Year after year, companies that create and maintain value are very few. A lot attempt to, but a recent study of two thousand companies over ten years by a consulting firm, Bain & Co., unveil that only one in ten achieved a profitable and sustained growth. The only activity that sets such achiever apart: They usually use capability sourcing in more innovative ways than their opponents. In essence, they have moved way above mere cost-cutting with outsourcing.

Based on the above research, it was discovered that leading companies often use capability-sourcing to create five strategic capabilities: value and risk, global talent, disrupt traditional business models, overseas subsidiaries, to seize new local market opportunities. However, in this post, we will explore only two of the above mentioned strategic capabilities.

Develop Partnerships that Manage Value and Reduce Risk

In spite of the high risks associated with outsourcing that has even increased over time, a lot of companies continue to handle their sourcing relationships independently in order to exert control. Therefore among the company’s sourcing defense, the company prequalifies and consistently monitors its overseas factories to make sure that quality management systems are in shape. Though the risk of a quality issue arising cannot be erased totally, therefore a crucial step is to minimize potential problems and take necessary action when one occurs to stop its reoccurrence.

Global Talents

To tap into global talents especially in emerging markets, shortages of talent can hinder a company’s capability to grow effectively. It is essential to overcome this obstacle which will not only save cost but will as well nurture a rich talent pool that will deliver an increasing stream of the company’s patents. Hence, tapping into global talents is a necessity for effective growth in a company.