What are your Business’s Core Competencies?
Does your business have just one or are there many organizational attributes to the core competencies? If you answered that there are many, how would you describe them succinctly? Knowing the answers to these questions can greatly improve your execution strategy. Core competencies are one or a combination of a few unique or rare abilities; however, a description of core competencies is not simply a laundry list of various organizational attributes. It seems like a simple task, but naming your core competencies can be very difficult. This is because we, as business leaders or managers, get caught up in the tactical day-to-day tasks that we accomplish and we often mistake those tasks as our core competencies.
Years ago, when I walked to the flight line to take my first solo flight in an F-15 fighter pilot, I was struck by an all-encompassing passion that has driven me and everyone on my team to become a more successful team. That passion was to define and teach the basic principles that helped me, a farm-boy from Kentucky, become one of a very few elite U.S. Air Force fighter pilots.
Defining Your Core Competencies: Examining Your Complex Organizational Attributes
Often, your true core competencies are elusive and hard to pin down, which makes defining your core competencies difficult, even when examining your organizational attributes. However, it is my belief that an expression of your true core competencies can be articulated both simply and elegantly.
Expressing core competencies is about getting to the root cause of why you do what you do and what makes you successful. A core competency is not a mission or vision statement; nor is it a statement of competitive advantage. It is not a statement of the level of quality of the products you manufacture or of the services you provide. A core competency is something more fundamental. It is both a root cause of success and an expression of the organization’s unique character or reason for being. A simple and elegantly expressed core competency is a summary of what is most likely a set of complex organizational attributes.
Proof of the complexity of a core competency can be found in the way scholars in the field of business management and leadership have defined the term. In their 1990 Harvard Business Review article entitled “The Core Competence of the Corporation,” C.K. Prahalad and Gary Hamel assert that an organization’s core competencies can be attributed to success in a wide variety of markets, increase the perceived value to the customer, and prevent imitation by competitors. The authors conclude that these benefits are due to a “complex harmonization” of organizational attributes, creating core competencies.
How Passion Contributes to Core Competencies
Jim Collins famously characterized core competencies as “hedgehog” traits in his book “Good to Great.” Instead of describing core competencies in terms of benefits, Collins describes them in terms of three dimensions – what you can be best in the world at; what drives your economic engine; and what you are deeply passionate about. Although each is important, it is often the last “dimension” that is left out of an organization’s description of its organizational attributes. What you are passionate about is a core competency — it’s the fire in your belly that drives you to do every day what must be done. Without that passion, descriptions of core competencies are simply statements of what you do well and do not include what you love. Describing the passion that drives your organization is essential to cutting through the complexity and getting to the simple and elegant truth of the organization’s identity.
The science of physics provides an excellent example of simplicity and elegance. Physicists are often driven to refine their theories until they achieve an “elegant” formula. Physics is an elegant science because it seeks to find the fundamental laws of the universe. For this reason, physicists call these laws “elegant” because they are, in essence, both simple and effective.
For example, consider the famous formula E=mc2. This formula simply states that energy is equal to mass times the speed of light squared. This simple formulation was one of the most significant scientific discoveries of the past century – and it is expressed in just five symbols. Pick up any high school physics textbook and you’ll find a host of simple equations that explain almost any phenomenon we encounter in the course of our everyday lives. That simple but powerful formulation is what physicists mean by “elegant.”
It is essential to include the passion – your organization’s “reason for being” – found within your organizational attributes, in a statement or written formulation of your organization’s core competencies. Passion is a core competency that is often overlooked. Like other core competencies, passion cannot be duplicated easily. It is important, then, to expand the scope of the core competency to become more than just a statement of fundamental skill. Capture the passion and include the guiding principles – what the organization believes. Altogether, core competencies, core beliefs and the passion to do what it is that you do, come together to create the simplicity and elegance of what I call the “organizational imperative.”
Many companies do a good job of capturing the essence of their organizational imperatives by developing eloquent and inspirational mission, vision and goals statements. However, this is an awkward approach, as it usually fails the test for simplicity and elegance, and it may lack a true statement of organizational imperatives altogether.
If you correctly define your core competencies, you will realize that everything your organization accomplishes, along with its organizational attributes, should flow from and connect directly to that description. Furthermore, that definition should become a screen for every decision, however large or small, throughout the entire organization.
My company’s organizational imperative is simple and elegant. It is as follows:
“Accelerate individual, team, and organizational performance”
In just 6 words, we have described our passion, our core competencies, our organizational attributes and our beliefs.
Like an elegant formula in physics, a complete and concise organizational imperative describes your organization’s behavior. It is the standard to which all actions are executed and decisions are measured and made.
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