6 mins to read

Six steps to identifying the capability gaps holding your business back

Learning Adviser

xUnlocked Learning Team

Many organisations know they need to build capability. Far fewer can say, with any confidence, where their most important skills gaps actually lie.

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When a new challenge emerges, whether that is AI adoption, sustainability requirements, regulatory change, or shifting customer expectations, the pressure to respond quickly is so strong that companies move straight to a quickfire learning solution: content is commissioned, platforms are configured, and launch plans are made.

Yet a critical question remains unanswered: what tangible difference will it make?

What does it mean to diagnose capability gaps?

At xUnlocked, we believe the most successful learning journeys begin with Prepare: diagnosing the capability gaps that matter, understanding the business challenge, identifying the capabilities that will enable success, and designing a solution around each organisation's unique needs.

Take AI as an example. Most organisations today would say they need AI training, but the underlying reasons and challenges vary significantly. One business may need to address governance risks; another may need to build buy-in, confidence and adoption; while a third may be focused on productivity or identifying commercial opportunities. Although each organisation begins with the same request, the capability required and the learning solution are often different.

Effective diagnosis ensures learning addresses the real business challenge, rather than simply the most obvious one.

What are the six steps to identifying capability gaps?

The process begins by shifting the conversation away from learning and towards business outcomes. At xUnlocked, we work through six steps to help organisations pinpoint where capability matters most.

Step 1: Start with the business challenge

Many organisations approach learning providers with a specific content solution they think they need. But understanding the business challenge the learning needs to solve is far more important.

At xUnlocked, we begin this process by exploring questions with our clients, such as:

What strategic priorities is your organisation trying to achieve?
What external pressures are driving change?
What risks need to be managed?
What behaviours are currently limiting your success?
What would success look like to your business in real terms?

The challenge may be around financial capability, sustainability, AI readiness, or, increasingly, a mix of areas reflecting the interconnected nature of today’s risks and organisational decision-making.

But the underlying principle remains the same: capability-building should always start with business objectives and defining what success would look like if capability improved. The clearer the definition of success, the easier it becomes to identify the capabilities that genuinely matter.

Diagnosis creates clarity before investment begins.

Step 2: Understand where performance is breaking down

Once the business challenge is clear, the next step is understanding where capability gaps are currently affecting performance. This requires moving beyond asking what people know to asking what people need to do differently.

The most useful capability conversations focus on practical realities. For example:

Where are people struggling to make decisions confidently?
Which topics create uncertainty or inconsistency?
Where do teams operate with different levels of understanding?
What conversations are employees avoiding because they lack confidence?
Which emerging issues pose a risk to the business?

This process often reveals knowledge disparities across an organisation. Specialists may possess deep expertise, while the broader workforce lacks a shared understanding of the topic. Teams may use different language to describe the same issue. Important strategic priorities may be understood well by some functions but poorly by others.

Before organisations can build advanced capability, they often need to establish a common foundation.

Step 3: Identify who needs to learn what

A common mistake in organisational learning is assuming everyone requires the same solution. In reality, capability needs differ significantly across roles, functions and levels of seniority.

A finance professional, a sustainability specialist and a client-facing commercial team may all need to understand the same topic, but they will need to understand it in different ways and apply it in different contexts.

This is why audience segmentation is such an important part of the diagnostic process. We work with organisations to identify:

Different learner groups
Existing levels of knowledge and confidence
Role-specific capability requirements
Future skills requirements
Opportunities for shared learning

A global financial institution, for example, may require different learning pathways for early-career professionals, senior leaders, client-facing teams and specialist functions.

The capability challenge may be shared, but the learning solution should not be.

Step 4: Align organisational and functional capability needs

Organisations may already have skills frameworks in place. The challenge often lies in aligning different priorities.

Central learning teams, for example, may be focused on organisation-wide capabilities such as communication, leadership, resilience or AI literacy. At the same time, individual business functions often operate against specialist professional frameworks demanding their own learning across technical requirements.

The result can be competing priorities, fragmented ownership and inconsistent definitions of capability. Questions organisations should consider include:

Which capabilities matter across the whole organisation?
Which capabilities are specific to individual functions?
How do individual teams use different terminology to describe similar skills?
What foundational knowledge is needed to improve common understanding across groups?

One of the most valuable outcomes of effective diagnosis is effective skills or capability mapping, which connects organisational priorities with the needs for functional expertise.

This process frequently uncovers opportunities to build stronger alignment across teams. Different functions may be trying to solve similar problems, but variation in language and different levels of understanding result in overlapping areas that could result in duplication of effort. In these situations, establishing a common foundation can often be just as important as developing specialist expertise.

Step 5: Prioritise the capabilities that will create the greatest impact

Every organisation has more capability gaps than it can address at once. The challenge is determining which gaps matter most. Effective diagnosis requires organisations to prioritise according to:

Strategic importance
Business risk
Regulatory requirements
Commercial opportunity
Organisational readiness

Organisations can sometimes become distracted by headline-grabbing skills that dominate industry conversation. AI is a good example, where the demand for technical expertise, which may tease the prospect of innovation, can override the wider and more immediate need to reduce risk exposure via softer (human) skills in communication, critical thinking and ethical AI governance.

Effective diagnosis helps separate genuine business priorities from attractive but less urgent capability investments. Learning is most effective when it focuses on the capabilities that will make the greatest difference to business performance, rather than following the latest trend.

This creates momentum and ensures learning investment is directed where it can have the greatest impact.

Step 6: Determine the right solution

Only after the diagnosis is complete should organisations begin discussing the specifics of the learning programme. At this stage, the agreed approach may differ from what was initially expected. We work with clients to agree on the most effective solution, considering a wide mix of options, including:

Curated learning
Bespoke content development
Expert-led workshops
A blended approach that combines multiple learning formats into a single capability journey

Different organisations require different solutions, a process we describe in more detail in our next article in this series, How to design learning that people actually apply at work.

How does xUnlocked approach capability diagnosis?

The process, however it unfolds, remains consistent: understand the business challenge, identify where capability matters most, and design learning solutions around real organisational needs.

The right diagnosis is the essential foundation upon which successful learning is built. By working with organisations to determine the specific capabilities that will enable the business to succeed, we provide the right starting point for everything that follows.