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Recently, I met a disappointed CEO of a local company who lost millions in the real estate business. Real estate was not his core business. His company's core competencies were construction and electromechanical. He should have avoided the diversification. The market witnessed many new developers in real estate and he became one of the investors who thought real estate required less headaches when doing business. He had world-class MEP experts and civil engineers whom he could have used well.
CK Prahalad and Gary Hamel, the ones who introduced the core competence concept, defined it as ''a bundle of skills and technologies that enable a company to provide a particular benefit to customers.'' Core competence is a way of saying that every corporate should stick to its knitting.
The CEO should have followed Prahalad and Hamel's idea of exploiting competencies, but he did not. He wanted easy cash. In the end, he lost the battle.
Core competencies are the collective learning in an organization. If it is about harmonizing streams of technology, it is also about the organization of work and the delivery of value. For instance, Sony's competency is miniaturization. Sony has to ensure that technologists, engineers and the marketing team share an understanding of customer needs and innovation possibilities.
If we concentrate our attention on our core competencies, we will find a deep commitment to working across organizational boundaries. Our training must be focused on identifying and developing product-based competencies. Physical gains deteriorate over time, but core competencies do not shrink with use. They are enhanced if they are applied and shared. Talent management must ensure competencies are nurtured and protected. Otherwise, companies will lose qualified people over time like the CEO who lost his focus on his core business.
• Core competencies are the collective learning in an organization
• They enable a firm to provide specific benefits to customers
• Competencies are enhanced if they are applied and shared
Learn how to practice the art of delegating tasks
Source: Dr. Pon Mohaideen Pitchai, Special to Jobs & Careers
The writer is a Dubai-based HR and Management Consultant