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Building Capability

How to Define, Develop & Assess Digital Capability in Your Organisation


Digital dexterity should be built into business models. Yet keeping pace with evolving digital trends can make it hard to start with a digital capability strategy, let alone a digital transformation. 

If that wasn’t enough digitals in one sentence for you, this guide will talk all about defining and building digital capabilities, including how to get leaders to buy in, how to assess digital capability gaps, and how you can optimise L&D to build digital capability. (Get ready for even more digitals.) 

What is digital capability?  

Digital capability refers to the digital skills, knowledge, tools, processes and behaviours needed for an organisation to achieve its strategic goals. Digital capabilities are also often defined with a specific digital strategy in mind. 

3 steps to define digital capabilities

In short, to start: Defining digital capabilities is really an exercise in defining what you need to be able to do to thrive in an increasingly digital world. 

We created the performance learning management system (PLMS) to make it easier to define, refine and develop organisational capabilities. After capability discovery, Acorn PLMS is the only solution that guides learners to master the specific capabilities of their job roles (digital or otherwise) in order to accelerate organisational performance.

Step 1: Define the landscape 

Start with the organisation’s values and mission. Why does it exist, how does it run, what makes it different? Be clear in your mind what the organisation is made to do. 

Then it’s about where digital fits into that picture, because it’ll have a touch point for every job. For communications, it could be digital marketing. Maybe L&D will have digital learning or digital innovation in their own capability frameworks. The point is to be detailed when outlining the prerogative of your digital strategy. Understand the business value digital generates, and how that may evolve in future. 

That gives you the information to align a digital capability framework with business performance. 

Step 2: Define the purpose 

Every single capability needs to have a specific purpose. That goes beyond just supporting a digital transformation (though that may be a trigger for this process) to understand its place among all organisational capabilities. 

So, consider: 

Step 3: Name the work 

Every capability will describe work being done or the outcome of work being done.  

For example: 

The aim is to define in plain terms what employees need to do. If the name isn’t clear, no number of descriptions beneath it will make it understandable. 

If you’re drawing a blank when creating digital capabilities, we’ve got a growing list available for free here. We’ve also done a lot of the research for you so that each capability comes with a full description and three levels of competency, each with complete descriptions too. (And trust us, you won’t find that level of detail out there. We know—that’s why we’ve done the research.) 

Strategies for building digital capability  

Since digital capability touches pretty much every corner of your organisation, the process to develop it is fairly involved. But that doesn’t mean it’s impossible. You just need to: 

  1. Engage leadership 
  2. Create co-signed accountability 
  3. Assess digital capability gaps 
  4. Evaluate capability maturity 
  5. Design methods to build digital capability 
  6. And track progress as you go.  

Engaging leadership  

It all starts with leaders. They are ground zero for engagement. If you don’t get them to buy into building digital capability, then you’re not going to be building it. So, think about what leaders actually want, regardless of capability building.  

Is it improved employee performance across the board? Process improvement? Increased customer satisfaction? Team effectiveness? Ease in responding to market? 

Then: What do leaders stand to lose if they don’t buy into capability building? Taking a hard heaven vs hell stance (with capability building as the pathway to heaven) will make it an easy choice. 

At the very least, capability building improves organisational health by up to 46%. Well-done transformations like this also boost other business drivers (cost efficiency, operational excellence, growth), but they require a central point for the organisation to rally around.  

The reason that most digital transformations fail is because organisations don’t have the right skills, knowledge, or behaviours to sustain them. Most training programs occur in steady-state, BAU periods, which means that leaders aren’t prepared for the fast-paced nature of a transformation, let alone economic uncertainty.  

So, if anything, building digital capability is about equipping leaders with the talent they need to get their jobs done.  

Co-ownership between HR and business units  

Capability building takes a village. No single department has all the answers when it comes to digital capability. Digital literacy touches everyone, but digital innovation may be for a select few roles. That’s why HR needs to establish accountability and co-ownership between teams. 

It’s important that this isn’t about palming off responsibility. You are sharing the load in the most optimal way, by bringing leaders in only when their insight is needed. Be clear that you are partnering with them on this process, so that they’re not adding this process end-to-end to their already busy plates.  

If leaders know you care about their capabilities, they’ll also be more likely to champion the doing of capability building, i.e. training and development.  

Understanding digital capability gaps  

When you have an understanding of what capabilities we’re focusing on, you can start to figure out what’s missing or not quite up to scratch. 

Capability assessments come in a few forms. It’s best to use them together so you can make the most data-informed decisions on development. 

  1. Start with self-assessments for employees. Getting them to evaluate their own competency is an easy way to engage them with a digital capability framework, by the way. 
  2. Compare the self-assessments with manager assessments. The point is that managers provide a more objective view of employee competency. 
  3. Subject matter expert assessments are generally used for specialist capability sets. In this case, think digital leadership

Everything should be graded against whatever levels of competency you use. We’d say go for something that makes sense when assessing one’s current skill and knowledge level, like: 

Unsurprisingly, we also recommend using digital technology to facilitate this. It’s the easiest way to centralise all the data you collect (for use in the next step) and it’s sustainable as your workforce grows. Plus, if you didn’t use tech to evaluate digital capabilities, well, what exactly would you be evaluating? 

Assessing digital capability maturity  

Maturity differs to gaps in the sense that it shows the collective view of digital capability. That helps you identify areas for development at a high level. 

Capability maturity generally exists on a linear progression, from unpredictable and reactive ways of work to fully optimised work that focuses on continuous improvement. The point is to have digital capability at the highest level of maturity, which essentially means capability building is sustaining forward momentum

How you diagnose maturity is up to you. We’ve seen a lot of organisations use ready availability of a capability (as in, if it’s currently being used to full potential within your organisation) against its impact on competitive advantage.  

Most organisations will arrange maturity on a heat map, so that you have a visual model of what’s in need of urgent action (either development or creation) and what can wait (i.e. is readily available).  

Methods to build digital capability  

The penultimate step: Building capability.  

The thing is that most employees want to build digital capability, given the tech-reliant nature of today’s world. They’re already using digital technology, strategies, and channels. So, meet them where they’re at and put learning in the flow of work.  

This isn’t a definitive list of methods. Rather, we want to make the point that you can embed capability building into your current L&D strategy. It’s the strategy that needs most of the work; building capability need only reflect the way in which employees actually work. 

Tracking progress  

Continuous improvement is the glue that keeps this whole thing together. If you’re not aware of what’s helping and what’s hindering digital capability building, then you may as well scrap the project because you won’t have any meaningful data to justify future investments. That also means your methods will remain reactive rather than proactive, and you’ll continue to be seen as a cost centre. 

But we digress. The solution here is to continue reassessing digital capability and the methods you use to build it. 

Key takeaways 

Considering digital technologies (at the very least) touch every corner of your organisation, building digital capability is no small feat. That doesn’t mean it’s impossible. You just need to: 

  1. Get buy-in from your leaders 
  2. Establish accountability through co-ownership 
  3. Identify your individual digital capability gaps 
  4. Prioritise those gaps by business risk 
  5. Rethink L&D and how you can embed it in everyday work 
  6. Keep track and continuously improve the whole process. 

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