Understanding the core competences of your staff is important to ensure your business has the capacity to remain flexible in the face of external changes, such as digital disruption and economic factors.
It’s an important consideration given that the relatively short timeframes in which change is occurring can prevent your team developing or honing the necessary skills.
Where to start?
Past performance is a good indicator of future performance – so think about what has worked or failed for you in the past? Focus on what you did well but don’t ignore the failures.
An integral link to past performance is looking at the expertise of the team as well as the qualifications of each team member:
- What expertise has been gained within the team?
- Individually and as a team, what has been done really well, what has it not been good at and where does it lack experience?
- What are the qualifications of team members and what qualifications have they acquired?
“Using the answers to these questions, you then undertake a brutally honest assessment of your internal capabilities and your past performance,” says Bryan Hughes, Chairman of full-service accounting firm Pitcher Partners Perth.
“It should be recent or relevant past performance – you need to be careful going back too far because of changes in the external environment.
“Then you need to project that forward and say, ‘Does this meet the market that I’m currently trading in?’ Because you have to be flexible with the changing environment – and it’s changing in so many different ways and so often.”
Sometimes the environment will offer opportunities for your business. And sometimes opportunities in the market place for key areas of your offering may start drying up.
“It doesn't matter if you’re the best builder in the world, if nobody wants a house built, then you don’t have a business,” says Hughes.
You not only have to ensure your offering is contemporary, but also the way you’re offering, it needs to be contemporary.
How often to review?
To some extent, it depends on which sector your business is servicing. If you’re in the technology or retail sectors, for example, you need to constantly review your situation because of the persistent change.
Hughes suggests that in more stable sectors, businesses can undertake an initial annual operational review and thereafter short regular assessments rather than a full review to keep the focus on track.
New business streams
You really need to do your homework if you pursue new opportunities. “You don’t want to find you've strayed a long way off what you actually do and find you don’t have the competencies,” says Hughes.
“For example, if you’re in one form of a logistics business and you see an opportunity to move into a mining contracting logistics space, you might automatically think you have the core competencies to do that.
“However, there may be a whole range of other issues you haven’t taken into account and find that it’s not the same business you thought it was.”
Setting aside time
When you start a new business, you’re juggling so many balls. You’re everything – marketing manager, HR manager, stock control manager.
So finding the time to take a helicopter view of the environment you’re working in and identifying risks is a not a priority for most small to medium businesses.
But even when time is most precious, you need to build in the time to stop and think about the business without any distractions.
