‍The Comprehensive Taxonomy of Capability Framework Design

‍Executive Summary: The Architectural Choices for Capability Framework Design

When I build a capability framework for an organisation, I see it as a set of design choices. Those choices sit across three axes: Structure (how it’s organised), Semantics (how we define it), and Psychometrics (how we measure proficiency).

A modern framework can’t just be a static checklist of what people need to do in a single role. That’s competency. Instead, it has to be dynamic — a living system that helps an organisation move talent around, respond quickly, and stay agile. That’s capability.¹

For me, capabilities are about the overall potential of an organisation — the ability to take on complex tasks, adapt when things shift, and still deliver on strategy. They’re more stable than individual skills and deliberately cross-functional.² The job in design is to make that potential clear, and then build a structure that links human potential directly to business value.

That’s why I always frame a capability framework in business terms — it has to describe what the organisation does, not simply mirror reporting lines or internal hierarchies.⁴

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Part 1: Foundational Architecture: Reconciling Terminology and Purpose

1.1 Capability vs. Competency: Defining the Strategic Delineation

When I start designing a capability framework, the first step is always clearing up language. We need a precise and consistent taxonomy, especially around the difference between capability and competency.

Capability as Strategic Potential
I think of a capability as the organisation’s capacity to apply competencies in different situations and contexts.² A capability is broader — a stable, cross-functional grouping of knowledge, skills, behaviours, processes, and tools that together deliver organisational outcomes.³ Unlike individual skills, which can expire quickly, capabilities last longer and are tied to the organisation’s context and strategy.³ This is why they’re so useful for enabling talent mobility and shaping workforce planning at scale.⁷

Competency as Measurable Performance
Competency is narrower. It’s about the specific skills, knowledge, and abilities an individual needs to perform a job effectively.² In practice, it’s a measure of effectiveness — how well someone applies their skills, knowledge, behaviours, and tools to get work done.⁶ Competencies tend to be role-specific, and they’re mostly used to assess current job performance and employee development.² I also prefer to use the term proficiency rather than competence, because “competent” sounds binary (either you are or you aren’t), whereas proficiency captures levels of mastery across a spectrum.⁷

The Role of Skills and KSAOs
Skills, whether technical or soft, are specific and measurable — and often transferable.³ When combined with behaviours, knowledge, processes, and tools, they become the building blocks of a capability.³ KSAOs (Knowledge, Skills, Abilities, and Other Characteristics) remain the traditional components used to define jobs. Knowledge is the factual or procedural information you apply; Skills are learned, often physical or technical actions; and Abilities are more general, enduring capacities.⁹ Competencies often draw on KSAOs, blending technical requirements with characteristics like communication or teamwork.¹¹

Table 1 below summarises the key differences between these terms and how they influence framework design choices.

Table 1: Semantic Architecture: Capability vs. Competency vs. Skill

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1.2 Identified Implications for Framework Consistency

For me, the whole point of a capability framework is to drive agility and make talent more mobile across the organisation.¹² But if a framework is written too narrowly — just as a set of KSAOs or role-specific competencies — it ends up boxing people into silos. That kind of rigidity makes it hard to see employees in terms of their potential, their adaptability, or their capacity to take on new challenges.³

That’s why I always design with a hybrid approach. At the top levels (Level 1 and 2), I use broad, stable capabilities to align with strategy. Then, at the lower levels (Level 3 or 4), I bring in the more detailed competencies and behavioural indicators that are useful for day-to-day development and performance management.

Another critical point: capabilities must be quantifiable and outcome-driven.¹³ Too many older models focused only on listing inputs — what knowledge or skills a role needs.¹⁰ But to be strategically relevant, a capability has to link directly to the business results it enables, whether that’s customer satisfaction, reduced costs, or improved innovation.¹³ If I can’t tie a capability back to a measurable business outcome, I’d question why it should even exist in the framework. This forces the design to stay grounded in business impact rather than theory.

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Part 2: Macro-Structure Design: Organising the Capability Hierarchy

2.1 Hierarchical Structure Options and Granularity

When I design a capability framework, I think of it as a map of how the organisation functions. To make it useful, it’s usually built as a hierarchy; anywhere from 2 to 5 levels deep, depending on how complex the organisation is and how much detail is needed.¹⁵ ¹⁶

The Multi-Level Architecture

• Level 1 (Core Domains/Groups): At the top, I set broad organising categories rather than specific capabilities. Think Operations, Customer Engagement, or high-level groupings like Personal Attributes and Relationships.¹⁵ Sometimes Level 1 is just a way to categorise the framework differently for different audiences — for example, executives vs L&D managers — without changing the actual capability content.¹⁶
• Level 2 (Sub-Capabilities/Clusters): Here, I group related activities or competencies, like Billing under Finance, or People Management under Leadership.¹⁵
• Level 3 (Detailed Capabilities/Activities): This is where we get into specific, actionable capabilities such as Invoice Processing or Strategic Forecasting. Proficiency definitions usually come in at this level.¹⁵
• Levels 4 and 5: I only use these when a framework needs to get highly technical or when maturity models are required. They might detail the practices in something like the Capability Maturity Model Integrated (CMMI).¹⁹

Structural Trade-offs
The choice between depth and simplicity has real consequences. A 2-level framework is simple and strategically clear, but it often doesn’t provide enough detail for learning and development or for tailoring jobs.⁴ On the other hand, a 5-level model is precise and predictable, which matters in high-risk or highly technical contexts, but it can become complex, bureaucratic, and hard to maintain.⁷

I’ve seen the NSW Public Sector take the 5-level route to deal with the diversity of roles in government; using a progression from Foundational through to Highly Advanced.¹⁷

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2.2 Capability Grouping and Classification Taxonomy

When I build a capability framework, the way I classify capabilities matters. The structure has to make sense so that it can actually be used in talent management; whether that’s job design, mobility, or workforce planning.

Grouping by Function and Scope

• Core / Focus Capabilities: These capture the essential functions and values of the organisation; basically, the capabilities that deliver on the market promise.⁴ They normally apply across all employees.
• Transversal / Core / Soft Skills: These are the universal abilities that cut across every role and context; things like communication, problem-solving, and resilience.²¹ In broad-sector frameworks (like the public sector), these are often grouped into categories such as Personal Attributes, Relationships, and Results to create a consistent language across the workforce.¹⁷
• Technical / Functional Capabilities (Hard Skills): These are specific to a domain or job family. It might be advanced expertise in a discipline or the ability to use particular systems or tools.¹⁸
• Leadership Capabilities: These are the competencies that matter most in senior roles; like strategic thinking, leading reform, or building organisational capacity.¹⁸
• Business Enablers: These are the essential but non-specialist functions that every organisation needs, like Finance, Technology, and Project Management.¹⁷

Classification by Value Delivery: From an Enterprise Architecture perspective, capabilities can also be classified by how they contribute to strategic value: Core (defining market proposition), Supporting (essential for operations, like HR), and Differentiating (providing competitive advantage).²⁰

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2.3 Addressing the Depth vs. Breadth Polarity (The Profile Shape)

Capability design must address the strategic trade-off between deep specialisation and broad combinatory skills. The traditional I-shape profile emphasises deep expertise in a single functional area. In contrast, the modern T-Shape profile combines deep specific expertise (the vertical line) with broad, cross-functional capabilities (the horizontal line).²⁴ T-shaped profiles are increasingly necessary for leaders managing complexity and interdependencies.²⁵ An even more complex evolution, the T² capability model, adds another horizontal layer to address the compounding demands of complexity management and interdisciplinary application.²⁴

The framework should explicitly manage the tension between depth and breadth, ensuring that career paths encourage the development of T-shaped profiles by requiring competency in Business Enablers or Transversal capabilities as prerequisites for higher-level roles, thereby balancing specialist depth with generalist leadership skills.²⁶

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2.4 Structural Stability and Universality Implications

If a capability framework is going to stand the test of time, its top layer has to be built around stable business functions, not today’s org chart.⁴ If I define the top-level capability as what the organisation does — say, “Manage Customer Relationships” — rather than who does it — like “Marketing Department Tasks” — the framework holds steady even when the structure of the business shifts.³ That stability is key for breaking down silos, because real capabilities are always cross-functional and cut across multiple departments.⁵

For bigger, more complex organisations — whether that’s the public sector or a global corporation — I’ve found a Universal/Specific Grouping Model works best. This means having a set of universal, transversal capabilities (like Personal Attributes or Relationships) that apply to everyone, creating a shared language for performance. Then, you only tailor the technical and functional capabilities where they’re truly needed.¹⁷ It’s this balance that creates consistency across a diverse workforce while still allowing room for the unique demands of specialist roles.²⁷

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Part 3: Micro-Design: Defining the Capability Unit (The Content Philosophy)

The way a capability is written — what I call the content philosophy — is what determines how useful it is in practice. It shapes how measurable it is, how clearly it can be applied in learning and development, and whether people can actually work with it. At this stage, there are two main choices: do you define a capability by the inputs an individual brings (KSAOs), or by the outputs the organisation achieves (Outcomes)?

3.1 Definition by Component (The Input Philosophy – KSAOs)

The input philosophy takes the traditional route. It breaks a capability down into its component parts: Knowledge, Skills, and Abilities.⁹ That means getting specific through job analysis; spelling out exactly:

1. What knowledge is required (knowledge of what),
2. What skill is expected (skill at what),
3. What ability is needed (ability to do what).

You also need to set the context of use and the level of accuracy expected.¹⁰ This approach is thorough and works well when you need detailed specifications; for example, in recruitment, identifying training needs, or making sure tasks line up tightly to job requirements.¹⁰

3.2 Definition by Outcome (The Output Philosophy – Measurable Results)

The output philosophy flips the focus. Instead of listing inputs, it defines a capability by the results it should deliver when knowledge, skills, and experience come together.⁸ For instance, “Delivery Management” might be defined not by what someone knows, but by the outcome of “a consistent, smooth pace of delivery.”⁸

This approach is more strategic, because it ties capabilities directly to measurable business outcomes; like boosting revenue, reducing risk, or increasing customer satisfaction.¹³ ¹⁴ It’s especially powerful in transformation work, because it forces alignment between internal capability building and strategic objectives.

3.3 The Necessity of Hybrid Semantics

In practice, I’ve found the best approach is to combine both. Outcomes show the why — the strategic end goal — but people also need the how spelled out if they’re going to grow.

That’s why I use Hybrid Semantics: the capability title and high-level description are written as outcomes (strategic alignment), while the Proficiency Level Descriptors (PLDs) are written as inputs (specific behaviours, KSAOs).¹⁷ This keeps the framework strategic at the top level but grounded in real, observable actions that employees can develop against. It links the big picture to the day-to-day.

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Part 4: The Spectrum of Proficiency Models (Measuring Mastery)

When I design a capability framework, I never treat competence as a yes/no tick-box. Capability isn’t binary. It’s a spectrum; people grow in mastery, moving from simple execution to independent, complex judgement.⁷ That’s where proficiency models come in: they set the scale of mastery.

4.1 Developmental and Experiential Proficiency Models

These models map how people grow over time, showing how experience builds judgement and confidence.

The Dreyfus and Benner Models (Novice to Expert):
This is a classic five-stage model, widely used in professions like nursing where judgement and situational awareness matter.³⁰

• Novice: No experience. Relies on strict rules, constant cues, and has little independent judgement.³¹
• Advanced Beginner: Performance is acceptable, but still needs occasional guidance. Knowledge is starting to develop.³¹
• Competent: Usually 2–3 years of experience. Works efficiently, using conscious, structured planning.³¹
• Proficient (Adept): Starts to see situations holistically, connects actions to long-term goals, and adapts when things don’t go as expected.³¹ ¹⁷
• Expert: Full mastery. Relies on deep understanding, often teaching or mentoring others.³¹

The Linear Numerical Scale:
Many organisations prefer a simpler model; often a 3- or 5-point scale.³² It ranges from beginner (1) to expert (5), making it easy to quantify gaps and track progress. Common descriptors are: Fundamental Awareness, Novice, Intermediate, Advanced, and Expert.³²

4.2 Cognitive and Process-Based Proficiency Models

Bloom’s Revised Taxonomy (Cognitive Complexity):
Bloom’s model focuses on the level of thinking required.³³ It runs through six levels: Remembering, Understanding, Applying, Analysing, Evaluating, and Creating.³⁰ It’s especially useful for L&D design because it forces clarity; training objectives have to match the level of intellectual rigour needed.³⁴ Bloom’s wouldn’t be right for your capability or competency framework.

The Capability Maturity Model (CMMI):
Unlike the others, CMMI is about process maturity, not individual skill.³⁶ It asks: how consistently and predictably can the organisation execute? The five stages are Initial, Managed, Defined, Quantitatively Managed, and Optimising.¹⁹ This is often used in enterprise or risk-heavy environments.

4.3 The Philosophical Model: Know / Be / Do

I find this model powerful for leadership work, because it ties values to action.³⁸

• BE (Character): The foundation; values, ethics, and integrity. The courage to act, regardless of consequence.³⁸
• KNOW (Competence): The essential knowledge and skills.³⁸
• DO (Action): Applying character and competence in practice, driving purposeful action and direction.³⁸

Table 2 compares the key proficiency models based on their developmental focus and application.

Table 2: Comparative Proficiency Models and Developmental Axis

4.4 Designing Proficiency Level Descriptors (PLDs)

For me, Proficiency Level Descriptors (PLDs) — sometimes called behavioural indicators — are where a framework becomes real. They connect the abstract proficiency levels to observable performance.¹⁸

In other words, they spell out the actions or behaviours that show what effective performance looks like at each stage. Competencies only add value if they’re expressed this clearly, in measurable and observable terms.¹¹

A good set of PLDs must show a real step-up between levels.⁴⁰ The way I design that progression is by adjusting three variables:

• Complexity / Sophistication: As you move up, tasks should become more nuanced and demanding; for example, handling routine tasks at a Foundational level versus leading organisation-wide reform at a Highly Advanced level.¹⁷
• Scope / Impact: The scale of influence broadens, from individual contribution to team, departmental, or even whole-of-organisation outcomes.¹⁷
• Independence / Frequency: At the lower levels, people need close supervision and cues. As they progress, they operate independently and, eventually, teach or mentor others.³¹

The proficiency model you choose sets the tone for how PLDs are written. With Dreyfus, the language leans on experience, intuition, and holistic judgement.³¹ With Bloom’s, it has to use cognitive action verbs — analyse, evaluate, create — to keep consistency with the taxonomy.³³ Getting this alignment right is what makes the measurement scheme coherent and credible.⁴¹

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Part 5: Strategic Measurement and Implementation

5.1 The Measurement Framework: Key Capability Indicators (KCIs)

Thanks for sticking with me this far! The last piece of capability framework design is measurement and for me, this is where you prove whether the framework is actually doing its job. Measurement has to link development directly back to organisational strategy.

Traditionally, we’ve relied on Key Performance Indicators (KPIs). These are about long-term results — revenue, process outputs, customer satisfaction — and they look backwards. They tell us whether goals were met.⁴² ⁴³ Useful, yes, but they only show us what has already happened.

What I push for now is the use of Key Capability Indicators (KCIs) alongside KPIs. KCIs are predictive.⁴⁴ They measure whether the organisation has the potential and readiness to achieve future goals. In other words, they tell us not just how we’ve performed, but whether we’re equipped for what’s next.

Examples of KCIs include:

• the strength and quality of the talent pipeline,
• assessment scores against required proficiency levels,
• or the pace of capability development in critical areas.⁴⁵

In practice, KCIs give leaders a forward-looking view of capability health, which is essential if we want strategy and workforce development to move in sync.

Table 3: KPI vs. KCI: Measuring Performance vs. Potential

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5.2 Implementation Strategy and Integration

A capability framework only works if it becomes the shared language of the workforce.¹⁷ It has to underpin practices consistently across the entire talent lifecycle. The key integration points I focus on are:

• Job Design: making sure capability requirements are aligned with role purpose and accountabilities.¹⁷
• Recruitment and Mobility: assessing candidates against capability levels, and enabling internal moves using a common definition.¹⁷
• Performance and Development: giving managers and staff a clear view of expectations, plus targeted areas for growth.¹⁷
• L&D Alignment: using KCIs to connect learning activities directly to the capability gaps that matter most.¹⁷

In practice, I usually represent the framework as a matrix or table, mapping capabilities against job roles, job levels, or organisational functions. This makes it easy to assess employees, identify development needs, and design targeted training programs.⁴⁶

5.3 Predictive Alignment and Complexity Governance

The real test of a capability framework is whether it enables predictive workforce planning.³ If the top levels of the framework (Level 1 and 2) are built around stable, cross-functional capabilities that reflect strategic outcomes, then the organisation can model future needs and forecast gaps — not just document where it’s already falling short.¹³ That stability at the macro level is what makes true foresight possible.

There’s also a balance to strike between complexity and adoption. A five-level framework with detailed descriptors provides precision — perfect for specialists or enterprise architects — but risks being too heavy for general use.¹⁶ By contrast, a simpler three- or four-level framework with clear language is far easier for employees and managers to adopt.⁷

That’s why governance has to be thought through before the design starts. Every trade-off should be deliberate: is precision for technical excellence the priority, or is breadth and simplicity for organisation-wide adoption more important?²⁵ Making that choice upfront is what ensures the framework sticks.

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Conclusion: Prescriptive Architecture for Optimal Framework Design

When I bring all of this together, the most effective capability frameworks are always built as hybrids. A single-lens approach won’t hold up in practice.

First, clarity comes from hybrid definition. Capabilities need to be written in outcome terms, tied directly to measurable business results so they stay aligned with organisational strategy.¹³ But to make them workable at the individual level, the progression must be defined through observable behavioural inputs; the KSAOs that people can actually demonstrate and develop.⁸

Second, structural stability comes from a hybrid hierarchy. In my view, the sweet spot is a three- to four-level structure. At the top, Levels 1 and 2 must be anchored in stable, cross-functional business capabilities — what the business does, not who does it — so that the framework lasts through restructures and change.⁵ Alongside this, the framework has to recognise both the universal, transversal capabilities that apply to everyone, such as personal attributes, and the more specific technical or functional capabilities that matter in defined contexts.¹⁷

Third, proficiency modelling has to blend perspectives. The Dreyfus/Benner Novice-to-Expert scale captures the experiential journey that underpins career growth and leadership roles.³¹ What matters is consistency: the Proficiency Level Descriptors need to use the right language for the model they sit under, whether that’s action verbs or experience-based descriptors in Dreyfus.⁴¹

Finally, measurement has to evolve. A framework without measurement is a framework that fades into irrelevance. That’s why I am striving to integrate Key Capability Indicators (KCIs) alongside traditional KPIs. KCIs shift the focus from lagging performance to predictive insight.⁴⁴ They give us a forward view; not just whether the organisation hit its goals, but whether it is ready for what comes next.

This hybrid approach is what makes a framework not only comprehensive, but durable, strategic, and usable.

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