Stay Within Your Core Competencies
FastTrac, Kauffman Foundation
Because a core competence is a capability that could help your business achieve a competitive advantage, selecting products and services that can be offered within your current core competencies just makes sense.
From time to time as you think about your customers, opportunities for new products or services or refinements will occur to you. Some of these will be within your company’s core competencies, but some will be clearly beyond your strengths. While it is sensible to first consider opportunities within your core competencies, those outside your core competencies may deserve some consideration as well.
Sometimes companies can create breakthrough products or services by pushing beyond their skill set. Sometimes companies have to move beyond their skills to survive. In the early 1990’s Microsoft® had limited competency in building Web-browsing technologies, and Netscape ruled the Web. Realizing the competitive danger in being a backseat player when the market was driving toward Internet connectivity, Microsoft invested heavily in research and development to create Internet Explorer®, which eventually dominated the Internet with a 95 percent market share.
While Microsoft’s wild success may encourage you to push beyond your core competencies, be careful. Microsoft had over $20 billion in the bank at the time. They could afford to create a new set of core competencies. Most entrepreneurial companies don’t have that type of luxury. On the other hand, if you find yourself in an industry that is becoming obsolete, you may be forced to take a chance with fundamental change.
One engineering technology entrepreneur wanted to share his theories of leadership outside his current market and explored the possibility of starting a magazine about technology leadership as a spin-off of his consulting business. During exploratory research, he found out quickly that magazines are not so much about information dissemination as they are about advertising and marketing—areas well outside his core competence. He decided to stick to what he knew best.
© 2007 Ewing Marion Kauffman Foundation. All rights reserved.