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Competence and Portfolio
Written by PILLWAX Industrial Solutions Consulting   
Monday, August 24 2009 11:04
Michael Pillwax - Owner & Senior Consultant

From view of the Systems Theory, a organizations competence is the competence of the social system of the organization. As social systems require living entities, in a organization we as the humans are the contributors to the overall competence of the organization. Emergence is a quality of systems, where the sum of its parts is something different than the parts itself. Organizational competence thus is no straight equation from adding the single competences of the humans working in it.

The structure of the system has determining factor on the competence of the whole, and a equally decisive one as the for the single parts of it. Think about a watch: For it to continuosly calcuate a value of time, amounts of single parts have been arranged in such a organized way that the watch is actually capable of doing what it does. Change one part, or just change one arrangement, and the watch might start to get inaccurate or non-functional at all.

In Management of some organization, it's Product or Service Portfolio is often used for defining products and services. To build upon the Marketing Communication, Sales Arguments and even Organizational Charts. If it actually does fit to the competence the Organization actually does have, well that may just be a possibility.

Companies actually may be totally good in something completely different than its Product or Service Portfolio is describing. Making observation of this is a task of comparing the Portfolio with the actually sold Products or performed Services of this company. Having a congruent Company, we would be able to observe that our understanding of their Portfolio and our experience of their Product or their Service are fitting together. Any incongruent Company would then present itself with a mismatch to us between our understanding of the Portfolio and the experience of their Product or Service.

Now by creating this difference between the Portfolio and our understanding, and the experience to the Product and Service we now make areas visible where we will get able to create change to recreate congruence.

One is the Portfolio, and the understanding of it. Incongruence may already start here in form of the Communication of the Portfolio. Understanding is highly individual and as communicator we have it in hand to transport the message in a way that our content and the understood content have a high level of congruence. We have it also in hand what experience our clients will have of our Product and Service. In their "world" they are making this comparison and on their scale our product or service does fit or not. And if not, our product or service is just not what they have ordered.

What becomes visible now, is that we have a lot in hand. As a company or organization, its competence as a whole may be or may not be as advertised. And any client or customer will only then be able to make this call after the product or service has been carried out. Industrial Companies use the tool of "Performance Guarantees" often to create a common scale on which a supplier of a Process Technology and the Buyer come to a tool of comparison for the Plant, Machine or Technology that is purchased and installed.

Such tool is one milestone for a organization to see if they are actually good in what their portfolio offers. Or if this company should start to offer something different, some Product or Service that is congruent to their own competence.

As a company grows and evolves, employees and managers come and leave, the Portfolio established yesterday may not be in line with the competence of the organization today. Or may not be for the future of tomorrow. Organizations do learn. One may have learned how to best ignore developments, or they may have learned to quickly adapt to it. In a traditional management approach, one may see it after the fact once the targeted sales figures for the portfolio do not match the actual turnover in a view of the year behind.

Such past oriented approaches may result in loosing valuable time required for adaptation to changing economical environments. Concepts of a "Learning Organization" have tools available that allow to steer the development of competences in a organization. Allowing to keep or develop congruence between the companies portfolio and where it actually is very good at.

 

 

 

 

The significant problems we face cannot be solved at the same level of thinking we where at when we created them.

Albert Einstein
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