“Each business-organization follows a unique path of its capability development. Therefore, the vastly used cookbook recipes of capability development do not guarantee same results across all organizations,” said Aurangzeab Butt, who successfully defended his doctoral thesis at the University of Vaasa.
Butt’s doctoral research is a longitudinal study of organizational capability development process. The dissertation analyses the heterogenous development paths of project portfolio management capability (PPMC).
The capability of an organization is its potential ability and capacity to get meaningful business outcomes, for example, new product development capability. A business organization can possess several different capabilities. Business organizations generate customer value with these capabilities.
Different organizational structures, business processes, and talented people altogether combine and create these capabilities. Business organizations develop, maintain, upgrade, and combine different capabilities in response to changing business environment.
“The performance of an organizational capability is dependent on the business context of its development. Equally important for the leaders and managers is to understand that organizations are social systems where the development of one capability affects other capabilities too. An isolated focus on the development of one single capability shall only lead to short-term performances. Whereas, in long-term, such capabilities resist to face new business challenges,” said Butt.
According to this doctoral research, the ever-expanding resource base of successful organizations establishes a shared vision about future. These organizations can sustain their success by combining capability inventing, refreshing, and the continuous refinement efforts. Otherwise, capabilities developed through a readymade singular approach become expensive in the long run. It is because of that the value creation potential through such capabilities decreases in the dynamic business environment.
Conceptualizing project portfolio management capability and investigating its development
The main focus of the doctoral research is on project portfolio management capability. Like many others, project portfolio management’s cookbook recipes are frequent in literature. Whereas, investigating its development as an organizational capability is rare.
Aurangzeab developed a framework for investigating the development of project portfolio management capability (PPMC) in business organizations. Then collected data spread over nine years from an industrial organization. The findings show that the development of project portfolio management capability (PPMC) were different across different businesses of a single multinational industrial organization. It is because the capability development context was different between these business units. Therefore, the talented people in different businesses learned a different way-of-working to practice the same organizational capability, PPMC.
For a detailed analysis of capability development, this doctoral research studied the day-to-day work accomplished through the project portfolio management capability – these are called Work routines of an organization. These work routines are responsible for business performance outcomes.
Learning organizations can develop high performing capabilities
This doctoral research has confirmed that high performance from an organizational capability is not universally achievable across all organizations. High performing capabilities develop with an approach similar to learning organizations. It is because learning organizations can simultaneously activate three learning cycles. Each learning cycle serves its special purpose in organizational capability development.
The capabilities developed through these three learning cycles are more likely to produce high business performances. Whereas, limited learning through a single cycle shall only lead to short-term performances.
In this doctoral research, Aurangzeab Butt has used these three learning cycles as the mechanisms responsible for making, changing and breaking of organizational capability development paths.
Earlier in literature, path dependence has long been considered as a reason for organizational resistance towards change.
Contrarily, this PhD research shows that path dependence can also be a source of creating high performing organizational capabilities. It is possible by the making, changing, and breaking of capability development paths by combining the three learning cycles – like a learning organization. Furthermore, without the activation of all three learning cycles these organizational capabilities offer unintended resistance to change. Such capabilities become only best practices on the path of limited development choices for future.