What is Your Organization’s Core Competency?

You've heard the statistics:  most businesses fail.  Some fail in a year; others fail in less than five.  The truth is, most businesses don't make it to ten years.

Think Different.  No, Really!

Did you ever notice that some companies seem to be successful, and have the golden touch, growing quarter by quarter and year by year, even decade after decade, despite external pressures like competition or economic downturns?  One such factor in their success is that they have a core competency, and they use it to decide every new product or service decision.  What's more, a core competency is obvious to everyone, inside and outside the company.  In the EOS Operating System (the system that I coach and help my clients implement), their term for this is called "core focus".

Who's got a strong core focus?  I could pick many companies, such as GE (back in the days of Jack Welch), Subway, Honda, Amazon, or Disney, but let's look at two specific companies.

Apple

apple logoIn an interview with Charlie Rose, Apple CEO Tim Cook explained that one of the core principles Steve Jobs hammered home was for the company to stay focused on doing only what you it does best. "you could put any product we have today on this little table  - and yet this year we'll ship $180 billion of them". He goes on to say:  “It’s easy to add … it’s hard to stay focused,” he said. “And so the hardest decisions we make are all the things not to work on.”

So what would you say they focus on?  My take (not in any particular order):

  1. Leading edge technology
  2. Quality  - doing whatever they do, better
  3. Ease of Design (the user experience)

Google

Google logoGoogle wasn't the first search engine.  Yet it comprises over 70% of the search market, and currently processes over 40,000 search queries every second (see more incredible Google search stats here). It wasn't the first to have an online email application.  Yet, Gmail remains the number one email application and is now up to over 1 billion users.  Youtube wasn't the first streaming video service, but is now by far the largest video streaming service on the planet, and #2 in total traffic (guess who's number 1? Hint:  rhymes with Moogle).  Google Maps is the world's most popular app for smartphones, with over 54% of all global smartphone owners using it at least once.  This list continues.  Google Adwords serves more ads (and generates more revenue) than most countries' GDP.

Google is growing its revenue and profits quarter after quarter, and has simply dominated the computer software and search market for well over a decade.  The company (restructured as parent company Alphabet in 2015), had been acquiring, on average, more than one company per week since 2010. Take a look at the Wikipedia list of all Alphabet acquisitions, and you'll see a big trend: most if not all seem to be focused on cloud, mobile, audio/video, or social technologies.

Could they have gotten into fast food, package delivery, or air travel?  Sure.  Would they be successful at dominating them?  Doubtful. None of those are their core competencies.

Google, while also a monster of acquisitions, is famous for promoting in-house innovation by asking engineers to devote 20 percent of their time to projects outside their main responsibilities.  The key directive:  work on anything as long as it relates to the core:1. it must be innovative technology, and 2. that it solves a problem.  So no matter if they are focused on software for internet / online purposes, or even software within physical hardware, Google's core remains intact.

So how do you figure out your core focus?

Gather your leadership team, and ask them to silently write answers to this two simple questions:

  1. What is your company's passion? What is is that gets everyone excited about working together?  Note:  it should never be about money.  Disney, for example, is about making people happy.
  2. What are three things that your company does that no one else can do? 

Once you share your answers with each other, how different are they?  The further apart your answers (especially your passion answers), the more work you're going to have to do to determine your core focus.

Perhaps one or even two of the core competencies aren't unique in their own right. Maybe other competitors have one like yours - like speed of service, or leading edge technology. But if you put all of those competencies together, you make a unique company with a unique core competency.

At the end, you should have a shared vision of core focus, including the company passion and competencies.   When you have the answers, you can now filter anything that you do around it.  What's hard? Get rid of anything  - a product, a service, even a target market, that does not hold true to your core competency, even if it is profitable.  And certainly don't start something new outside of it.

Watch this video from Harvard Business Review (hbr.org):

Do you need help implementing core focus / core competencies in your organization?  Talk with me.