This document discusses conducting a capabilities audit to assess an organization's key capabilities. It defines capability as an organization's ability to perform better than competitors using distinctive resources. The document then provides a five-step process for conducting a capabilities audit, which includes determining the scope of the audit, tailoring generic capabilities to the organization, gathering data from multiple groups, analyzing the data to identify critical capabilities, and creating an action plan. It also lists 11 generic organizational capabilities and provides examples of how to evaluate each one.