How Well Do You Understand Your Organization’s Core Competencies?

Posted by on September 15, 2011

What if you were to ask your key management team a simple question: “What do we do?” You might be surprised at the answers you would get: answers that lack consistency, focus, and clarity, with your key leaders offering slightly different responses to this seemingly simple and straight forward question. While it may sound somewhat juvenile to suggest that organizations expend effort to solicit feedback on what they do, there are some very compelling reasons to do so.  And, in the end, you may find that this simplistic exercise is the root of many organizational troubles.

Knowing What Your Core Competencies Really Are Puts Everyone On The Same Page

Core competencies are the underpinnings of an organization’s skills and the cornerstone of successful strategic execution. They represent the fundamental knowledge, abilities, and expertise of an organization and are what make individuals and organizations unique. Your ability to understand and measure organizational core competencies is a critical factor in reaching your desired strategic goals.

Definition: Core Competency

A bundle of skills that enables an organization to provide a particular benefit. A core competence is not product or service specific.

A business's ability to understand, manage and measure organizational core competencies is a critical factor in reaching strategic goals. Strategic planning that leverages this valuable information asset is more apt to deliver the intended outcomes for the business.

Strategic planning begins with getting organizational leaders on the same page about the mission of the organization and the core offerings the business provides.  Examining what you do during the planning process often uncovers misperceptions on the part of company leaders in regards to their understanding of core lines of business and market focus.  And these misperceptions can lead to significant departures and inconsistencies in how day to day decisions are made.

If an organization cannot succinctly explain what it does, the marketplace is sure to be equally confused.  Core to organizational success is the ability to describe what you do in a way that is unique and compelling to current and prospective customers.  An organization’s competitive position is based on how the marketplace views the organization is relation to competitors.  Without a clear definition of what you do as a core competency, it’s nearly impossible to reach your desired position.

Align Organization Core Competencies To Employee Core Competency Planning

On the surface, core competencies may seem to be a generic list of skills - but these skills, as applied to the employee and the organization they constitute, are the foundation for what the business possesses that set it apart from its peers.
These groupings of skills factor into strategic planning and decision making and are a source for identifying competitive advantage and the building blocks for future opportunities.

Additionally, core competency analysis can be used for:

• Staff Development
• Evaluation of Leadership / Management
• New Hire Interviews
• Evaluation of Individual Competencies
• Redirection of Staff
• Development of Staff
• Competency Reading Materials
• Staff Support
• Organizational Strategic Evaluations
• Promotion Decisions
• Staff Transformation Activities
• Staff Transformation Decisions

Leveraging Core Competency Knowledge

When you know what you do, you can better answer, “What should we do?”
In strategy development, the question of “what should we do” is the upshot of knowing “what we do”.  Analysis of what we do brings out an even clearer understanding of the organization’s core competencies, which is essential to knowing what future strategies or opportunities might be explored. In a nutshell, this perspective relates to building competitiveness in your offering and exploiting peripheral markets.  Truly gauging core competencies is key to this analysis, not just from leadership, but down through the organization.

So, what do you do?

Having a consistent, clear description of what you do as an organization is a crucial first step of strategic planning.  How well can the leaders and members of your organization answer the question? 

Suggested Articles And Content Related To This Topic:

• Breaking Out of the Box
• Corporate Strategy and the Elephant In The Room
• Bridging the Gap Between Strategy and Execution
  
• Guide to Operational Planning: Strategy Implementation Essentials
• Operational Planning

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For permission to use or reprint any portions of this copyrighted article, contact Method Frameworks at articles@methodframeworks.com.

About the Author:

Joe Evans is the President and CEO of Method Frameworks.  Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.

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