Core Competencies What They Are and How to use Them

Richard J. Naylor
What is Core Competency?
Core competency is a unique skill or technology that creates distinct customer value. For instance, core competency of Federal express (Fed Ex) is logistics management. The organizational unique capabilities are mainly personified in the collective knowledge of people as well as the organizational system that influences the way the employees interact. As an organization grows, develops and adjusts to the new environment, so do its core competencies also adjust and change. Thus, core competencies are flexible and developing with time. They do not remain rigid and fixed. The organization can make maximum utilization of the given resources and relate them to new opportunities thrown by the environment. Resources and capabilities are the building blocks upon which an organization create and execute value-adding strategy so that an organization can earn reasonable returns and achieve strategic competitiveness.

Figure: Core Competence Decision Resources are inputs to a firm in the production process. These can be human, financial, technological, physical or organizational. The more unique, valuable and firm specialized the resources are, the more possibly the firm will have core competency. Resources should be used to build on the strengths and remove the firms weaknesses. Capabilities refer to organizational skills at integrating its team of resources so that they can be used more efficiently and effectively. Organizational capabilities are generally a result of organizational system, processes and control mechanisms. These are intangible in nature. It might be that a firm has unique and valuable resources, but if it lacks the capability to utilize those resources productively and effectively, then the firm cannot create core competency. The organizational strategies may develop new resources and capabilities or it might make stronger the existing resources and capabilities, hence building the core competencies of the organization. Core competencies help an organization to distinguish its products from its rivals as well as to reduce its costs than its competitors and thereby attain a competitive advantage. It helps in creating customer value. Also, core competencies help in creating and developing new goods and services. Core competencies decide the future of the organization. These decide the features and structure of global competitive organization. Core competencies give way to innovations. Using core competencies, new technologies can be developed. They ensure delivery of quality products and services to the clients.

Core competencies, however, are characteristics of the organization as a whole. Libraries can utilize core competencies as a tool to develop and provide superior services. A description and review of the concepts of core competencies are included and a framework for their development and use is given.
The concept of core competencies was developed in the management field. Prahalad and Hamel (1990) introduced the concept in a Harvard Business Review article. They wrote that a core competency is "an area of specialized expertise that is the result of harmonizing complex streams of technology and work activity." As an example they gave Honda's expertise in engines. Honda was able to exploit this core competency to

develop a variety of quality products from lawn mowers and snow blowers to trucks and automobiles. It is important to distinguish between individual competencies or capabilities and core competencies. Individual capabilities stand alone and are generally considered in isolation. Gallon, Stillman, and Coates (1995) made it explicit that core competencies are more than the traits of individuals. They defined core competencies as "aggregates of capabilities, where synergy is created that has sustainable value and broad applicability." That synergy needs to be sustained in the face of potential competition and, as in the case of engines, must not be specific to one product or market. So according to this definition, core competencies are harmonized, intentional constructions. Coyne, Hall, and Clifford (1997) proposed that "a core competence is a combination of complementary skills and knowledge bases embedded in a group or team that results in the ability to execute one or more critical processes to a world class standard." Two ideas are especially important here. The skills or knowledge must be complementary, and taken together they should make it possible to provide a superior product." The Characteristics of Core Competencies The characteristics of core competencies are as follows: 1. They rpovide a set of unifying principles for the organization and they are pervasive in all strategies. 2. They provide access to a variety of markets. 3. They are critical in producing end products. 4. They are rare or difficult to imitate. Let's consider each of these characteristics in turn: Core competencies provide a set of unifying principles for the organization. Such principles are not necessasrily evident to the consumer but they are to management. Consumers recognize that Honda makes high-quality engines, but from a managerial perspective, the skills and technologies behind engine manufacturing are woven into the fabric of the company. Unless competencies are pervasive they are at best potential core competencies. However, in an organization that has not defined itself, identifying potential core competencies is an important step. Core competencies also are pervasive in all strategies. For Honda, when management decisions are made, the technology behind engine production is ever present. With such a unifying principle, strategic planning is facilitated. It is much harder to plot strategy when goals are diffuse, fragmented, or contradictory. In the case of libraries, providing information and insuring that patrons have the ability to access information are pervasive principles. Core competencies must provide access to a variety of markets. With change a constant factor in today's marketplace, successful organizations must be able to provide value in a number of markets. Should markets change, companies not dependent on a single market can adapt more easily. For example, while public libraries face competition from mega book stores, their information services and programs for children have continued to be relatively stable areas of service. Also, the business community, students, home gardeners, and many other groups can be served in a variety of ways. Patrons are served with reference and information services as well as popular and practical circulating materials. Preschool children attend reading programs while their parents use materials in the parent-teacher collection, and so on. Another feature of core competencies is that they can be exploited to produce a variety of products. Knowledge of library materials and other information sources supports the

information and youth services function of public libraries. The ability to negotiate informational questions helps librarians assist readers of popular fiction, as well as business people and students, in locating needed reading materials. Core competencies are critical in producing end products. Without a strong knowledge of library materials, librarians could not provide patrons with readers advisory services. Without a classification system and other retrieval tools, patrons would not be able to find appropriate materials. Preschool programs also continue to attract many parents to the library for reading motivation and education programs. Librarians are able to use a special type of "performance reading" to fascinate even three-year-olds. In this sense, it is not any one feature that makes a library capable of producing a valuable service, but the sum of many small parts put together. Many capabilites are common to a variety of products, however, without being a critical part of them. For example, the ability to produce security strips is not essential to the running of a library. On the other hand, a knowledge of books and information sources could be considered fundamental to library services. In this light, the outsourcing of acquisitions systems could be seen as giving away a source of librarian expertise. Core comeptencies must be rare or difficult to imitate. While a bookkeeping system is necessary for any company, it is not rare and might be outsourced without giving up any proprietary advantage. Systems and expertise that are easily copied provide little competitive advantage. If capabilities are not difficult to imitate, barriers to market entry are low and the value proided by the product is low, since something else easily can be substituted. In the past, the informational services of libraries were quite difficult to imitate. However, as patrons are getting better and better at finding their own answers via the Internet, basic library services are facing a threat. Libraries can respond by improving their service so that patrons clearly know when and why they should turn to the library for help with their information needs. In a positive sense, libraries should be able to embrace the concept of core competencies very easily, since they have always defined themselves in broad terms. Rather than identifying with the medium, libraries have preferred to identify with the message. It has not made a difference whether the message was on papyrus, paper, magnetic tape, or silicone. But there is a negative viewpoint. Internal strengths are successful only when they are perceived by the public as valuable. As Barney (1995) explained, "one of the most important responsibilities of strategic managers is to constantly evaluate whether or not their firm's resources and capabilities continue to add value, despite changes in the competitive environment." Attributes such as value and excellence are essential to core competencies. Value separates potential core competencies from actual ones. Excellence is present in the most successful libraries. To the extent that patrons can get the same services elsewhere -- or easily can substitute another type of service -- a library's strategic advantage is low. The imporvement of capabilities and the increase of synergy is the goal of a core competency-based strategy. The pursuit of excellence is related to the idea of quality, as in quality of control andquality circles. However, when striving for excellence, it is important to consider the entire product or service. The goal is not to limit our scope to perfecting current processes. The pursuit of excellence means exceeding patron expectations by meeting needs in new and better ways. For example, in the hotel industry, excellent service does not necessarily start at the door, it may start at the airport, or perhaps even before the guest leaves home. The idea of improvement brings us to the next part of this discssion, the building and improvement of core competencies. Librarians Competencies as Building Blocks What are the characteristics of a librarian and what competencies or capabilities should a librarian possess? Lists and discussions of suggested capabilities have been developed.

Shaughnessy (1992) breaks comptencies down into the three main categories: knowledge, skills, and attitudes. Each category includes attributes such as subject expertise, question negotiation, and service orientation. Lists and discussions of capabilities and competencies are important because they not only make explicit what we should know but also provoke thinking and suggest improvements. When Shaughnessy wrote in 1992, technology was having an increasingly dramatic influence on the field: "The changes that are occurring with respect to information technology are so dramatic and so rapid that many librarians and support staff are truly suffering from future shock." Well, the shock may be over, but the changes are still accelerating. Increasing knowledge and skills and developing higher-quality customer service attitudes enable the librarian to better meet the needs of the organization and to participate effectively in organizational change. But what capabilities should be developed? The concept of core competencies provides a source of answers to that question. As mentioned above, core competencies should be a unifying principle of the organization and should facilitate planning. Because capabilities that are synergetic create greater value, focusing on adding skills and technology that enhance core competencies will produce the greatest improvements. Types of Competence Knowledge, skills, and attitudes are important components of expertise. However when Prahalad and Hamel (1990) define a core comptency as "anarea of specialized expertise that is the result of harmonizing complex streams of technology and work activity," they start with expertise and add that the core competency is "the result of harmonizing technology and work activity." Looking at competence only in terms of expertise would cause one to overlook important components of core competencies. While it may be true that the substance and fabric of our society develop from the mind, there are many dimensions to organizations, and as organizations mature, they generally become more complex. In this complexity, some aspects of knowledge may develop into technology and structure. Looking at the organization in a marketing sense, we can find these elements of technology and structure in a number of areas. The importance of structure should not be minimized. Organizational structure and culture can either stimulate the growth of capabilities while guiding improvement or they can stifle initiative and creativity. Six Examples of Areas to Examine for Library Core Competencies Infrastructure Market-Interface Capabilities Design and Development Analyzing, Explaining, Forecasting Service and Product Organizational Culture Figure 1 Figure 1 provides examples of areas to examine for core competencies. It is not an exhaustive list. Any area that can be created in such a way as to provide the advantages noted in the section above can qualify. Consideration of the first area listed, infrastructure, might include the interlibrary loan

relationships that libraries have developed. In most markets the ability to deliver the widest possible variety of materials in the shortest poasible time would constitute a competitive advantage. Cooperative lending relationships and their supporting technology might well be recognized as a buildling block of competitive advantage. This advantage is difficult to duplicate. It could be argued that the system in today's fastpaced world is not very efficient; however, continual improvements in this are would be a logical development. Why Core Competencies? What are the advantages of developing and improving core comptencies in libraries? Here is a review. 1. Better huamn resource planning. Instead of trying to fit the person to the organization, work from the organization and ask, "What do we need? What would we like?" 2. More effective training programs. Training programs designed to meet future needs are effective. 3. A list of critical technological capabilities. Besides knowing which are our critical capabilites we also know which are not; resources can be spent wisely. 4. An opportunity for a strength-weakening analysis. Answering questions about what we do well and knowing what threats and opportunities we face is critical to planning. 5. Help with outsourcing options. Since organizational functions interact, there may be unintended consequences to outsourcing components of core competencies. For example, outsourcing bookkeeping may be sensible or it may be depriving us of valuable information about our purchased materials. 6. Guidance for development or change. Once a system of core competencies is functioning, it provides a road map for development. Having a list of critical skills allows us to see how we might improve them to our advantage. 7. Vision of the whole organization. The global perspecitve of core comptencies allows us to study what we're really good at. Knowing where we excel allows us to better exploit our advantages. 8. Innovation is required for survival. Core competencies help to identify specific behaviors int he organization that are appropriate to stratey design. Core Competencies by Product Areas Having defined core competencies, we can look at core competencies in terms of the major product areas of public libraries. Major Product Areas of Public Libraries 1. Reference and Information Services 2. Popular and Practical Circulating Materials Collection 3. Children's Reading Programs 4. Educational Support Services List of Library Capabilities For each of the product areas, we can consider the skills most associated with those areas. As said, core comptencies involve clusters of capabilities. Listed below are a number of capabilities common to public libraries. We can consider which of them work

together to create synergy and are critical to producing high quality services. 1. The ability to develop high-quality collections of materials. 2. The ability to catalog and classify materials for effective storage and retrieval. 3. The ability to provide materials from libraries all across America -- made possible by cooperative linkages and alliances between libraries. 4. The ability to maximize the use of mateirals through efficient operations. 5. The ability to provide readers' advisory services for most library subject areas. 6. A knowledge of children's literature and media for both acquisition and readers advisory services. 7. Creativitiy in implementation of children's library programs to provide a stimulating environment and reinforce good reading behaviors. 8. Interviewing and communication skills for information services. 9. Information-related problem solving skills. 10. A superior knowledge of information sources, including the Internet and electronic data bases. 11. Technological components of service delivery, including remote access and realtime interactivity. 12. A strong service orientation with a dedication to quality. 13. Specialized subject expertise that greatly increase the value of the service area. 14. A knowledge of the local school curricula and an understanding of the role of the library in the education process. Core Comptencies Matrix Capabilities Collection Development Skills Cataloging and classification Interlibrary loan systems Operations efficiencies Readers advisory skills Children's literature knowledge Programming skills Programming skills Interviewing-communications skills Information problem-solving skills Knowledge of information sources Information technology Patron service skills Subject specialists Knowledge of curricula Reference Books and Reading Services AV Programs H C C C H H C C C H C C C C C C C C C C C C H H School Support C C H C

C C C C C C

C = crucial to synergism of service; H = helpful to synergism of service Table 1 Table 1 shows how service areas might be analyzed in terms of the lcusters of capabilities that together make excellent service possible. While not every capability is crucial for every service area, that is a lot of overlap. The matrix below show show

clusters might look. For example, the cluster for reference services includes all the items checked by it. The amtrix also shows how some capabilities are used across most or all of the service areas. Finding the Core Competency The capabilities listed in table 1 are not core competencies. Core competencies are identified through analysis of the matrix. It is interesting to note that providing reference and information services requires most of the capabilities listed. It is then reasonable to say that a core competency of libraries is the ability to deliver high-quality information services. Efforts should be made at continual improvement of the service through the refinement of critical capabilities. In addition, efforts should be made to determine other capabilities that can be added to the list, which would make the service even better. Building Core Comptencies Organizations can approach core competencies in either a formal or an informal way. In the informal way, adminstrators develop an understanding of the concept and incorporate it into their management practice. In the formal approach, a broader range of staff is involved in the mutual development and use of the concepts. In either case, in the words of Doz (1997), "once developed, competencies are not communicated and shared easily. Deepening competencies requires ongoing cultivation, and most often growing specialization on the part of individuals and small groups." Which approach is used may depend on the current planning environment. Does the library have a strategic plan? Have teams been developed? Have there been quality control gorups? Is the organization based on a hierarchical model or a flatter management structure? Goldstein (1998) even suggests that organizations can benefit from structuring themselves around core competencies. Below is a list of possible steps which can be adapted for local use. For another look at a development process, see Gallon (1995). Before any core competency process is undertaken, however, an organization should have some form of strategic plan. As with any process of organizational change, success depends on resources, a commitment on the part of upper management, and skilled follow-through. Since core competency programs are a form of strategic management, incorporating their use into the strategic planning process should be considered. The following steps are one possible approach to developing and using core comptencies as part of the strategic planning process. The paragraphs that folow explain each step in detail. 1. Develop an understanding of core comptencies 2. Review the mission of the organization 3. Review the products and services of the organization 4. Review the strategic plan of the organization 5. Develop a list of organizational capabilities by product and service 6. Apply core competency tests to potential competencies 7. Consider options for improvement 8. Determine critical success factors 9. Incorporate core competency development into the strategic plan 10. Incorporate core competency development into the corporate culture

Understanding Core Competencies This article thus far has attempted to explain the use of core competencies. Further reading of the sources listed in the bibliography would help complete the picture. The book Core Comptency Based Strategy (Andrew and Luchs, 1997) may be of particular use. A database search for additional materials could also be done. Review the Mission The mission of the organization should drive all management activites. This is true in a superficial way and also in a deeper, psychological manner. When the organization's mission is really a part of management thinking, it is much more likely that employees will be motivated to achieve the goals of the organization. In a more superficial view, it is simply easier to know which way to go when yoo know where you are going. Products and Services Review Each library is different because each library's service population is unique. Taking an objective look at those services allows librarians to see how the mission of the organization is currently being implemented. Review the Strategic Plan of the Organization Libraries with strategic plans in place already know wehre they are going. This is important. In order to meet the challenges of the twenty-first century, it is important that libraries develop a game plan. As our patrons develop new skills in Internet use and enterprising companies develop new technologies and information delivery products, libraries must keep pace. Our society needs modern libraries and it is really up to lbirarians to provide them. Since the strategic plan targets service improvement and product development, it is easier to develop the core competencies needed to accomplish the plan. Develop a List of Capabilities by Product and Service What do librarians do? How do we do it? What makes it possible to acquire materials? What are the most important knowledge, skills, technologies, and processes that underlie our services? The list above can help. Analyze Clusters of Capabilities See how the knowledge, skills, and abilities relate to each other. Shorten the overall list by defining key areas of expertise. Completing this step can make use of skills librarians have already developed in their cataloging processes. The process might be described as looking at a variety of materials, grouping them, and assigning them subject headings. Develop a List of Potential Core Competencies The next step is to develop a list of potential core competencies. These will be the areas where development and enhancement can add significant value to our services. They are areas where constant improvement produces the greatest value to patrons relative to the mission of the library. They are probably closely connected to the library's general service areas. Apply Core Competency Tests to Potential Competencies Each of the candidate areas can be tested to see if they exhibit the characteristics of core competencies. For example, does the librarian's expert knowledge of subject areas produce products that serve a variety of markets? Does it add value that is difficult to imitate? This is an important step. It can make the difference between outsourcing a

critical capability, thereby weakening the library, and developing improved products appreciated for their value. Consider Options for Improvement This is the most critical step. All other steps are designed to make this step possible. What capabilities can we add to increase synergy? What skills or technologies will provide advantages such that library patrons will be not just satisfied, but delighted and appreciative? Determine Critical Success Factors The implementation of most worthy projects involves overcoming difficulties. My favorite example is the building of the Panama Canal. While there were several problems, two examples will suffice to make the point. The mosquitoes in Panama brought malaria and most workers died or became extremely ill. Also the sides of the canal kept collapsing and it was very difficult to get rid of the dirt that was dug, so work constantly had to be redone. The American engineer who finally made the project happen stopped trying to pour new men into the mix to replace the dying and stopped trying to dig faster to remove the collapsed walls of the canal. Instead, he stopped digging and put efforts into a mosquito extermination program and the building of a railraod beside the canal's path. It was critical to the success of the project that these problems be solved, and until they were attended to, the project struggled with failure. Some examples of Critical Success Facotrs (CSF) in a library might be recruiting dedicated personnel, improving the pay scale, cultivating empathy and cross-cultural sensitivity, or developing foreign language skills. Another everyday exmaple of a CSF is inspiring employees to be cooperative and motivated. You might have to work on some key employees to get their understanding and buy-in. For a more detailed discussion of CSFs see Hardaker and Ward (1987). Incorporate Core Competency Development into the Strategic Plan Once options for improvement are determined, they can be incorporated into the strategic plan. Goals and objectives of the strategic plan should not be just brick and mortar plans. Human resources and technology improvements, which form the basis of core competencies, make everything possible and should take a prominent place in any strategic plan. A computer software consultant business that does not include employee skills and knowledge development in its strategic plan will not be successful. Neither will a library. Incorporate Core Competency Development into the Corporate Culture There is a good deal of research on the concept of the learning organization. Nevis, Dibella, and Gould (1995) write that "this knowledge allows for the development of competencies and incremental or transformational change." Having identified areas of expertise or technologies for core competency development, it remains to implement improvement. Some changes may be dramatic but others must occur slowly in the form of employee training. This requires a focused commitment on the types of training most beneficial to the organization. Conclusion The understanding and use of core competencies by libraries can provide a strategic planning advantage. Developing and sharing these competencies across the organization can create new and better services for patrons. Libraries can also look beyond their walls and service areas and develop stronger knowledge and technology networks with other libraries. The synergy possible through sharing areas of "specialized expertise that is the result of harmonizing complex streams of technology and work acitivity" can be strongly leveraged across geographic boundaries. The result will be the libraries of the twenty-

first century.