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Sustainable Growth Through Strategic Innovation

Driving Congruence in Capabilities

Mitsuru Kodama

From detailed reviews of existing dynamic capabilities, this book presents a theoretical model of a strategic innovation system as a corporate system capability to enable a large company to achieve strategic innovation. The book includes in-depth case studies to illustrate the importance of strategic innovation capabilities.
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Chapter 3: The concept of capabilities congruence: theoretical framework from three insights

Driving Congruence in Capabilities

Mitsuru Kodama

Extract

This chapter presents the concept of “capabilities congruence,” which is a business factor in large corporations that brings about sustainable growth over the long term by achieving strategic innovation as the corporation enacts dynamic capabilities and strategic innovation capabilities. The chapter also clarifies three important insights about capabilities congruence (Insight-1: Dynamic congruence with the corporate capabilities (corporate systems) with environments; Insight-2: congruence between different capabilities within corporations (in corporate systems); Insight-3 congruence by orchestrating different co-specialized assets both in and out of corporations). As new perspectives, the chapter describes how leaders and managers in large corporations achieve congruence across diverse internal and external boundaries by perception and cognition of the changing boundaries between environments and corporate systems and between various capabilities in corporate systems, in regards to the process of changing capabilities between their own companies, the environment and other companies. In rapidly changing environments, factors for executing capabilities congruence dynamically are of great importance for a corporation to achieve strategic innovation. Moreover, regarding capabilities between Capabilities Maps and between the domains in those Capabilities Maps that are often born in large companies, this chapter discusses how negative interactions can seriously inhibit capabilities congruence.

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