How often have you sat in a meeting regarding the IT portfolio or a new strategy and the conversation quickly
turns to an opinion regarding the organization's core competencies? How many times has someone signed
up for work or taken on a project that is way beyond their capability, beyond the vendor capability and in some
cases way outside of your business model? The key is to understand an organization’s capabilities while
simultaneously remaining mindful of the danger with core competencies.
Most companies lack a good understanding, and in some cases, a basic knowledge of their core competencies. Although this phrase was introduced back in the late 90’s and you have probably completed several studies around core competenices in your professional career, it is still relevant in just about every IT strategy discussion. This relevance becomes more critical when you are considering options like managed service delivery or approaching some unique combination of ITO, BPO and KPO.
One of the dangers to avoid when identifying core competencies is to make sure the group narrows rather than
broadens the definition. When tasked with figuring out what is core, some teams will define everything they do as a competence. They may not consider whether they do a good job or if the competency is a market differentiator.
Being precise and focused around what you consider to be core is critical. A narrow view will help you in the long run. Narrow allows the team to focus its energy on a manageable set of compentencies around which to drive transformational change. Focusing on one or two critical processes that are essential to the business model and their supporting competencies is a great way to set priorities and charter a roadmap for successful delivery.
Some examples that are indicators of being in the” danger zone” of core competencies include:
- A core competency list that includes “everything and the kitchen sink." Teams will often create a list that contains every skill or generic process utilized by the company. Watch out if it includes things that you buy rather than build, a brand item, or the competency just does not exist.
- The competency list is not your real set of competencies. The list should include a few items and only those skills or capabilities that are integral to your current and future business model.
- Competency definitions are pithy. When the team creates two-word examples that lack any definition, how can you explain to your customers and your internal team why these are core and ultimately why you are going to do something with them in the future?
- Competency lists are too long. Some companies think it’s more credible to have a longer list and that this builds confidence in the business model. In reality, a long list can mislead or overstate what is really a part of the business model.
If you are not mindful of some of the pitfalls, you may be faced with the challenge that your company does not
have defined core competencies. If that happens, go back and get focused on how to define this key strategy
You may have to go back to basics in order to avoid the dangers noted above.