Core competencies meld customer value with a special ability of the producer.
Leadership rests on being able to do something others cannot do at all or find difficult to do even poorly. It rests on core competencies that meld market or customer value with a special ability of the producer or supplier. Some examples: the ability of the Japanese to miniaturize electronic components, which is based on their three-hundred-year-old artistic tradition of putting landscape paintings on a tiny lacquered box; or the almost unique ability GM has had for eighty years to make successful acquisitions.
But how does one identity both the core competencies one has already and those the business needs to take and maintain a leadership position? How does one find out whether one’s core competence is improving or weakening? Or whether it is still the right core competence and what changes it might need? The first step is to keep careful track of one’s own and one’s competitors’ performance, looking especially for unexpected successes and for unexpected poor performance in areas where one should have done well. The successes demonstrate what the market values and will pay for. They indicate where the business enjoys a leadership advantage. The nonsuccesses should be viewed as the first indication that the market is changing or that the company’s competencies are weakening.
ACTION POINT: Identify your organization’s core competencies. Determine whether they are improving or getting weaker.
Management Challenges for the 21st Century
* Source: The Daily Drucker by Peter F. Drucker