Core Competency Analysis
When you work in a crowded industry with aggressive competitors, you need to build momentum on your success and innovate fast to keep up. Our Core Competency Analysis deck helps you identify your organization's most unique and strategically valuable resources. Leverage them to create sustained competitive advantages and do more of what you're good at.
Core competencies create a foundation that can be used to identify new growth areas and create products that align with organizational strengths.(Slide 5)
A core competency checklist ensures the competencies selected align with organizational values and deliver unique value proposition to customers. (Slide 7)
A table analysis helps rank your core competencies against one another to compare their importance, defensibility, and strengths.(Slide 20)
Build upon the unique resources that set your organization apart from its competition. Identify those existing or potential core competencies to invest in, improve or innovate on.
Core competency analysis can help you expand into new markets, serve new industries, or develop more innovative solutions. Investments in these strengths can give customers what they didn't even know they needed — and what competitors can't provide.
Core competencies introduce a combination of resources and skills that distinguish a business in its respective marketplace. It could be an organization's skills and knowledge base, managerial systems, or technical systems that form a series of values and norms. Core competency theory explains the success of household names like McDonald's, Walmart, Apple, and IKEA. All four brands have honed their mastery of core competencies to focus on what they do best even as they consistently reinvent themselves.(Slide 2)
Core competencies are often favorable conditions that make up the foundation of a company's competitiveness. They are different from competitive advantages, which are specific skills or knowledge that allows a company to gain a presence in multiple markets. Combine both, and you have a recipe for long-term success.(Slide 3)
Mission and vision review
To start, identify your company's core mission and vision statement. Complete a job analysis of all active roles and survey employees to understand your company. Define internal capabilities that are strategically positioned to deliver sustainable value. Perform a core competency review throughout the organization and evaluate its strengths and weaknesses. Compare with other companies with similar capabilities to ensure the development of key competencies is targeted.
Draft potential competencies and establish a roadmap for the organization to set goals for competence building. Promote all-inclusive participation in the development and validate those competencies with feedback from stakeholders like team members, investors or customers. Finally, preach the competencies so that they become common practice across the organization.(Slide 7)
A core competency analysis can be conducted across three different scenarios: either with core competencies already established, potential competencies defined, or no existing or potential competencies.
In scenario one, the action is to identify how to develop and improve each existing core competency to increase market share and strengthen its competitive position in the greater industry landscape.
In scenario two, no existing core competencies were established but potential ones are identified. In this case, identify what makes the most sense to invest in and develop further.
In scenario three, with no existing or potential core competency, more stakeholders need to be involved in the discovery process. The action to take in this scenario could be to survey customers or involve external facilitators like a partner organization or consultant.(Slide 9)
Management, technical, and organizational skills are all areas that can be invested in as a core competency. Risk management, business knowledge, and business attributes are also areas that can be developed.
For example, let's say you are an exec at a cyber-security company that has been assigned the mandate to develop new products and services to meet the current boom in cyber-security services. You decide to conduct a core competency analysis before diving into new product development.
While your company's strategic perspective, relationship development, and decision-making are key strengths and competitive advantages, they aren't unique enough to differentiate yourself from competition. Therefore, they aren't considered as core competencies.
Your technical skills in research and analytics, data interpretation, and information systems are all vital strengths. But once again, you want a core competency to be something that others can't emulate, and your technical skills are on par with the rest of your industry as a minimum barrier to entry.
That said, your organization's risk management skills may be unique. Particularly, your standards and frameworks, adaptation approaches, and process and solutions put you ahead in terms of on-the-ground execution. Your subspecialty in cloud-security solutions has also become an increasingly important part of the industry. Therefore, these are the core competencies to focus on when you develop the next slate of products. (Slide 11)
Comparison With Others
In this visualization, competencies can be compared against multiple companies in competition for market share, alongside those companies' core and end products.
In our example, you've determined risk management skills to be a core competency. In particular, the ability to mitigate internal and customer risk across standardized frameworks, adaptable and flexible processes, and a subspeciality in cloud-based security solutions.
Your core product is the cloud-based zero-trust security application infrastructure, which requires customers to switch over to your service from their existing cloud network.
The new end product, based on your core competency analysis, could be a cloud security readiness service that assesses a client's potential risk at a minimal cost. It also creates a custom plan to upgrade servers with identity and access management, plus data protection capabilities to integrate and work within customers' existing cloud server infrastructures.(Slides 12-14)
Team leaders, project managers and executives will want to track development progress. Editable sliders can be dragged with percentages adjusted to monitor and report how far along the organization is in the core competency analysis process. Each slider can be used to represent progress or compare a competency-relevant strength.(Slide 15)
Core competencies can be defined and analyzed across leadership levels as well. For instance, executives, managers, supervisors, and project leads can conduct a self-or-cross-organizational analysis to determine relevant strengths to build upon. (Slide 16)
Assessment of Competency Areas
Leaders can test potential competencies against one another. To do so, ask whether each competency provides a customer benefit, is difficult to imitate, and can be leveraged widely.
Let's say Competency 1 is your cloud security company's risk management skills, while Competency 2 is your company's technical skills, and Competency 3 is your organization's management style.
While your company's technical skills provide a benefit to customers, it is easy to imitate and can't be leveraged widely as a competitive advantage over your peers. Alternatively, your management skills are hard to imitate, but don't really provide customer benefits and can't be leveraged widely as a core competency. Your risk management skills, on the other hand, are difficult to imitate and can be leveraged widely over your competition — thus, it passes the test to be prioritized over the other two options.(Slide 18)
For a deeper analysis into each competency, an alternate visualization with an editable questionnaire can be used to rank competencies with a yes or no answer according to the key areas that are important to your business. (Slide 19)
A table analysis visualization is also available to rank each competency by its relative importance, defensibility, and comparative strength against others.(Slide 20)
For similar resources, check out our presentations on Competitive Landscape Analysis (Part 1) and Competitive Landscape Analysis (Part 2). Or learn more about Competitive Strategy: Techniques for Analyzing Industries and Competitors from Michael Porter's book.