAO) approach, which focuses on improving specific capability gaps in the organization rather than following a fixed Agile framework. Here’s how this works:
Building Capabilities Over Time
Successful companies prioritize the development and reinforcement of core capabilities, integrating them into day-to-day work so they become part of the organizational fabric. Similarly, the CAO approach emphasizes identifying and addressing gaps in crucial areas—such as strategic focus, processes, rewards systems, team work and leadership—to ensure steady, sustainable progress. The goal is ongoing improvement that doesn’t depend on external frameworks but instead builds from within.
Avoiding Short-lived Gains
Many companies adopt Agile frameworks without addressing underlying capability needs, which often results in only temporary improvements. Without foundational changes, progress stalls or regresses, as shown in the cyclical setbacks. The CAO approach avoids this pitfall by focusing on developing core capabilities with organisation re-design that support long-term success, enabling organizations to avoid backsliding and retain their achievements.
Transformation as Continuous Growth, Not a Framework
Transformation should go beyond obtaining certifications or following rigid processes. For CAO, it’s about the continuous development of an organization’s unique capabilities, allowing companies to grow and adapt in ways that fit their specific needs and challenges. This approach enables companies to evolve their capabilities in alignment with their operations and strategic goals.
By focusing on closing capability gaps rather than merely implementing Agile practices, organizations can foster transformations that lead to lasting improvements. This is the essence of Creating Agile Organizations: building sustainable agility through targeted, meaningful capability development.