Will Your Company's Capabilities Lead Directly to Profits? Think Again (page 3 of 3)

"For the software services industry, the ability to manage clients and the software development process are very critical. In other industries, other capabilities would take center stage," explains Kale. "In the pharmaceutical industry, for example, the capability to select the right R&D projects and the capability to manage them so as to get more blockbuster drugs than competitors do are critical.

"To understand the true underlying capabilities that influence performance, it is important to keep the context of the industry in mind; therefore, our results are not very easily generalized across industries," adds Kale. He illustrates this point by contrasting software services with management consulting. "To a certain extent, the two may be similar. Developing client-specific capabilities, for instance, may be equally relevant in both industries. But software development capabilities may not be that important in consulting. While using manpower efficiently is important in certain fields such as high-end strategy consulting, it may not be equally important across all forms of consulting. Therefore, when we generalize our findings across other industries, we need to exercise a degree of caution," he warns.

The authors hope that future research will continue to explore the differential impact of various capabilities on performance. "Not much research has been done to investigate this question in sufficient detail; our project is an attempt to push the envelope on this front," says Kale.