Understanding and Using Your Core Competencies

In a previous post, we introduced a social enterprise development process that includes an 'Internal Review' as key part of the preparatory work that precedes identifying enterprise opportunities.  For this and the next few posts, we're going to take you through a range of 'enterprise assets' that can be used alone or in combination to create new enterprise opportunities. 657442

My What?

If you looked at all of your organization's programs, products, and services, what underlying capabilities would you identify?

The staff of a food bank might say, “Collecting the local food industry’s excess inventory, warehousing it efficiently and with minimal waste, educating clients about good nutrition and food management, and providing excellent order turnaround.”

If you asked your customers and other key constituents what you do really well, what would they say?  The food pantries that a food bank serves might say: “They always have a good variety of nutritious food items on hand, help us determine what we need, and have our orders ready to go when we arrive to pick them up.”

The answers to these questions, as evidenced by the above examples, would give you two different yet complementary insights into your organization's core competencies.

Definition And Guidelines

Core competencies are those underlying, programmatic capabilities that enable you to provide quality products and services to your customers.

Four guidelines for identifying core competencies include[1]:

  1. They generally support the delivery and production of a variety of services and products  (thereby giving access to a variety of markets),
  2. They always make a significant contribution to your customers’ perceptions of your services and products (i.e. they impact something that your customers care about),
  3. They are often difficult for your competition to imitate (because they are generally developed with a significant investment of time and resources), and
  4. They tend to be relatively stable over time (i.e. you’ve likely had them for a while, and will continue to have them in the future).

So What?

What do core competencies have to do with social enterprise development?  Core competencies serve two fundamental purposes:

  1. They are an excellent source of ideas for new services and products.  The core competencies that are the foundation of your current products and services can provide the basis for many new ideas, some of which might have social enterprise potential.
  2. They help you assess the likely viability of your product and service ideas.  They represent what you’re really good at, what your customers value, and what your competition would likely have trouble imitating.

Defining Your Core Competencies

To define your organization's own core competencies, do the following:

  1. List your primary products and services.
  2. Identify the key features or benefits of each product and service that your customers really value.  Ideally, you should consult with a sampling of your customers to get their direct perspectives on this.
  3. Identify any other important benefits that might not be associated with a formal program or service.
  4. Look for common themes.  These will point to your core competencies.

Contact us if you've got any questions.

[1] Derived from: “The Core Competence of the Corporation,” C.K. Prahalad and Gary Hamel.  The Harvard Business Review, May-June 1990.