What is a Core Competency?

A Core Competency is the combination of knowledge, skills and their application that is vital to the success of an organization.  It can be defined at the organization level (Hamel & Prahalad) and/or at the individual level.

Examples include

• Apple’s ability to design, market and produce user friendly devices with visual and tactile appeal.
• Singapore Airline’s customer centric service bundling of aircraft comfort, quality in-flight service, attentive crew.
• Avon cosmetics direct sales process
• Hubspot’s inbound marketing system

Identifying the core competencies of your organization is a fundamental step in strategic management.   Once identified you can move on to identify the mix of specific core, leadership and technical competencies  that the workforce will need to deliver on this.

The concept of “Core Competency” comes from management professors Gary Hamel & C.K. Prahalad.  They introduced the idea in their 1990 article for the Harvard Business Review – “The Core Competence of the Organisation.”  They wrote:

A company’s competitiveness derives from its core competencies and core products (the tangible results of core competencies).                                      

Core competence is the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies                                                                                                            

… core competencies, … meet these three requirements: they provide potential access to a wide variety of markets, make a contribution to the customer benefits of the product, and are difficult for competitors to imitate.

Core competencies are cross role capabilities that communicate how work should be done across your organization (e.g., communication, teamwork, ethics, customer focus). Unlike technical competencies, core competencies can apply to everyone, or to groups of staff.  Each one should include a short definition and observable, measurable indicators. You can start simple or have different competency standards statements for different levels of seniority.

From the Organizational Psychology literature comes the concept of Organizational Citizenship Behaviour. Behaviour that goes beyond the requirements of an individual’s job description – sometimes termed “extra-role’ behaviours.

“performance that supports the social and psychological environment in which task performance takes place”  (Organ, D. W. (1997). Organizational citizenship behavior: It’s construct clean-up time. Human Performance, 10, p. 95).

Purpose: express how we work together; anchor culture and ethics across every role.

In its annual Future of Jobs report, the World Economic lists core competencies that respondents to its survey have identified.  In 2025 this is much the same as in the previous few years

• Analytical Thinking
• Resilience
• Flexibility
• Agility
• Leadership
• Social influence
• Creative thinking
• Lifelong Learning

Most agree that now Digital Literacy is also a core competency.

Purpose: enable people to perform in changing contexts, tools, and operating models.

Distinct assessment methods: Values → best in performance management alongside goals. Core Competencies → best in your developmental  competency assessments.

No double counting: Culture behaviors shouldn’t compete with role skills in the same assessment; they inform how results are achieved.

Different governance: Culture items change slowly; core competency sets evolve more quickly with technology and strategy.

Manage both vales based competencies and the future of work core competencies with the central competency library and mapping facility. 

Values based or citizenship competencies are used to communicate expectations.  The behaviours required to deliver on the organization’s  Mission and Values – for example “Empathy” in Health and Social Service organizations.

The behavioral competencies that enable people to work effectively as part of a team.

To emphasize their importance they are part of the performance management system.   Since they are unlikely to be measured objectively it is better to provide for qualitative (comments) rather than quantitative feedback (ratings) per competency, with just an overall rating.

The list you choose from will include Values or behavior based competencies such as:

• Interpersonal skills
• Team work
• Building Relationships
• Collaboration
• Service
• Business Acumen
• Supporting the Organization
• Leadership
• Developing People
• Diversity/Cultural Competency

Choose 3-5 competencies that reflect the culture you want to shape,  develop a maximum of 4 short descriptive statements for each. Validate with managers and a small employee panel.

Start from strategy or your organizational core competence if you have defined one.

Pick up to 6 core competencies that will definitely make a difference across job families.

Create a number of indicators for each – you can start simple or define different standards statements for different levels of seniority. Preferably a maximum of 6 statements per level per competency.

Validate with managers and subject matter experts.

Map these core competencies to job roles – just the most relevant ones per role.

The list you choose from will typically include cognitively based competencies such as;

• Digital Literacy
• Thinking Skills of various types – e.g. Critical thinking, Systems thinking, Mathematical, Analytics
• Problem solving
• Decision Making
• Innovation and Creativity
• Learning Agility

and more advanced communication skills such as Influencing.