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What is a Core Competency?

Malcolm Tatum
Updated May 17, 2024
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Core competency has to do with the degree of efficiency and expertise demonstrated in a particular area. While the term was really developed for use in business settings, it is used today in all sorts of settings. Along with use in corporations, references to core competency can be found in such diverse settings as faith-based organizations, non-profits, and even in the home.

Also referred to as core capability, core competency focuses on something that is done especially well by an individual or entity. In terms of a business setting, this type of competency is understood to exist when three specific elements exist. The company is proficient at providing consumer benefits, offers something that is unique and difficult for the competition to emulate, and has a product of service base that can serve a wide range of consumer markets.

It is important to note that core competency does not emerge full-blown. In most cases, it is necessary to actively cultivate and develop this level of business competence. A company may move toward this competency over a period of years, slowly refining operational and marketing processes, as well as enhancing the product line along the way. As the company’s competitive edge increases, it moves closer to a true state of core competency.

A core competency can develop in all facets of the business. For example, the company may develop such a strong management team that the leadership of the business allows the company to grow rapidly into new markets. The sales and marketing efforts may cultivate advertising campaigns and sales strategies that are different from the competition and are successful at capturing a wider range of consumers and markets. Even in the area of human resources, the competency can emerge as the human resource effort becomes proficient at maintaining high morale among the employees and thus reducing employee turnover significantly.

While the general idea of core competency has been around for a number of years, the process was first defined by C.K. Prahalad and Gary Hamel in 1990. Outlined in an article published by the Harvard Business Review, the authors defined the basics of the concept and also offered examples that were contemporary for the time. Over the years, these same fundamentals have come to be the benchmark that must be met in order for core competency to be present.

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Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By hamje32 — On Oct 18, 2011

@SkyWhisperer - I think some core competency development takes place over time, on the job, just as the article says. The reason is that some jobs are highly specialized.

It’s not likely that if you advertise for something that is unique to your company that you will get job applicants uniquely qualified for that position. You can, however, look for applicants with experience and skills that would make them suitable for that position.

In one company that I worked for, as an example, I was hired on as a policies and procedures coordinator. I had no prior experience with that job, but I did have an English degree and a training background, which made me a suitable candidate (at least the employer thought so).

By SkyWhisperer — On Oct 17, 2011

@allenJo - I totally agree. I firmly believe in the core competency test, which is an ideal way of quantifying what each current – and prospective – employee actually knows.

In the industry I am in, software development, it’s not uncommon to advertise a position and then get flooded with resumes by people claiming that they know this or that computer technology.

Computer programmers in the past have had a tendency to embellish or at least slightly exaggerate what they think they know; I can understand that, because it’s hard to quantify what you know simply on the basis of having read a book or used a programming language in a few instances on your last job.

A core competency test gives you a clearer picture of what the applicant actually knows, in addition to areas where he may need improvement. I like it also because it provides a level playing field; everyone takes the same test.

By allenJo — On Oct 16, 2011

Employee core competencies are measured in our business every year around review time. It consists of a rubric or checklist of qualifications that each employee must meet.

There is no grading system as such but you are generally told if in each of the items on the checklist you have shown demonstrated proficiency or you need improvement in that area.

Personally, I think it’s a good system, rather than just providing an overall “you’re doing a good job” or something like that. The checklist gets down to specific, tangible, actionable things that employees can focus on.

It also works in their defense too. If they have improved in those areas, then they can rightly say that they are doing a good job. It works for both manager and employee in the end, in my opinion.

By rajesha — On Feb 01, 2010

I want detailed materials on competancy mapping, process method and formats.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
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