Innovation doesn’t happen by accident. The very best innovators, like Bill Gates, Steve Jobs, and Michael Dell, have followed systematic processes to improve their own creative thinking and to enhance their corporate sustainability. That is, understanding their core competencies. Core capabilities are considered to be fundamental to the business if they strategically differentiate a firm against its competitors (1).
What made Microsoft, Apple, and Dell successful? A clear understanding of their strategic competencies led these firms to concentrate on specific technologies with delivery to clearly defined markets with a value that allowed them an advantage over any other existing competitor.
While the path to success is never easy, the systematic process itself is simple. By identifying your organization’s strategic core competencies, you can focus on more efficient New Product Development (NPD) for a motivated customer base (2). An effective innovation strategy starts from what the company is good at, not from what it would like to be good at. Innovation revitalizes the core strengths of the business (3). Five steps to identify your core capabilities are:
- Articulating the Passion (or Mission),
- Observing and Connecting,
- Assessing Technology,
- Utilizing Unique Business Processes, and
- Executing with Superiority.
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References
1. Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development . Leonard-Barton, Dorothy. Summer 1992, Strategic Management Journal, Vol. 13, pp. 111-125.
2. Special Report: Strategy Classics. Eisenhardt, Kathleen, et al. Autumn 2008, Business Strategy Review, pp. 51-91.
3. Lafley, A.G. and Charan, Ram. The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation. NY : Random House, 2008.
Image of Gates, Jobs, and Dell courtesy of webpronews.
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