I attended a gathering of a select group of small business owners who were runner-ups for the “Small Business Person of the Year”. During the event each owner was asked to stand up and briefly state what they thought made his/her business so successful. One of the owners stated proudly it was his employees - he felt he was able to attract and retain good employees. That was his “secret”.
Later, I had the opportunity to privately ask him what made his employees “better” and how was he able to attract these better employees. Here is how that conversation unfolded.
“Are your employees more qualified than industry standards - have higher degrees?” I asked.
“No”, he replied.
“Do you offer better benefits or pay and thus can attract better employees?”
“Do you offer performance incentives or shares of company stock?”
“Is your work environment any different than others in your industry?”
“More vacation time, gym memberships, or other perks?”
“So then why then do you believe it was your employees and your ability to attract them that sets you apart from your competitors?”
He hesitated, gave a puzzled look, then said he didn’t really know.
The sad fact is this company president didn’t know what attribute made his company successful. Most likely his employees are no more or less qualified than other in his industry. And because he doesn’t know, he is more likely than not to stray away from it or unknowingly allow it to waste away. Once this happens, the business is gone.
This owner did not know or understand his company’s core competency; the unique thing they do or process they employ or value they add to win business that would be difficult for their competitors to imitate. Your company’s core competency is the foundation of your business and therefore you should know how to identify it, nurture it, and exploit it if want to successfully grow.
Let’s take a moment to discuss, as an example, the core competencies of two well known businesses, Dominos Pizza and Honda.
Dominos made its mark by guaranteeing a quality pizza delivered to your door in 30 minutes or less. Their core competency was the “process” they designed starting with the how they selected the store locations and ending with the delivery method. It was this value added benefit (a warm pizza delivered quickly) that drove their customers to choose their product over the plethora of other pizza restaurants. Dominos continuously invested to refine that process (their core competency) and keep it as a discriminator and a method for growing their business beyond pizza to now include hot wings, pasta, etc....
Honda’s core competency was building high quality, reliable, light weight powertrains and engines; first for motorcycles then later small cars and the rest is history. Their continual investment in engine and powertrain manufacturing and design technology is a reflection of how well they understood what made their product the preferred choice regardless of whether it was in a weed whacker, a lawn mower, an ATV, a motorcycle or a luxury automobile.
What is your company’s core competency(ies)?
By the way, it is very rarely “our customer service” or “our people” as this is considered a prerequisite for participation or an expected standard of most businesses.
Investing in your core competency will ensure it continues to provide you with the competitive advantage necessary to grow your business.