November 19, 2008November 19, 2008

Discover and Use Your Discover and Use Your Core CompetencyCore Competency

Presented byPresented by

Tom McIntireTom McIntire

Three Sigma, Inc.Three Sigma, Inc.

OverviewOverview

What are core competencies and why are What are core competencies and why are they importantthey important

Identifying your core competenciesIdentifying your core competencies

Developing core competenciesDeveloping core competencies

Why are core competencies Why are core competencies important?important?

They are the skill sets your organization They are the skill sets your organization possesses that set it apart from its peers.possesses that set it apart from its peers.

They are what make your organization They are what make your organization unique. unique.

They are sources of competitive advantage. They are sources of competitive advantage.

They are the building blocks to future They are the building blocks to future opportunities and earned income ventures. opportunities and earned income ventures.

Organizational competenciesOrganizational competenciesFunctional capabilities and experience a firmFunctional capabilities and experience a firm

possesses by virtue of the way it integrates andpossesses by virtue of the way it integrates and

blends the individual skills of its personnel toblends the individual skills of its personnel to

achieve a benefit. Examples :achieve a benefit. Examples :Workers with knowledge and experience in receiving and Workers with knowledge and experience in receiving and distributing donated goods.distributing donated goods.

Workers with knowledge and experience in supervising Workers with knowledge and experience in supervising and maintaining overnight shelters.and maintaining overnight shelters.

Workers with knowledge and experience in controlling Workers with knowledge and experience in controlling costs.costs.

Workers with knowledge and experience in fund raising.Workers with knowledge and experience in fund raising.

Table stakes.Table stakes.

Certain competencies are required by allCertain competencies are required by all

organizations in order to operate effectivelyorganizations in order to operate effectively

and carry out their mission.and carry out their mission.

These fundamental competencies are These fundamental competencies are called “table stakes”. called “table stakes”.

They define the standard level of They define the standard level of competency needed to sustain operations competency needed to sustain operations

Fundamental competenciesFundamental competencies

Marketing-provides the customers and clientsMarketing-provides the customers and clients

Operations/ production- provides the products Operations/ production- provides the products and/or servicesand/or services

Human resources- provides the personnel Human resources- provides the personnel

Fund raising- provides supplementary incomeFund raising- provides supplementary income

Administrative- provides essential supportAdministrative- provides essential support

Accounting/ book keeping- provides financial Accounting/ book keeping- provides financial controlcontrol

Payroll- Provides paychecksPayroll- Provides paychecks

Marketing skillsMarketing skills

Personnel with knowledge and experience in:Personnel with knowledge and experience in:The activities needed to identify the client problems and the The activities needed to identify the client problems and the product characteristics and service attributes that can help product characteristics and service attributes that can help solve these problems and how to package these into the solve these problems and how to package these into the product or service offering.product or service offering.Determining the price for the products and services offered Determining the price for the products and services offered including discounts, sliding scale fees, etc. and how payment including discounts, sliding scale fees, etc. and how payment will be accepted.will be accepted.Determining how and where the products and services will Determining how and where the products and services will be offered and by whom.be offered and by whom.Promoting the products and services, communicating with Promoting the products and services, communicating with the prospective clients, and selling.the prospective clients, and selling.

Production/ operations skillsProduction/ operations skills

Personnel with knowledge and experience in:Personnel with knowledge and experience in:The production of the product or the delivery of The production of the product or the delivery of service to the client.service to the client.

For organizations that produce or sell a product For organizations that produce or sell a product this may include purchasing and inventory this may include purchasing and inventory management activities. management activities.

For distribution, retail, and food service type For distribution, retail, and food service type organizations this may include procurement and organizations this may include procurement and inventory management.inventory management.

Human resource skillsHuman resource skills

Personnel with knowledge and experience in:Personnel with knowledge and experience in:Interviewing prospective employees and managers.Interviewing prospective employees and managers.Hiring and indoctrinating employees and managers.Hiring and indoctrinating employees and managers.Determining the compensation for employees and Determining the compensation for employees and managers and establishing the process to pay employees managers and establishing the process to pay employees and managers.and managers.Determining the employee and manager training Determining the employee and manager training requirements needed to perform their jobs and providing or requirements needed to perform their jobs and providing or making arrangements to provide this training.making arrangements to provide this training.Reviewing employee and manager performance and Reviewing employee and manager performance and discharging ineffective personnel.discharging ineffective personnel.

Administrative skillsAdministrative skills

Personnel with knowledge and experience in:Personnel with knowledge and experience in:Invoicing and bill paying.Invoicing and bill paying.

Facility maintenance and repairFacility maintenance and repair

Customer service and phone answeringCustomer service and phone answering

Defining a core competencyDefining a core competency

A bundle of skills that enables an organization to provide A bundle of skills that enables an organization to provide a particular benefit to customers. a particular benefit to customers. It is not product or service specific. It contributes to the It is not product or service specific. It contributes to the development of a range of products and services. development of a range of products and services. Examples:Examples:– Sony- customer benefit is pocket ability and core competence is Sony- customer benefit is pocket ability and core competence is

miniaturization.miniaturization.– Federal Express- benefit is on time parcel delivery and core Federal Express- benefit is on time parcel delivery and core

competence is logistics management.competence is logistics management.– Rosecrans- benefit is freedom from addictive behavior and core Rosecrans- benefit is freedom from addictive behavior and core

competence is adult and adolescent education.competence is adult and adolescent education.– Carpenters Place- benefit is a changed lifestyle and the core Carpenters Place- benefit is a changed lifestyle and the core

competency is customized client case management.competency is customized client case management.

Tests for core competencyTests for core competency

Organizational competencies must passOrganizational competencies must passthree tests to be considered core three tests to be considered core competencies.competencies.

It must make a significant contribution to It must make a significant contribution to customer perceived value or to the financial customer perceived value or to the financial health of the organization.health of the organization.It must be unique or performed in a way that is It must be unique or performed in a way that is substantially superior to its peers.substantially superior to its peers.It must be capable of being applied to new It must be capable of being applied to new products and services. products and services.

Identifying your organization’s Identifying your organization’s core competenciescore competencies

Not all organizations possess core Not all organizations possess core competencies.competencies.

Very small organizations and organizations that Very small organizations and organizations that provide standard services that are in high demand provide standard services that are in high demand will usually not possess or need core will usually not possess or need core competencies. competencies. – Table stakes are more than adequate for their success. Table stakes are more than adequate for their success.

The clients using these organizations value The clients using these organizations value adequacy not uniqueness. Examples are food adequacy not uniqueness. Examples are food pantries, homeless shelters, and soup kitchens. pantries, homeless shelters, and soup kitchens.

Identifying your organization’s Identifying your organization’s core competenciescore competencies

Develop an inventory of your Develop an inventory of your organizational competenciesorganizational competencies

Use the core competency tests to Use the core competency tests to determine the competencies that are core.determine the competencies that are core.

Develop an inventory of your Develop an inventory of your organizational competenciesorganizational competencies

List your organization’s competencies.List your organization’s competencies.Examples:Examples:

Workers with knowledge and experience in Workers with knowledge and experience in providing youth recreational programs.providing youth recreational programs.Workers with knowledge and experience in Workers with knowledge and experience in supervising and maintaining overnight supervising and maintaining overnight shelters.shelters.Workers with knowledge and experience in Workers with knowledge and experience in controlling costs.controlling costs.Workers with knowledge and experience in Workers with knowledge and experience in fund raising.fund raising.

Develop an inventory of your Develop an inventory of your organizational competenciesorganizational competencies

Identify the benefit from each competencyIdentify the benefit from each competency

Examples:Examples:

The customer benefit from experience in The customer benefit from experience in providing youth recreational programs is providing youth recreational programs is constructive youth development.constructive youth development.

The benefit from knowledge and The benefit from knowledge and experience in controlling costs is a experience in controlling costs is a reduction in operating expenses.reduction in operating expenses.

Develop an inventory of your Develop an inventory of your organizational competenciesorganizational competencies

Separate the competency from the productSeparate the competency from the productor service. Examples:or service. Examples:

The competency associated with providing youth The competency associated with providing youth recreational programs is youth education. The recreational programs is youth education. The purpose of education is to change behavior and that purpose of education is to change behavior and that is what the recreational programs want to achieve.is what the recreational programs want to achieve.

The competency associated with experience in The competency associated with experience in controlling costs is financial management. The controlling costs is financial management. The purpose of financial management is to control the purpose of financial management is to control the financial health of the organization.financial health of the organization.

Inventory of CompetenciesInventory of Competencies

Competency: Workers with knowledge andCompetency: Workers with knowledge andexperience in providing youth recreationalexperience in providing youth recreationalprograms.programs.

Benefit: constructive youth development.Benefit: constructive youth development.Competency: youth education.Competency: youth education.

Competency: Workers with knowledge and experience inCompetency: Workers with knowledge and experience incontrolling costs.controlling costs.

Benefit: reduction in operating expenses.Benefit: reduction in operating expenses.Competency: financial management. Competency: financial management.

Determine the competencies that Determine the competencies that are core.are core.

Indentify those competencies that meet all ofIndentify those competencies that meet all ofthe following criteria:the following criteria:

They make a significant contribution to customer They make a significant contribution to customer perceived value or to the financial health of the perceived value or to the financial health of the organization.organization.They are unique or performed in a way that is They are unique or performed in a way that is substantially superior to your peers.substantially superior to your peers.They are capable of being applied to new products and They are capable of being applied to new products and services. services.

These are your organization’s core These are your organization’s core competencies.competencies.

Developing Core CompetenciesDeveloping Core CompetenciesManagement commitment- developing core Management commitment- developing core competencies takes timecompetencies takes time

Focus- define the competencies neededFocus- define the competencies needed

People with appropriate skillsPeople with appropriate skills– Train current personnelTrain current personnel– Recruit personnel with needed skillsRecruit personnel with needed skills

Integration of these skillsIntegration of these skills– Usually a function of management Usually a function of management

Institutionalize the activity through processes Institutionalize the activity through processes and proceduresand procedures