Why Should You Care About Core Competencies?
By admin fallon
On June 30th, 2014
The idea of core competencies has been around for more than 20 years – and now this concept is more relevant than ever. Essentially, your core competency defines the skills and expertise that differentiate your company from competitors and provide a strategic advantage. In today’s technology-driven market, your core must be as strong as ever, but it must also be flexible.
Know your strength
Like your body’s core, your primary competencies hold everything together, keeping the overall body of your organization steady and moving in the right direction.
The effect of core competencies carries over into all business areas:
- Customer service
- Social media strategy
- Market perception
- Vendor relationships
Companies that don’t clearly understand or cannot explain their core competencies cannot fully engage in these areas. For example, without a distinct core to strive for, you might provide services that don’t match customers’ expectations.
Strive for flexibility
But just knowing your core isn’t enough in today’s market. Digitalization – in which technology is involved with every aspect of a company – is fast becoming an expectation of both colleagues and customers. The organization that understands its core competency enough to stretch into this new way of business can adjust or redefine that core to get the most out of digitalization.
The Harvard Business Review suggests that today’s companies define core competencies that encourage customers to collaborate and add value. Your customers’ needs and wants should dictate the competency, rather than the competency informing customers what they should want. Achieving this goal is easier for digitalized companies, in which customer feedback is intrinsic.
Are your business’s core competencies clearly defined, yet flexible enough to adapt to change? Use this checklist as a guide:
- Does your company have a mission statement? (And is it still relevant?)
- Do your core competencies match what your company actually does?
- Can your core competencies accommodate new market opportunities?
- Are you willing to disrupt the company’s core competencies to ensure the company’s future?
- Are you paying attention to customer feedback?
Companies that can answer “yes” to these questions are well placed for a successful future. For example, Nike decided that its core competency wasn’t just making fitness shoes, but enabling fitness, so it now makes iPhone apps and web services that support its customers’ fitness activities – products that today’s plugged-in customers want. Apple – perhaps the company with the most flexible core of all – went from personal computing to music players to phones to search (Siri). Is your core flexible enough to make similar adjustments?
If your company is struggling to define its core competencies or to adapt them to changing market needs, Fallon Consultants can help. We offer business development strategy consulting that can help your company understand and leverage its core competencies and implement strategies that result in sustainable profitability and growth.