Discover and Use Your

Core Competency
Presented by
Tom McIntire
Three Sigma, Inc.

November 19, 2008

Overview
What are core competencies and why are
they important
Identifying your core competencies
Developing core competencies

Why are core competencies

important?
They are the skill sets your organization
possesses that set it apart from its peers.
They are what make your organization
unique.
They are sources of competitive advantage.
They are the building blocks to future
opportunities and earned income ventures.

Organizational competencies
Functional capabilities and experience a firm
possesses by virtue of the way it integrates and
blends the individual skills of its personnel to
achieve a benefit. Examples :
Workers with knowledge and experience in receiving and
distributing donated goods.
Workers with knowledge and experience in supervising
and maintaining overnight shelters.
Workers with knowledge and experience in controlling
costs.
Workers with knowledge and experience in fund raising.

Table stakes.
Certain competencies are required by all
organizations in order to operate effectively
and carry out their mission.
These fundamental competencies are
called table stakes.
They define the standard level of
competency needed to sustain operations

Fundamental competencies
Marketing-provides the customers and clients
Operations/ production- provides the products
and/or services
Human resources- provides the personnel
Fund raising- provides supplementary income
Administrative- provides essential support
Accounting/ book keeping- provides financial
control
Payroll- Provides paychecks

Marketing skills
Personnel with knowledge and experience in:
The activities needed to identify the client problems and the
product characteristics and service attributes that can help
solve these problems and how to package these into the
product or service offering.
Determining the price for the products and services offered
including discounts, sliding scale fees, etc. and how payment
will be accepted.
Determining how and where the products and services will
be offered and by whom.
Promoting the products and services, communicating with
the prospective clients, and selling.

Production/ operations skills

Personnel with knowledge and experience in:
The production of the product or the delivery of
service to the client.
For organizations that produce or sell a product
this may include purchasing and inventory
management activities.
For distribution, retail, and food service type
organizations this may include procurement and
inventory management.

Human resource skills

Personnel with knowledge and experience in:
Interviewing prospective employees and managers.
Hiring and indoctrinating employees and managers.
Determining the compensation for employees and
managers and establishing the process to pay employees
and managers.
Determining the employee and manager training
requirements needed to perform their jobs and providing or
making arrangements to provide this training.
Reviewing employee and manager performance and
discharging ineffective personnel.

Administrative skills
Personnel with knowledge and experience in:
Invoicing and bill paying.
Facility maintenance and repair
Customer service and phone answering

Defining a core competency

A bundle of skills that enables an organization to provide
a particular benefit to customers.
It is not product or service specific. It contributes to the
development of a range of products and services.
Examples:
Sony- customer benefit is pocket ability and core competence is
miniaturization.
Federal Express- benefit is on time parcel delivery and core
competence is logistics management.
Rosecrans- benefit is freedom from addictive behavior and core
competence is adult and adolescent education.
Carpenters Place- benefit is a changed lifestyle and the core
competency is customized client case management.

Tests for core competency

Organizational competencies must pass
three tests to be considered core
competencies.
It must make a significant contribution to
customer perceived value or to the financial
health of the organization.
It must be unique or performed in a way that is
substantially superior to its peers.
It must be capable of being applied to new
products and services.

Identifying your organizations

core competencies
Not all organizations possess core
competencies.
Very small organizations and organizations that
provide standard services that are in high demand
will usually not possess or need core
competencies.
Table stakes are more than adequate for their success.

The clients using these organizations value

adequacy not uniqueness. Examples are food
pantries, homeless shelters, and soup kitchens.

Apple doesn't just want you to think differently about their products. It
wants you to redefine the buying experience.
Visit an Apple store, and you'd almost think that it was designed more
to create a clubhouse for Apple enthusiasts than to actually sell the
company's products. Consumers enter a store, check out Apple's new
products, attend a workshop, and sit in on a presentation or in-store
concert. Get immersed in the Apple culture, and when you're ready,
Apple will sell you a piece of the experience to take with you. Microsoft
(Nasdaq: MSFT) wants to create a similar experience with its own
chain of stores. Good luck with that, Mr. Softy.
What is the core competency of WALMART
1) Low cost operations and hence low prices 2) Better use of JIT
and other
technologies 3) Streamlined systems and technologies to maintain
communication ...
What IS THE CORE COMPERENCY OF V-Gurad?

Identifying your organizations

core competencies
Develop an inventory of your
organizational competencies
Use the core competency tests to
determine the competencies that are core.

Develop an inventory of your

organizational competencies
List your organizations competencies.
Examples:
Workers with knowledge and experience in
providing youth recreational programs.
Workers with knowledge and experience in
supervising and maintaining overnight shelters.
Workers with knowledge and experience in
controlling costs.
Workers with knowledge and experience in
fund raising.

Develop an inventory of your

organizational competencies
Identify the benefit from each competency
Examples:
The customer benefit from experience in
providing youth recreational programs is
constructive youth development.
The benefit from knowledge and
experience in controlling costs is a
reduction in operating expenses.

Develop an inventory of your

organizational competencies
Separate the competency from the product
or service. Examples:
The competency associated with providing youth
recreational programs is youth education. The
purpose of education is to change behavior and that
is what the recreational programs want to achieve.
The competency associated with experience in
controlling costs is financial management. The
purpose of financial management is to control the
financial health of the organization.

Inventory of Competencies
Competency: Workers with knowledge and
experience in providing youth recreational
programs.
Benefit: constructive youth development.
Competency: youth education.
Competency: Workers with knowledge and experience in
controlling costs.
Benefit: reduction in operating expenses.
Competency: financial management.

Determine the competencies that

are core.
Indentify those competencies that meet all of
the following criteria:
They make a significant contribution to customer
perceived value or to the financial health of the
organization.
They are unique or performed in a way that is
substantially superior to your peers.
They are capable of being applied to new products and
services.

These are your organizations core

competencies.

Developing Core Competencies

Management commitment- developing core
competencies takes time
Focus- define the competencies needed
People with appropriate skills
Train current personnel
Recruit personnel with needed skills

Integration of these skills

Usually a function of management

Institutionalize the activity through processes

and procedures