Tuesday, October 5, 2010

Core Competency

We talk about this a lot, right? And at times without even understanding what it means. This is one of those jargon which you would throw just to show off that you can talk business or just to confuse people (as half don't understand what exactly it means). So how would you define this term? Is it something at which somebody is good at? Or is it more than that? Of course, if I am babbling so much then it would definitely be more than that. There are 2 criteria: Something at which somebody is good at and that something provide that person an edge over others. If it doesn't provide you that edge or so as to say, competitive advantage, over others then its not your core competency, no matter how good you might be at that something.

Core Competency is simple but difficult to identify. Its the first step in designing any strategy. Identify the core competency and then build upon that. Some do it other way round too, identify the opportunity in the market and then build your core competency in that area. But whatever path you might take, inside-out or outside-in, you have to deal with core competency.

It is a very important tool for any strategist. We use this concept in designing the strategies worth billions, shaping new businesses or realigning some. But all this is still limited to the business world. Have you ever given a thought, what is the most important strategy that you have to make? One that everyone should make but not everyone does make. Its the strategy of your life. Now, all those who have actually, ever, made a strategy for their life... even a rough draft... raise your hand... Oh! no one!!!! I guess so. But thats the truth. Many of my juniors ask me, what should they do for future? Should they take up a job... go for MS.... go for MBA....etc.. Few days ago my brother was writing SoP for FMS and he asked me what to write in that. I told him, write why do you want to do MBA (brilliant answer, huh :p) He told me he don't exactly know. Fortunately, I know my brother well enough, so I just helped him to find the answer by figuring out his core competency and his interest areas.

Its very simple. Again there are 2 ways to do it: inside-out and outside-in. In inside-out, first find out what makes you happy and what are you good at (because generally the things which you enjoy most, you are good at them) and then try to find out how they can give you the competitive advantage over others. For outside-in, first find out the opportunity in the market and then develop competency in that area (like there is huge demand of investment bankers so let me major in finance). But outside-in is risky for the reasons that you have to develop the competency and remember we are talking about you so that means changing yourself and there is a great risk that you end up doing something which you don't enjoy... which in the long run will make you in-competent as you might lose your core competency as this was imposed on you in one sense.

I was thinking about my own core competency. I figured out that I am good at solving problems, analysis and also a good learner. Moreover, I am highly process oriented. And not just am good at these, I love doing such kind of stuff. In some sense it also gives me competitive advantage.... So, these are probably my core competencies (told you, simple but difficult to identify). Now, I guess I should look for a suitable opportunity (read job) to augment these in the open market ;)


Chintan Agarwal said...

Core competency is a pervasive idea today but it was revolutionary when it was proposed by CK Prahalad, amongst others.

Aakash said...

yeah. the 2 criteria that I wrote were CK Prahalad's only. But my point is, all these theories and concepts have been designed for businesses but they can used in our personal lives also.... some directly and others not so directly.