Aligning Capability Building With Business Strategy

AI is reshaping the foundation of organizational performance. As intelligent systems are embedded across business functions, the conditions for how work is defined, performed, and improved are changing rapidly. Decision velocity is increasing; execution windows are narrowing. Expectations for adaptability are rising across every level of the enterprise. Investment in AI systems is growing fast, yet what’s often missing is the corresponding focus on execution readiness, on building the capability required to translate AI strategy into sustained, real-world impact. Without that focus, the promise of transformation remains theoretical.

If your workforce can’t execute the strategy, you don’t have a strategy.

Learning and development (L&D) sits at the intersection of business ambition and workforce capability. The opportunity is for L&D to become the function that operationalizes strategic change by building targeted capabilities, driving alignment across systems, and enabling performance in motion. If your workforce can’t execute the strategy, you don’t have a strategy.

The CLO is increasingly responsible not just for developing workforce capability, but for executing business value: turning strategic priorities into defined capability mandates, designing infrastructure to support coordinated action, and enabling responsiveness in the face of continuous change. This article details how these shifts redefine L&D's scope and the requisite leadership mindset, and provides practical steps for executive teams to transform learning into a driver of enterprise value creation. The conditions for competitive advantage are being reset. Learning is now a performance system and the CLO is accountable for executing it.

The CLO as Execution Partner, Not Program Owner

L&D often remains structurally disconnected from the business, buried in HR, overly focused on transactional activity, and rarely expected to demonstrate enterprise value. This separation not only limits learning’s impact but weakens the organization’s ability to execute. In 1994, GE appointed Steve Kerr as the company’s first chief learning officer, reporting directly to then-CEO Jack Welch. The move sent a clear signal: workforce capability was no longer a downstream concern. It was now a leadership priority. Kerr didn’t develop a separate learning strategy; instead, he viewed learning as the primary mechanism for actually executing the business strategy. Learning was embedded within the business itself, shaping and supporting execution from within, not operating as a separate layer.

Fast forward to today: while the CLO role exists in name across many enterprises, it often lacks structural power and strategic connection. Most CLOs sit several levels removed from the executive level. Many lead teams focused on delivering learning programs and managing logistics, rather than on driving strategic capability outcomes. The result is often a function that runs efficiently yet remains disconnected from value creation. This gap is not about individual performance; it’s about design. When learning is structured as a service function, it’s rarely positioned to influence how the business defines and deploys talent.

As AI is forcing companies to rethink how work is done, L&D must also be rethought. The CLO must be involved in decisions about growth, change and transformation, and be empowered to build the systems that deliver on those decisions. Workforce capability has become central to strategic delivery, and no longer treated as an outcome, but as an essential input. The CLO is uniquely positioned as the executive explicitly accountable for this critical dependency between strategy and workforce capability. It is time the role is returned to a modernized version of its original purpose as envisioned by Welch and Kerr.

From Strategy to Capability Mandates

For L&D to play a meaningful role in executing business strategy, it must go far beyond functional training delivery. The CLO’s expanded remit is to define and orchestrate the critical capabilities the business needs and ensure the workforce can perform to that standard to deliver strategic outcomes. This begins with capability mandates. Where capability mandates define what execution demands, Capability Academies, which we introduced in Action 2, serve as the primary delivery engines for those mandates. Mandates translate business strategy into target capability outcomes; academies operationalize those outcomes through structured development environments. Capability mandates are structured, forward-looking definitions of the specific skills, behaviors, knowledge, and systems required to deliver on a strategic priority. Working in concert, these mandates and the Capability Academies that operationalize them ensure that strategy is not only defined but also effectively executed through the workforce. They clarify what execution requires and anchor L&D’s efforts to measurable business goals.

When the business commits to a new product line or a shift to more digital services, including automation and AI, the CLO should engage directly with business leadership to define the corresponding capability needs: What are the decision-making processes? What roles will change? Which technical proficiencies and behavioral shifts are required? What measurable performance shifts are required within the next 90 or 180 days to signal success?

The CLO’s job is to make the business executable—by identifying what future performance requires and building the systems to support it.

This translation from strategy to capability is not just a front-end planning exercise. Instead, L&D must establish a dynamic, ongoing alignment with the business strategy. This allows capability development to evolve in parallel with go-to-market shifts, organizational reconfigurations, or AI tool integration. It also calls for a more adaptive model of capability delivery. Many learning organizations are still built for large-scale, content-heavy rollouts that respond reactively to business needs. However, effective execution now demands speed, responsiveness, and the agility to build emergent capabilities as the organization navigates change.

The CLO’s job is to make the business executable by identifying what future performance requires and building the systems to support it. To do this well, CLOs integrate capability mapping into enterprise planning cycles. They also establish accountability for workforce readiness across functional leaders, and not just inside L&D. The learning strategy must be the business strategy and move at the same pace.

Integration Models as Execution Infrastructure

As strategic priorities become more complex and AI adoption accelerates, capability building can no longer operate in silos. One of the most persistent execution risks now comes from fragmentation: a misalignment between how teams adopt technology, define readiness, and/or measure capability. In many organizations, AI tools are being rolled out in parallel across departments without shared language, governance, or training standards, often resulting in slowed execution, uneven adoption, and rising cognitive load on employees. This leads to:

• Vertical misalignment. Disconnect between executive vision and frontline implementation.

• Horizontal misalignment. Each function interpreting AI strategy differently.

• Technical inconsistency. Tool-specific training with no coherent competency framework.

Leading organizations build enterprise-wide integration infrastructure to connect learning and capability building. These are not isolated solutions; they are part of how strategy moves through people, processes, and platforms. We first introduced these models as solutions to fragmented learning systems. Here, they take on a second, equally critical role: enabling enterprise-wide execution. When integrated with capability mandates and business priorities, they serve as connective infrastructure: coordinating how strategy moves through people, tools, and workflows in real time.

Three models have proven especially effective:

• Unified knowledge architecture. A single source of truth for AI-related competencies, use cases, and terminology. This ensures not just learning coherence, but consistent execution logic across functions, which enables faster decision-making and coordinated action as AI tools proliferate.

• Federated governance. A structure that defines decision rights and operating principles for capability building. It balances consistency and autonomy, not just in training design, but in how execution practices are aligned with strategic goals across business units. This balance supports both consistency and autonomy.

• Cross-functional learning pathways. Learning experiences that reflect how work actually happens, across silos, with shared dependencies. These pathways support not just skills acquisition, but shared execution readiness in contexts where coordinated performance matters most.

Each of these models enables the organization to reduce friction and create the conditions for faster, more reliable execution. Without this infrastructure, capability building remains fragmented and, although well-intentioned, is often out of sync with enterprise priorities. The CLO’s role is to ensure these systems are designed, implemented, and sustained. When this execution-focused capability infrastructure is aligned with the overall business architecture, the organization can move with speed and coherence, and execution becomes coordinated, rather than dependent on heroics or workaround.

Enabling Adaptive Execution

Too often, organizations treat capability building as a loose set of disconnected activities: training, experimentation, and knowledge sharing. But in adaptive enterprises, these elements are intentionally linked, creating a flywheel of performance where learning drives execution and execution feeds learning.

AI is reshaping work patterns, but its greatest impact may be in how it changes the pace and character of adaptation itself. Organizations now operate in a state of constant flux, where steady-state models of execution no longer apply. Performance expectations evolve continuously. What teams need today may be different from what they needed last quarter, and success increasingly depends on how quickly and effectively people can respond. In this context, CLOs are tasked with enabling three enterprise-wide capacities:

• Performance readiness. Equipping teams to deliver consistent results in real-world conditions, using the current mix of systems, tools, and workflows

• Change resilience. Supporting individuals and groups as they absorb disruption, recover from friction, and adapt to the unexpected

• Business agility. Creating the operating flexibility that allows the organization to reorient priorities and reconfigure workflows in step with evolving conditions

Each of these is supported by infrastructure, not just mindset. Systems, workflows, and leadership expectations must reinforce responsiveness, not only stability or compliance. Metrics must reflect learning velocity and strategic alignment, not just task completion. Psychological safety underpins this system. If employees hesitate to explore or experiment, capability gains stall. If performance support lives outside the flow of work, its impact diminishes. The CLO plays a pivotal role in designing for real-time enablement, embedding prompts, feedback loops, and support resources inside everyday work.

As AI becomes foundational across the business, L&D transitions from a delivery engine to a performance operating system.

This evolution also affects how success is defined. Stability may be a milestone, but responsiveness is the capability. Growth, iteration, and speed-to-adoption are now measurable outcomes. L&D must orient toward these markers of performance. As AI becomes foundational across the business, L&D transitions from a delivery engine to a performance operating system. Not an ancillary function, but a core enabler of strategy in motion.

Executive Actions to Drive Strategic Alignment

To transform L&D into an execution engine, CLOs and their executive peers need to act intentionally. These steps help realign learning infrastructure with business strategy and accelerate enterprise readiness:

1. Elevate the CLO role in strategic planning. Bring L&D into the earliest phases of business planning. The CLO should have visibility into growth initiatives, technology investments, and transformation priorities, and be positioned to define capability implications alongside them.

2. Build capability mandates into operating rhythms. Make capability definition part of how strategic initiatives are scoped, resourced, and reviewed. Ensure capability mandates drive the design of learning programs, and that Capability Academies are structured to deliver those mandates consistently and at scale. Connect capability planning to business outcomes. Align L&D budgets to enterprise priorities, not general development goals. Ask operational questions: How much is spent on training? How is L&D performance communicated to the CEO and board? Can the CLO demonstrate how workforce readiness and increased performance directly support the achievement of specific strategic objectives?

3. Operationalize integration infrastructure. Use the three integration models (Unified Knowledge Architecture, Federated Governance, and Cross-Functional Pathways) to reduce friction and coordinate both learning and execution activities. Make these systems visible and jointly accountable across business and HR. Treat them as core execution infrastructure, not as back-office L&D mechanics.

4. Design for performance in motion. Support real-time learning and enablement through tools that integrate into the flow of work. Build adaptive systems that respond to shifting tools, roles, and conditions. Measure agility, readiness, and speed-to-proficiency, not just completion or attendance.

5. Rescope the L&D operating model. The CLO role must modernize. This means radically rethinking how learning is structured, funded, and evaluated. Conduct a full review of L&D’s organizational design: Where does it sit? Who does it report to? What business priorities drive it? How will it scale as demands increase?

As strategies evolve, it is the organization’s ability to adapt, align, and act that defines success. L&D must now be designed to lead that adaptation from within.

Our next article in this series will explore how to enable that performance in motion. Through real-time, AI-augmented support systems that help employees execute inside dynamic, evolving workflows.