How is a Core Competence identified? Too often, discussion on this topic within an organization merely leads to a ‘laundry list” of things the employees do, and while that is an obvious starting point, it doesn’t tell the whole story. In trying to identify their company’s Core Competence, nobody involved in the discussion wants their department or skill to be left out. And the temptation exists to place too much focus on what the company does for the currently-served market.
The following questions are suggested to help identify Core Competencies:
- What competence enables us to dominate in our business?
- What competence enables us to grasp future opportunities?
- What competence gives us access to multiple markets?
- What competence do customer benefits revolve around?
The history of Marriott Corporation provides insight into Core Competence. The company began many decades ago with a single roadside root beer stand. Today, the published “Vision Statement” gives a clue to its Core Competence: Marriott strives to be “The #1 hospitality company in the world.”
From its modest start providing roadside treats, Marriott has continued to provide hospitality through expansion into catering services for corporate and government cafeterias, airline meals, hotel management, corporate housing and senior living, to name a few. Providing the best in hospitality services is a Core Competence that has allowed that corporation to expand its reach to new and previously-unknown markets.
While Marriott’s founder didn’t know about the concept of Core Competence when he was operating a root beer stand, the story of that company as it unfolded over the decades indicates how he would surely not have identified the Core Competence: “Selling delicious root beer,” or “Serving the best hot dogs.”
To have identified those as Core Competencies would have limited the company to its then-market and hindered growth. We suspect the brilliant Mr. Marriott would have identified the little venture’s Core Competence as “Providing consumers with convenience and comfort in the form of good food and drink.” From there, the potential for expansion into the related—but broader–hospitality industry becomes obvious.
William Duggan, in the Art of What Works (2003), argues that Hamel and Prahalad “have it backwards. Core competencies do not lead to new products. Instead, new products make you realize your core competencies.” But can’t it actually work both ways?—Or maybe these are two sides of the same coin. Core Competencies allow for expansion and innovation into new realms of business opportunity. But it’s also true that when new opportunities come on the horizon, these can help the organization recognize an aspect of the Core that wasn’t recognized before.
Many years ago, when Marriott’s founder visited one of his hotels, he noticed that lots of meals were being sold to airline passengers. While providing food to be consumed on flights may not originally have been viewed as part of the concept of “hospitality,” this revelation at one of his properties helped Marriott expand the company’s view of its Core Competence to include contracting with airlines for catering services.
While identification of Core Competencies is usually seen as an exercise internal to an organization, we found it interesting that some entities broadcast theirs.
The 2012 “National Guard Bureau Posture Statement” describes its training course as focusing on “core competencies” of individuals, including “optimism, mental agility, self-regulation, self-awareness, character strengths, and connection.” In the same publication, the Guard lists its organizational core competencies: Overseas defense, support to global engagements, domestic response and Soldier, Airman and Family support. This section of the Posture Statement is accompanied by a full-page color photo of service members at work on the B2 aircraft under a huge boldface headline: “Core Competencies Provided by Your National Guard.”
An organization is well-served by undertaking the sometimes-difficult task of identifying its Core Competence. By defining the Core Competence and giving employees a clear understanding of it, the company becomes focused, strengthened, and gains a competitive advantage. All this is guided by the long headlights and “stretch” of the leaders’ strategic foresight, which results in an enhanced organizational ability to recognize, grasp and create new and previously-unforeseen opportunities.