Core competencies can add much value to an organization when identified and implemented correctly. Let’s debunk some myths of core competencies.
Core Competencies are Common Competencies
Some organizations have fallen into the trap of choosing core competencies merely because they are common among all roles in their organizations. For example, many service organizations choose client service since almost every role in their organization is customer facing. However, this could easily fail the 3 tests. Couldn’t everyone in your market say the same thing since you are operating in the same line of business? While finding common strengths in your organization is a good step in identifying core competencies, they should be evaluated to see if they are really a core competency.
Core Competencies are Strengths
We need to move from the original definition of core competencies. Yes, identifying what your organizational strengths are is one good strategy. However, you could select your core competencies to be more forward thinking. For example, you could select core competencies because these are the ones that are your organization’s greatest flaws and need to be developed. Think of the slogan that Avis recently scrapped after 50 years “We try harder.” which demonstrated the company’s focus at continuous improvement due to their number two position in their market. Core competencies might not yet be strengths, but could be something that you do differently (and presumably better) than everyone else in your market space.
Core Competencies are only for Businesses
For profit businesses do not have the market cornered on core competencies. The three rules can easily be applied to a not-for-profit or government context. Organizations of all sizes try and expand their market whether it is accessing new grants, signing up new members or reaching new citizens. Every organization also has some form of product. It might be a service, a campaign or a message, but every organization produces something, otherwise it would fail to survive. Likewise every organization has a competitor whether they are competing for funding sources, listeners or ‘customer share’, we are all competing against another organization whether directly or indirectly.
Core Competencies are Limitless
An organization cannot have a limitless list of competencies. We recommend a maximum of 3 to 4 core organizational competencies. Similarly, you should be able to isolate 3 to 4 core employee competencies that are fundamental to achieving the organizational competencies. (You might have core employee competencies mapped to more than one core organizational competency). The fewer the competencies, the easier it is to apply them throughout the organization. I find that organizations that have a more limited set of competencies can focus better on what is important to their clients.
Core Competencies are Static
Going back to recent business history, it is clearly evident that this statement is not true. Those organizations that have not adapted to the business climate, changing consumer desires and new competitors will be, and have been, left behind. This has been demonstrated in spades during the 2008 / 2009 world-wide economic downturn. Organizations should set up a process to review its core competencies on a regular basis (we recommend to align it with the business planning cycle) to determine if they are continuing to pass the three tests.
Core Competencies are Boilerplate
Core competencies are individual to your organization. Now is not the time to use boilerplate competencies or search the web for some good definitions.