How Clinging To Core Competencies Is Breaking Your Organization’s Heart
Since Gary Hamel and CK Prahalad put forth the idea of “core competencies” in a 1990 Harvard Business Review article, “The Core Competence of the Corporation,” organizations have taken this insight as permission to outsource various parts of their business operations.
With “core competencies” organizations became machines with core functions that made the machine work, and non-core functions that kept the cogs greased and the tires inflated. Those later jobs could be accomplished by others: essential, but ancillary. Most importantly, they were competencies that didn’t differentiate an organization in its market. When hiring a McKinsey consultant, few managers consider McKinsey’s office design or their marketing when making the decision. McKinsey provides trusted management advice and builds renewable relationships (my words, not theirs). A manufacturing firm may be known for its quality plant design, knowledge of assembly techniques and high quality—probably not for a world class expense management system.
Daniel W. Rasmus, Founder and Principal Analyst of Serious Insights, is an internationally recognized speaker on the future of work and education. He is the author of several books, including Listening to the Future and Management by Design.