The Dynamic Capabilities approach lies at the heart of the Resource Based View (RBV) of the family.
Dynamic Capabilities Framework has emerged as a way for families to capture the dominant logic of value. Consequently, families need to develop a much more comprehensive view of the environment(s) in which they currently operate or in which they aspire to operate in. The ‘components’ of these environments stretch well beyond in-laws and relatives. They include:
Local Labour Markets – The work the parent or both parents do and the availability of alternative occupations that you or your partner would like to have. For example, wanting to give something back by working for a charity or wanting to “buy a dairy farm in the Cotswolds to make cheese instead of working for that …”.
Legal and Regulatory Systems – these components are a source of untold stress as plant (the semi on a tree lined close) and machinery (the Ford S-Max) need taxation and insurance. Add utility rates, parking permits and maximum grass length on your lawn, and you can begin to appreciate the weight of this component.
Education systems – State school, grammar or private? The location of the plant and the proximity of an outstanding state school further the need for a dynamic approach. Pay close attention to Ofsted as they determine the value of your biggest asset, your home.
Banking and Finance – a source of tension within the family. The CEO (wife) and CFO (husband) must regularly assess the financial landscape. The CFO can scan the business pages of the weekend broadsheet for better mortgage rates but ultimately it’s the CEO that makes the decision. The CFO gets bogged down in the minutiae like who went to Caffe Nero for coffee instead of using the Waitrose Card to claim a free coffee instore.
National, regional and pan-national political and governmental systems and situations – Let’s face it, nobody really understands the way Brexit will affect the family ski holiday. Will the foreign policies of a new US president, and in particular his relationship with China, have any impact on when the new iPhone is available?
These components are part of a Dynamic Capability that purports to offer a comprehensive and multidisciplinary, research-based perspective on key strategic challenges. Adapted from (Teece, 2011, p. 4).
The dynamic capabilities framework is an entrepreneurial approach to family life that emphasises the importance of signature processes, both inside the family and also in linking the family to external partners. It also recognises the importance of critical resources and good strategy. It is not animated primarily by cost, promises or commitment concerns. Rather, it builds on the resource–based approach. It is focused more on opportunity than opportunism and on the efficient and effective transfer of information between and among the various members of the family.
Strong dynamic capabilities are those that have signature practices and business models. There are 4 key strategic resources that modern families possess
1 Of value to society.
2 Traits and interdependent bonds that are rare in the modern world.
3 Cannot be imitated.
4 Cannot be substituted for something else.
For example, a unique blend of soccer mom, overachieving daughter, a son with a bucket on his head and a dog that drags his bum across the carpet. In short, is a family (by which is meant parents, children and pets) ‘doing the right things’ (good strategy) rather than doing the wrong things right?
Adapted from Teece (2014)