Saturday, November 23, 2019

The Multidimensional Perspectives of Organizational Core Competency

Digital businesses need to break down silos or overly rigid hierarchy, and build core competencies to improve business performance and maturity.

Digital transformation represents a break from the past, with a high level of impact and complexity. To evoke fundamental evolutions of complex business systems, digital organizations need to have a unique set of core competencies to achieve business goals.

Competency is a combination of capabilities with a focus, and core competency is a harmonization of multiple capabilities to differentiate the business from its competitors, gain market shares, improve business profitability, stand out, build up the long-term business advantage and a strong organizational brand. Here are multidimensional perspectives of organizational core competency.


First mover advantage: The digital era upon us means the exponential growth of information, increasing speed of change, and fierce competitions. Creating trends is about anticipating direction. Gaining first mover advantage is all about foreseeing and applying trends, that’s where you win the competitive edge. To out-beat competitors and thrive for the long term, the leading companies need to build a differentiated set of business competencies and accelerate the organizational performance.

While business laggards only try to emulate, there is a risk to that because when you emulate your competitor, you start looking like them, perhaps you lose your authenticity and forget your business purpose. Business leaders and managers should make an objective assessment of their current organizational environment and their business strengths and weaknesses by asking: What is our strategic advantage? What percentage of that market we expect to capture over what period of time? Why would someone prefer to buy from us? What is the cost point to be competitive? Which capabilities already exist and which must be developed or changed. They need to ensure that their companies not only have “me too” type competitive necessity but also keep developing core competencies based on multilayered and integral business capabilities to gain the first mover advantage.

Resource management: To build the organizational core competency, successful capacity planning and resource management are critical to ensure that resource is available before they are needed. To address the resource competition issue, the benefit must often be articulated in user-specific currency.

The bottom line is, for any company to succeed, it is essential for the entire company to be pulling in the right direction for developing core competencies by allocating assets, resources, time, and assets scientifically. Thus, an effective resource allocation scenario helps to take advantage of resources effectively, optimize cost, set priority, keep business processes transparent, and develop the organizational core competency to “run, grow, and transform” business successfully.

Customer captivity: Digital is the era of customer centricity. Customer Experience is an aggregate of all different strategies around product differentiation, pricing differentiation, channel and any other activities which are intended to give the customer a unique experience. In order for customer experience to be a differentiator as a strategic option, organizations are able to map one company's experience versus competitor's customer experiences.

In leading companies, customers are “captured “by a products/services/vendors and are resistant to use another products/services. Companies across the vertical sectors are at the different stage of business life cycle, some run down a diminishing returns pathway, others do the best they can with existing products/services/customers and spend a lot of time on future products/customers. Therefore, organizations should examine the entire customer lifecycle from acquisition through disposal, and isolate where in the experience they choose to invest, where they choose to compete and where they choose to innovate. The strategic and operational priorities are key factors in customer experience management.

Coordination, moral force: The digital business today is dynamic, continuous, expansive, interdependent, hyperconnected, and interactive. Businesses nowadays are using digital platforms and collaboration tools to improve business relationships, engage employees, initiate broader conversations, and build digital clusters or communities.

Running a high mature digital organization is about harnessing cross-functional communication and real-time collaboration to create multiple pathways for digital flow and develop organizational core competencies. Collaboration happens in the space between people in relationship receptively and thoughtfully interacting with interest and caring for one another’s needs. To shape the problem-solving competency, it’s important to cultivate the zest for generating fresh ideas or solving existing or emerging business problems by breaking down silos, seeking out help and harnessing mass collaboration.



Economies of scale: Digital organizations arise when the scale of the interrelations, interactions, and collaboration amplifies collective business competencies to achieve more values for the organization. The real challenge is to understand where and how you can and should improve to get the biggest effect and scale up across the digital ecosystem.

To scale up, organizations must begin thinking about ways with strategic planning to broaden their ecosystems which become more responsive and flexible. Organizations must match the vision and tailor their own needs to develop a set of next practices to scale up by adding the right ingredients and going digital internally and culturally. It’s about how to achieve the economies of scale, keep the business highly connected and continually deliver what the business needs and maximize the digital potential of the company.

Organizations today need to be fast and flexible, have less boundary but better abilities for dots connections. Business leaders should envision where the future will be for the business in order to adapt to changes in a timely matter, break down silos or overly rigid hierarchy, and build core competencies to improve business performance and maturity.


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