What capabilities do you need for the trading organisation of tomorrow?

What is a capability model?

When designing the trading organisation of tomorrow, you need to know what capabilities are required and how those capabilities might steer the transformation direction. Capability models help you answer both those questions.

Capability models are structured representations of everything a business needs to be able to do to operate effectively  across the front-to-back trade lifecycle.

Well‑designed capability models share a number of defining characteristics. They are:

• Rooted in capability, not process, describing what must be done rather than how it is done
• Organised by business team or functional ownership, structured across multiple levels
• Designed to be easy to read and intuitively understood
• Able to support the overlay of additional information – such as systems, processes, trade types, gaps, or capability maturity  – to link to other key pillars of how the business works

Capability models are so powerful because they combine structural clarity with flexibility. They provide a stable backbone for understanding the business – while remaining adaptable enough to support analysis, discussion, and design.

Why capability models are the foundation for organised transformation

Successful transformation depends on having a centralised set of overarching views that provide a coherent and accessible picture of how the business operates, what it trades, and how it’s organised. 

This isn’t straightforward for commodity trading organisations. Yes, across the sector there’s significant consistency in the capabilities required to support a given commodity class. However, what varies – often far more than expected – is how those capabilities are organised. Two businesses can trade the same products, operate profitably, and remain well-controlled while organising the same underlying capabilities in very different ways. For example, team structures differ, responsibilities are distributed differently, capabilities may be grouped in one organisation and split across teams in another, and hand‑offs occur in different places. 

Capability models clearly show what the business does and how responsibilities are distributed in its specific context. They therefore:

• Cut through complex systems of people, assets, trades, processes, technologies, and data more effectively than any other document
• Provide a neutral and objective basis for understanding organisational design, without immediately defaulting to systems or processes
• Align stakeholders on how the business is organised – while creating the trust and insight required to move from current‑state understanding to future‑state design

How to use capability models to drive a transformation programme

To succeed with large‑scale transformation you need clarity and alignment on how the business works today and how it needs to work tomorrow.

In practice, this means working with two deliberately related capability models:

• Current‑state capability model, which establishes an agreed and factual view of how the business is organised today
• Future-state (or North Star) capability model, which defines how the business intends to be organised tomorrow

Using the current‑state capability model

In diagnostic and discovery work, the current‑state capability model provides a neutral, non‑threatening way to describe how the business is organised. Rather than starting with systems or processes – which often leads to defensive or technology‑led conversations – the model allows stakeholders to agree on structure first. 

This involves answering questions like:

• What teams exist?
• What are they responsible for?
• Where do responsibilities begin and end?

Once agreed, the current‑state capability model becomes a platform for layering insight. It can be used to explore:

• Which systems support which capabilities
• Where processes cut across organisational boundaries
• Where gaps or duplications exist
• How mature different parts of the business are relative to peers or best practice

Most importantly, it provides a light-bulb moment where stakeholders can say with confidence: “Yes, you understand how we’re organised.” This moment of recognition is foundational; without it, alignment on any future‑state vision is fragile at best.

Designing the future‑state capability model

Once you’re aligned on the current state, transformation moves from understanding to design. A future‑state capability model is then developed using the same structural frame but with a different intent: to define how the business should be organised going forward.
The future‑state model makes explicit:

• Where responsibilities will change
• Which capabilities will be consolidated, separated, or elevated
• The relative scale of change across teams

Its real power lies not just in defining the future‑state view, but in comparing the current and future states. This makes the nature and scale of change visible, discussable, and actionable.

It then plays a critical role in transformation programme delivery by:

• Providing a clear contract between the business and delivery teams
• Creating an organisational spine for the programme
• Offering a consistent structure against which requirements, functional design, and technical design can be developed

Capability models: A stable backbone for understanding the business and driving transformation

Accelerate transformation with structure and best practices

When you anchor transformation in these two capability models, you have a stable reference point for all change activity. They’re more than diagrams, they’re the foundation of organised transformation – enabling confidence in current‑state understanding, alignment on future‑state vision, and coherent delivery of complex change.

Baringa has developed a standard set of capabilities required to support physical and derivatives commodity trading major asset class, including power, gas, oil and liquids, LNG, metals, agriculture, shipping, and trade finance. These standard capability sets recognise the commonalities among assets while accounting for variations specific to each class. We then tailor these standard sets to reflect your specific trading activities, commodity mix, and scope. Combined with our deep industry expertise, this approach allows us to develop robust, client‑specific current‑state and future‑state capability models quickly, while remaining grounded in proven practice.

Contact us to learn more.