As many organizations that have set out to build their capabilities know, understanding the importance of well-defined capabilities and identifying the steps needed to actually build them are two very different things.

What organizations need to keep in mind, explains Monitor’s Bruce Chew in this podcast, is that the best capabilities are actionable, meaningful and measurable. For the best chance of success, Chew explains, capabilities should be defined in terms of performance, and in such a way that it is possible to tell whether progress is being achieved. Well-defined capabilities are also meaningful to the organization, along three dimensions: threshold capabilities needed to sustain basic operations, differentiating capabilities that make an organization unique, and adaptive capabilities that allow the organization to respond to change over time.

Anchoring capabilities in these three characteristics—actionable, meaningful and measurable—can bridge the gap between high-level strategy and day-to-day management decisions, a gap that many executives struggle with.

Bruce Chew is a Partner and Global Thought Leader at Monitor. He is a renowned expert in enhancing the performance of organizations through improving operations and customer value. His articles on these topics have appeared in Harvard Business Review, Brookings Papers and MIT’s Sloan Management Review. Before joining Monitor, Bruce served on the Harvard Business School faculty for eight years, teaching executive and MBA classes on operations management. He holds a PhD in business economics from Harvard University and an MBA from Harvard Business School. E-mail him at Bruce_Chew AT Monitor DOT com.