Knowing what sets your business apart is vital if you’re going to stand out from your competitors. And as the world grows smaller, differentiation becomes increasingly important to ensure your business thrives. Understanding what your organization’s core competencies are can help to give you a competitive advantage in your market, and if you can identify the competencies within your team, you can maximize your output considerably.
What Are Core Competencies?
Core competencies are something we’ve been aware of since they were first introduced in the early 1990s by researchers C.K Prahalad and Gary Hamel. Prahalad and Hamel ascertained that in order to capture a market, a business needed to focus on more than just revenue. They needed to either create a new demand or capitalize on an existing one.
In business, your competencies are the ways that you’ll fill that need differently or more effectively than a competitor can, and it’s something that can apply to both individuals and companies. Knowing what sets you apart is essential to shifting customer choice and becoming the favored option.
Business coaches Monkhouse & Company argue that “core competence is the engine for the development of core products and services”, going on to say that there are several types of core competencies including quality, value and innovation. The major work in your business is carried out by teams, and without knowing where your staff’s strengths and weaknesses lie, you can’t ensure you’re getting the most from each individual. As a business leader, you need to know that all job-related competencies are covered by your employees, because without them they will under-perform and your business can’t reach its full potential.
Examples of Core Competencies
Identifying team behaviors can help you work out the best way these competencies can be developed and encouraged.
- Teamworking: Teamwork is a term we hear a lot about in business, but knowing how to work well with others makes a business more harmonious and efficient. It doesn’t matter whether your team works in house or remotely — they need to be able to collaborate seamlessly and communicate ideas, show empathy and have the maturity to appreciate that no work is a standalone effort.
- Commercial awareness: Your team needs to know how the business works. Only then can they truly understand their role within it. It’s important that your team stay up to date with the industry and trends, as well as customer demographics and competitors.
- Communication: Excellent communication skills are a must in any role, and within any company. What employers need to know is that their team can convey information clearly, that they will remain professional at all times, and that they can work closely with colleagues and clients without misunderstandings. Communication isn’t just speaking though; it also entails listening carefully, and the ability to write and read information carefully.
- Decision making: You need to be confident that your team can gather information, seek out opinions and analyze the possibilities quickly and thoroughly to make a concise decision and come up with solutions. Decision making can be complex, but in business, the outcomes can be significant, so it’s a skill that team members need to possess.
The Advantages and Disadvantages of Core Competencies
One of the most valuable elements of core competencies is that it gives your business a better chance of staying competitive in the long-term. It’s all very well having a service or a product that’s initially successful, but if it’s something that competitors can duplicate, you’ll have the challenge of maintaining your share of the market. Core competencies make it easier for you to set yourself apart from the competition, using your share of space to show what makes you unique. Problems can occur when you incorrectly assign a core competency to your business, resulting in you highlighting weaknesses or ignoring your strengths simply due to a lack of understanding of the skills your team holds.
How to Recognize and Encourage Core Competencies in Your Team
From specific skill sets and professional backgrounds to experience with a target market, core competencies can be useful in a variety of ways. Recognizing these skills in your team means identifying what they do differently and better than anyone else, and then understanding how they can translate to market demand.
As a business leader, you’re likely to pay attention to the performance of your team as it relates to productivity. But dig deeper and look at how each team member works to figure out what their strengths are. A SWOT analysis can help, which looks at the Strengths, Weaknesses, Opportunities and Threats to your team. When evaluating each team member in this way, the core competencies of the group will start to show themselves, and these can then be used more strategically going forward. Competency tests can also be valuable, especially for new starters who you may not know as well.
When you’re carrying out the appraisal process, bring out areas for improvement and weaknesses that have been noted, either by yourself or by the individual in question, so that you can make a plan for improvement and development. With these exercises, you can assess the core competencies across the whole team, and determine how you can position yourself and your services to meet the needs of the business and your customers.
In determining your team’s core competencies, you can identify the underlying skills, abilities, experience and knowledge that your employees possess that can help your business provide a more unique set of services and give you the competitive advantage. High-performing businesses can also develop new competencies and build on the experience within the team, simply by recognizing what’s missing.
Chester Avey is a Guest Contributor at HR Daily Advisor.