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, written by Jeremy. Read the commentary.

core competencies, value creation, innovation, strategy, entrepreneurism

The few core competencies that matter

Of all you do, what creates the most value?

Of the value you create, how much comes from core competencies (the things you do best)?

It’s come as a surprise, but reality is: Only a few of the things I do actually create value.

The role of deliberate practice

In The Role of Deliberate Practice in the Acquisition of Expert Performance (1993), psychologists K. Ericcson, R. Krampe and C. Tesch-Romer give evidence to support the long-held belief that excellence is a product of effort across time. It takes ten years, say Ericsson et al, to become expert in anything. It’s the consistency, not talent, that matters most. “Experts”, they write, “grow to acquire cognitive skills enabling them to circumvent limits … From our search for immutable characteristics corresponding to innate talent, we conclude that individuals acquire virtually all of the distinguishing characteristics of expert performers through deliberate practice … In summary, our review has no support for fixed innate characteristics that correspond to general or specific natural ability …”.

So, off we go. Confident in the faith that hard-work and deliberate practice will make us experts – we plow ten years into a set of core capacities. Finally, we pop out 3,650 days, an expert.

But here’s the hitch: While the path to expert is clear, the most valuable areas of expertise are not. Being an expert is one thing. Being an expert of value – that’s a whole other deal.

The essence of excellence

We love professional athletes, rockstars, moviestars, and brilliant CEOs (at least we used to). We thrill in the fantasy that their success is somehow mirrored in our potential. But it’s only a few that grasp the reality of the hard work required to generate that success.

The greatest athletes have a lot to teach us about value creation. In the Mundanity of Excellence, researcher Daniel Chambliss writes, “The mundanity of excellence is typically unrecognized … the reason is fairly simple. Usually we see great athletes only after they become great – after the years of learning the new methods and gaining the habits of competitiveness and consistency … They have long since perfected the myriad of techniques that together constitute excellence.”

Chambliss concludes that 1) excellence (consistent superiority of performance) is a qualitative phenomena where top performers focus on qualitative, not quantitative improvements, 2) Talent is a useless concept masking the reality that concrete actions create outstanding performance, and 3) Excellence is mundane and accomplished through ordinary actions, performed consistently and carefully, compounded together, and added up over time.

Choosing focus

Growing up, sport was a big deal. Hockey and basketball were mainstays.

To be good in hockey there are no capacities more essential than skating, passing and shooting. If you want to practice for maximum payoff: do lots of figure-eights (backwards and forwards), pass and receive passes all along those figure-eights, and take a ton of wrist-shots. Slap-shots, skating round and round the rink, and coasting around in scrimmage games won’t yield a hundredth of what is gained by practicing these top three simple skills.

Similarly, in basketball, focus on simple dribbling, passing, lay-ups and short jump-shots. An important addition might be free-throws if you’re big and liable to get fouled a lot. Dunking, nifty mid-court moves, and long-bomb shots are a waste of time for most players.

Skating, passing and shooting are the money-makers of hockey. Dribbling, passing and short-shorts are the nickels and dimes of basketball. Your drive and put are where to make gains in gold … on and on through sport after sport. The path to value is clear.

In sport it’s easy to pick important methods to creating value. Practice this few things, over and over again and in ten years (with the assurance of Ericcson et al.) you’ll be pro or at least pro-grade. It’s not so clear, unfortunately, in business.

Identifying the core capacities that create value in business seems much more difficult. For evidence of this challenge, simply observe the wide, wandering path of most corporations. It’s clear that many aren’t sure what creates value. They’re guessing.

Beyond guessing

Identifying value-generating core capacities is difficult, humbling, and, yes, mundane.

First, it’s impossible to find what counts without first detailing what you do and what it achieves. Banal? Maybe. But metrics are critical.

Track where you make efforts. Track where you gain success. Weigh time and expense against sales volume and revenue. Few small to mid-size companies actually have a grip on this kind of information.

Second, learn what is being bought.

Very few of our clients know what is truly valued of all they do. Most know what they want to be valuable. Most know what they try to sell. But hardly any know what is really being bought.

In an interview on the role of industrial design plays in business strategy, Gad Shanaan describes the surprisingly simple elements that drive new product success. In a high-tech world, it’s often low-tech differences that make the sale. He says that most of his clients can’t see the value because they’re too close to their industry.

Sometimes it’s a company’s culture that makes sales (versus the glitzy new design). Sometimes it’s buttons on the front of the TV instead of the side. Simple things create value in ways most would never imagine. And, paradoxically, many of the things we think matter most make no difference at all.

Shanaan explains that the best path to knowing these things is to come with fresh eyes, a new perspective, and a willingness to research areas that most take for granted. Doing the analytical work creates the insights. Doing the simple and often mundane thing creates the value.

Third, ask those that buy what else they want.

The most common forms of business planning are baffling. Executives sit in boardrooms, years away from their most practical experiences, trying to plan for a deeply uncertain future. Entrepreneurs beat their heads pulpy on walls, trying to guess where markets are going. And both, eventually, sit down to write a document that supposedly shapes their undelivered response to the dynamic future alternatives they mysteriously chose to consider.

An alternative path, and one I love to advocate, is writing a preliminary business plan. A mere skeleton of the monster that most produce. After framing your capacities, listing a few new concepts and briefly summarizing the market – take that three to eight page document to partners, suppliers, and clients. Show up reasonably dressed, vastly at ease and ask in a natural voice (with a hint of inquisitive):

A. “What is missing?”
B. “Can you see yourself in this?”
C. “What do you need next?”

You’ll be amazed at the answers. You’ll be stunned by their willingness to put themselves inside your work. You’ll be thrilled by their early commitment to their fingerprints on your skeletal plan.

But, be warned, almost none of it will be exciting. Sustainable things are built on patience and trust. Most of what’s fast and fun dies quickly.

A simple and mundane process. It yields simple and mundane answers. But the beauty is: You will know far more about the few things you need to practice right now to get more sales.

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[…] knowledge in new ways. This knowledge is, of course, held inside businesses and institutions. It’s the holders who reach out of and through that knowledge to create new combinations. In this sense innovation is an internally-driven […]