There is a common mistake we all do sometimes, and it’s to confuse capabilities and assets when developing an strategy.<\/p>\n
Assets<\/span><\/strong> (brands, facilities, patterns, customer connections, cash…) cannot be center of the strategy of a company. If the assets should be the primary component of a strategy, then any successful company just have to re-invest their assets on the same strategy and continue being successful.<\/p>\n The problem is that assets tend to depreciate (patterns expire, machinery loses value…).<\/p>\n A capability<\/span><\/strong>, by contrast is yours, it can’t be stolen or easily bought by a competitor. A capability does not depreciate if you are using it and you are improving it, quite the opposite, it tends to growth and be stronger.<\/p>\n The more basic example that comes to my mind always is use of the patterns. A pattern, as asset expires and its contribution to the company depreciates. On the contrary the capability the company has in terms of R&D makes that continuously is able to produce new patterns that fits on the market demand covering a niche where we can continue growing.<\/p>\n I do not suggest that you ignore assets, they play a major role in how to go to the market and the capacity you have to execute a plan.<\/p>\n Count your revenue and losses focusing on the assets you have, but focus on capabilities when you are defining the direction of your business.<\/p>\n","protected":false},"excerpt":{"rendered":"