How do you grow a capability?

The “dynamic capabilities” literature, I think, is a bit of a mess: lots of jargon, conflicting arguments (and levels of analysis) and little agreement even on a basic definition.  I don’t really like to get involved in definitional debates, though I think the idea of a capability, the ability to do/accomplish something (whether individual or collective), is fundamental for strategy scholars.

Last weekend I was involved in a “microfoundations of strategy” panel (with Jay Barney and Kathy Eisenhardt).  One of the questions that I raised, and find quite intriguing, is the question of how we might “grow” a capability.  The intuition for “growing” something, as a form of explanation, comes from simulation and agent-based modeling.   For example, Epstein has argued, “if you didn’t grow it, you didn’t explain it” (here’s the reference).   I like that intuition.  As I work with colleagues in engineering and computer science, this “growth” mentality seems to implicitly be there.  Things are not taken for granted, but explained by “growing” them.  Capabilities aren’t just the result of “history” or “experience” (a common explanation in strategy), but rather that history and experience needs to be unpacked and understood more specifically.  What were the choices that led to this history?  Who are the central actors?  What are the incentives and forms of governance?  Etc.

So, if we were to “grow” a capability, I think there are some very basic ingredients.  First, I think understanding the nature, capability and choices of the individuals involved is important.  Second, the nature of the interactions and aggregation matters.  The interaction of  individuals and actors can lead to emergent, non-linear and collective outcomes.  Third, I think the structural and design-related choices (e.g., markets versus hierarchy) and factors are important in the emergence (or not) of capabilities. Those are a few of the “ingredients.”

I’m not sure that the “how do you grow a capability”-intuition is helpful in all situations.  However, I do find that there is a tendency to use short-hand code words (routines, history, experience), and the growth notion requires us to open up these black boxes and to more carefully investigate the constituent parts, mechanisms and interactions that lead to the development or “growth” of capability.

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3 Comments on “How do you grow a capability?”

  1. PE says:

    A lot of your observations and suggestions here are quite similar to what someone from an actor-network theory/science and technology studies perspective might say about this literature and the concept of capability. ANT argues for a symmetrical treatment of humans and nonhumans in an analytical situation. In this case one could say that the problem with “capability” is that it is a rather human-centric notion that tends to focus the analysis on intangible human cognitive resources, at the expense of the material non-human actors that are also involved. For example the concept of “capability” doesn’t really incorporate the fact that to have a “capability,” i.e. the ‘ability to do something,’ usually depends on the availability or development of specific (and often material) tools. Until this imbalance is addressed, capability will continue to be a lopsided concept. So your suggestion to focus on growth could be also rephrased as the need for ethnographic attention on the specific circumstances of the emergence of material arrangements that enable certain capabilities.

  2. Aidan walsh says:

    Did Eisenhardt mention rules? She and Chris Bingham are doing interesting work on rules as strategy articulation?

  3. teppo says:

    Aidan: Yes, Kathy did indeed talk about her work (on rules, heuristics, etc) with Chris and others (e.g., Jason Davis, Nathan Furr) – http://scholar.google.com/scholar?q=eisenhardt+rules&hl=en&btnG=Search&as_sdt=1%2C45&as_sdtp=on


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