Small Business Resource

The central skills and value-creating capabilities perceived as strengths within an organization. They typically involve a combination of application skills and technical knowledge that offer a strong competitive advantage. It is the responsibility of management and leadership to recognize and identify the organization’s core competencies and develop a strategy around them.

An organization that does something well may be said to possess a distinctive core competency. This is similar to a competitive advantage because it is something competitors are unable to replicate.

Organizations can have many competencies. An educational institution may list information delivery, engagement and educational programming as core competencies while an insurance company might identify its as leadership, organizational management and interpersonal relations.

Some believe leadership can become over enamored with core competency lists and neglect business processes and the things that don’t work in the organization. Many organizations now use core competencies as a component of a balanced scorecard to determine goals and monitor results.