4 Ways Your Competencies Drive Your Strategy

Core competencies can help you decide which initiatives to pursue and which ones to avoid. By appreciating what you’re great at and applying it to your initiative portfolio, you can achieve a much higher level of success.

One critical aspect of strategic planning is deciding where you will or will not compete. A way I encourage organizations to think about that is to look at their core competencies. A core competency is something your organization is great at. I know your organization is probably good at a lot of things. But what are the two things you would hold up and say “we’re better than anyone else at these two competencies”?

Core competencies could be things like the quality of your product, your ability to innovate, the efficiency of your supply chain, the strength of your brands, or your technology infrastructure. There are a lot of things that you could be good at, so take a step back and ask “how do we compete in the marketplace?” Your organization likely has a primary and secondary core competency. The primary competency is the one you’re going to play to first. The secondary competency is often a “platform” for making your primary competency strong.

Allow me to offer a couple of examples.

Starbucks. I would argue that their two core competencies are the quality of their product (primary) and their service (secondary).

Procter & Gamble. Their core competencies would be product development (primary) and marketing (secondary).

Once you’ve identified your two primary core competencies, it’s helpful to evaluate your initiative portfolio using those competencies as a lens. Look at Competency One and Competency Two relative to one another. Get an understanding of whether the market, the product, or the initiative you’re pursuing relies upon that core competency. Analyze the relative importance of those competencies as they relate to your ability to successfully complete that initiative, launch that product, or enter that market.

Prioritizing Your Efforts Based on Competencies

Your competencies can help you prioritize your work. Depending upon how relevant (or irrelevant) your competencies are for a particular project, you’ll find yourself taking one of four approaches to that initiative: Own, Pursue, Consider, or Avoid.

Own: In some situations, an initiative, a market you’re looking to enter, or a product you’re looking to launch plays very well to both of your core competencies. Those are the types of opportunities you should “own.” You should own that market. You should try to own that product category. Prioritize these opportunities at the top of your list. These are situations where you’re most likely to succeed given the overlap between your skills and the skills the market requires for you to be successful.

Pursue: There will be opportunities where mainly your primary core competency comes into play but your secondary core competency is less relevant. You should pursue those opportunities and they should be reasonably high-priority. Why? You’re known for that primary core competency. You’re great at it. Applying it to these opportunities should result in positive economic outcomes and operational results that are consistent with your long-term strategy.

Consider: You might find opportunities where your second core competency comes to play but your primary core competency is not relevant. You should consider pursuing those opportunities because they might be attractive. Just realize they’re not as perfect of a fit as opportunities you should “own” or ones where your primary core competency is going to drive your success. If you pursue too many of these types of opportunities, you may find yourself going “off strategy” because you’ve allocated too many resources to something that’s not your organization’s “true purpose.”

Avoid: For some opportunities, neither core competency comes into play. Your analysis may indicate they’re both irrelevant for that particular opportunity. Those are the types of opportunities you should avoid because it’s very difficult to succeed in a market or a product category where you don’t have the required skills to compete.

Prioritize your efforts more strategically by considering your core competencies. Take a moment, step back from your organization, and ask “what are we truly great at? What’s first? What’s second?” The answers to those questions can inform the types of opportunities you’re going to pursue as well as how you prioritize them.

If you need help defining your core competencies and applying them to your strategic plan, we can help. Take a look at our Simplified Strategic Planning Program.  We’ll not only help you build your strategy – we’ll teach you a method for doing so on your own!

Want to learn more about this topic? How about taking an entire course on it? Check out the video below to learn more about the course and get started. Or you can go directly to the course and start learning more about strategic planning fundamentals.  The entire course is available at lynda.com. Enjoy!

– Mike Figliuolo at thoughtLEADERS, LLC

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