What are the dynamic capabilities
Dynamic capabilities are the different skills, processes, procedures, organizational structures, decision rules and disciplines that allow the detection and capture of opportunities that appear in a company. This is the academic definition. Hope you understand it. If not, keep reading please.
Dynamic capabilities enable companies to create, deploy, and protect intangible assets that, in the long term, will enable superior business performance. Hence, it is important to detect in your company what these capabilities are and that you promote them. Firms with strong dynamic capabilities are much more entrepreneurial and better adapted to changes in the market.
Why do we call them dynamic capabilities?
Well, as opposed to non-dynamic capacities. The dynamics allow to change, to evolve the company. The rest of a company's capabilities allow it to operate normally, and obviously they are just as important as the dynamics. It's just that having dynamic capabilities in fast-moving environments like today has become a competitive advantage. Hence we are now talking about this ability.
Types of dynamic capacity
There are at least 3 dynamic capabilities that you should develop:
- The ability to know how to detect opportunities and threats.
- The ability to know how to take advantage of opportunities.
- The ability to maintain, combine and grow the tangible and intangible assets of our company.
In relation to the latter, one of the intangible assets of our company is the business model.
The adaptation of business models is the object of study of my doctorate: the ability to adapt a business model when this is necessary for the survival of the company. My general research question is “If everyone knows that when the market changes, companies also have to change to adapt. Why are there companies that do not change and die?
Obviously the answers are many and not all are the field of the "management” Some of them are explained from the point of view of people's psychological behavior (risk aversion, fear of change, fear of failure, etc.). In my case, I analyze the reasons from a business point of view, not from a psychological one.
At least there is
Returning to dynamic capacities, as I have already mentioned, in my research and in my professional work, I am focusing on the capacity of "Business Model Adaptation", that is, the capacity to change and adapt the business model of a company to adapt to changes in their environment.
At the moment in which we live, with Amazon and Alibaba spreading all over the world, COVID-19 disrupting the markets, in a world where the Earth is flat and the market is almost infinite, and where all information can digitize… it is clear that we must adapt and change.
On the other hand, I think it is essential that someone help companies to adapt, instead of trying to make companies disruptive and that they are the ones who break and transform the markets. It seems unrealistic to me to think that SMEs in our country are going to be able to survive by being disruptors... Some of them, obviously, but I think it is more appropriate to help them develop the capacity to adapt. It is clear that to adapt successfully you have to be creative and innovate... one thing does not take away the other.
Well, I won't go any further. In this article I only wanted to explain a little better what dynamic capabilities are (Dynamic capabilities), and that this reflection will help you think about which are those of your company or those of your person. Are you able to detect opportunities and threats? (or put another way, do you have time to detect opportunities and threats?) and are you able to recombine your company's resources to take advantage of those opportunities? Does day to day drag you and you can't stop the inertia of your business to adapt it? Do you dare to do it?
I hope I have gotten the reflection.
as I have already commented
You will find more information on dynamic capabilities here. It is a closed article by the best specialist in dynamic capabilities. Just by reading the abstract it will be useful to you. If you have a way to get the entire item, you'll love it.
If you want to know more about business models, there are two articles of mine that can help you:
- On the difference between strategy and business model
- Whether or not they have changed the types of business model
- as I have already commented
Let's keep talking