I follow Nassim Taleb’s (author of The Black Swan: The Impact of the Highly Improbable) lead which is to not pay too much attention to business news otherwise you might start to believe you really do know what is going on in the market.  He says, don’t read it every day, it’s better to absorb, like osmosis. Every now and then, something really worth getting into pops up.

Last Friday I picked up a Financial Review for a plane trip perusal and  found an article about NAB CEO, Andrew Thorburn, in the Boss Magazine.  It grabbed me when I noticed a quote from him: to turn around the bank, he wants management to focus on “people and capability, risk management and culture”.

I agree with Thorburn’s messages with one important spin on it.  I would word it differently and say: management should focus on “the capability of the organisation to perform while managing risk”.

My view of capability is that it needs to be viewed at the organisation and not the person level and that it includes culture and the ability to manage risk.  While a builder wishes to hire a carpenter that can hammer nails, cut wood and assemble a structure, the builder also wants a carpenter that can manage uncertainty (risk).  In fact the builder wants his organisation good at building AND good at managing risk.  Both require a strong culture, however, capability is much more than culture.

How do you know if your organisation is capable?  The best way I have found is to measure it against a defined capability model.  Very few organisations are yet to take this approach at the organisation level, however, more and more people like Thorburn are talking capability.  Soon enough, measuring it will become a focus for most organisations.

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