What is a Core Competence?
You will find many different definitions of this concept. The concept of Core Competencies was first introduced by C. K. Prahalad and Gary Hamel in 1990, in their article The Core Competence of the Corporation. Since then, this term has become part of the general business vernacular.
In the 1990s managers will be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible – indeed, they’ll have to rethink the concept of the corporation it self. C K Prahalad and G Hamel 1990
Generally, a competence is described as the knowledge, skills, and behavioral attributes necessary for acceptable job performance. Competencies can vary between different industries and levels of seniority, though the majority is found across many industries. They are often sprinkled throughout job descriptions and person specifications.
Examples: For a manufacturer of electronic products, the key competencies could be in the design of the electronic components. For a ceramics manufacturer, they could be the routines at the heart of the production process and for a software agency the key advantage could may be in the overall simplicity and utility of the program for users or a software code written in high quality.
The Infographic of 7 Core Competencies
Wikijob identified 7 core competencies that people come across during the job search. Also organizations can use them to categorize their strengths. We created an infographic of it: ‘The Flower Of 7-Core-Competencies Infographic’ that you can download as PDF Version. It works well printed in A3.
How Do We Develop Core Competencies?
To address this question, let’s introduce the Core Competence Model.(1) This is a strategy framework that starts the strategy process by thinking about the core strengths of an organization. According to Prahalad and Hamel, Core Competences can be identified and clarified using a 3-step process.
Articulate Strategic Intent
We must first articulate our Strategic Intent, which is our vision of what we want to achieve in the long term. A Strategic Intent must have these 4 components:
Sense of direction
Sense of discovery
Sense of destiny
Identify Core Competencies
There are 3 tests for identifying a Core Competence:
Provides potential access to a wide variety of markets
Makes a significant contribution to the benefits of the product as perceived by the customer
A Core Competence should be difficult for competitors to replicate
Enhance Core Competencies
After we have identified our Core Competencies, we need to enhance them by redesigning the architecture of our organization. For example, we should invest in required technologies that support and strengthen the competency. Once we clarify our Core Competencies, it helps organizations to know how to support the Competitive Advantage. This brings more clarity and direction to appropriate resources allocation.
What are your organization’s Core Competencies?
 FlevyPro Document Library Business Framework Primers: here
Prior to Flevy, David worked as a management consultant for 8 years. Domestic and international (EMEA and APAC) project experience. Has worked with clients across industries of Media & Entertainment, Telecommunications, Consumer Products, High-Tech, and Life Sciences.
Latest posts by Dave Tang
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