Identify the Core Competence: 2 Methods + 3 Key Points On Local Revitalization

Identify the Core Competence: 2 Methods + 3 Key Points On Local Revitalization

Learning & Development monthly

Questions such as "What is core competence of your company?" are often heard in the business gatherings. This is also an important question in policy formation.

Synonyms of "core competence" may be "field of expertise" and "overwhelming strengths" in comparison with other companies. However, even overwhelming strengths may not mean anything if they are not needed in the eyes of the consumers. Therefore, the premise is "something needed by consumers". In the policy making process, the concern is "(the policy) is needed by the target users".

Let me ask you: "What is the core competence of your policy?" How many people can clearly answer this question? If you cannot give a concise answer, perhaps you can interpret the question like this "What is the field of expertise of your policy?".

It may be difficult to survive in the competition among municipalities (at least in getting listed among the "winners") if the core competence (field of expertise) of the municipalities of one’s work or one’s life is not clearly identified. The so-called competition among municipalities means "local municipalities attracting and recruiting residents from other localities by exercising their own characteristics and developing their creative policies."

Identify the Core Competence of the Locality

The engine technology of Honda Motor Co., Ltd. is often cited as a role model of core competence. The miniaturization technology of SONY Co., Ltd. is another famous model. As for municipalities, examples may include Kitakyushu City, an eco-friendly town, Obuse Town (Nagano Prefecture), famous for the landscape design, and Sakaiminato City (Tottori Prefecture), which uses Kitaro Street (Yokai Avenue) to promote tourism. An even earlier example was the Telecom Park in Yokosuka City (Kanagawa Prefecture). The above cases show that the so-called core competence is the "advantage" enjoyed in competition, and it can also be understood as the brand power that facilitates the development of a municipality.

At this stage, if you do not have an instant answer to the question "What is the core competence of your policy", try switching to questions like "What is the field of expertise of your policy?" or “What are the characteristics of your department?” This may be a way to reveal the core competence of the municipalities.

When someone can positively say "this is it!" as the core competence of their municipality, is the answer accompanied by a good explanation? I myself abruptly said "this is it!" sometimes. However, it is often the case that observers clearly see the fact while the main figures are proud of their own creativity. Therefore, it is of utmost importance we clearly identify the core competence.

There are basically two ways to clearly identify the core competence. First, “compare with the past". What continuously grows is likely a manifestation of core competence. In contrast, an aspect that regresses can hardly be called core competence. Therefore, a calm objective comparison with the past, in a qualitative sense, can be an effective way to identify the core competence.

Second, "compare with other municipalities". Results of comparison with other municipalities that manifest advantages can be indication of core competence. However, the "comparison with other municipalities" may sometime still be blurred. This method should be refined as "comparison with the municipalities of the competitors" as a way to review one’s own core competence.

Competitors are easily identified among private enterprises. The differences from the competitors are examined to reveal one’s own core competence, which serves as the driving force for getting ahead in the market competition.

As a matter of fact, many perspectives can be taken by municipalities to identify the competitors. In raising questions, I will take an example from one possible answer, namely "attracting and recruiting residents". A hidden competition among municipalities is that of recruiting residents. Therefore, if the target residents set by the municipalities for recruitment coincide with those of other municipalities (e.g. the child-rearing generation between 30 and 39 years old), the municipalities are competitors.

Municipalities have core competence only if they can make comparison with the past and identify the competitors.

Ways to Learn from Examples

"Learning from examples" is a method worthy of consideration in promoting local revitalization. "Learning from previous examples" is generally of two senses, which are introduced as follows.


I think many people have heard of "benchmarking". In "Japan Quality Award Evaluation Rubrics" of the Japan Quality Award Council, we find the definition: "Benchmarking refers to the learning of an organization, in pursuit of self-improvement, from other organizations in the world (not necessarily in the same industry) that adopt the best methods or processes, and the series of activities it uses to adopt those methods and processes in ways that suit the needs of its own organization for bringing about significant improvement for itself.”

In private enterprises, regardless of industries, benchmarking refers to learning from organizations that adopt advanced and superb practices and introducing the know-how and management methods into its own for the pursuit of improved performance.

Benchmarking can be used in the policy-making process. For example, City A wants to reduce the amount of garbage generated, and City B, which is about the same size and which has already had good performance in reducing general waste, can be taken as the benchmark. For City A, City B is a good example to learn from.

After making comparison with City B, City A finds its waste generated is 1.5 times that of City B. To reduce the amount of general waste generated, City A then explores and learns from the measures adopted by City B. This series of learning is benchmarking.

Related to benchmarking, "benchmark" is a term often mentioned. Benchmarks are “(1) indicators used to compare and evaluate the return of investment products and the rate of change of a specific stock, (2) methods for improving one’s own business and management based on the advantages of other companies.” The focus is on the "rubrics" or "benchmarks", in other words, those used for comparison with other companies (or municipalities).

In the above example, the focus of the benchmarking is not just to regard City B as a "case of reference", but a model of learning for City A. For instance, a goal can be set "to reduce the amount of waste generated per person per day to 900 grams.”

2.Best Practice

Related to benchmarking is the concept of "best practice," which means "certain efficient techniques, methods, processes, mechanisms, and activities, etc., that ensure certain degrees of production or management performance". By this definition alone, "best practice" is not different from benchmarking. Best practice is also referred to as "best cases" or "best habits". A basic capability of an organization in policy making is to identify the best practices (best habits) desired in the effort of local revitalization and to consider the feasibility of transfer from the models.

Therefore, other companies that are considered models can be referred to as cases of "best practice", and the efforts to learn from their business practices is "benchmarking". "Benchmarks" are set in cases of "best practice", upon the completion of which, activities to achieve the goal can begin.

Importance of Learning from Failures

Not all previous cases are good examples to follow. Negative examples can still serve as cases to learn from. The negative examples refer to "materials that can be used as cases to reflect on or be vigilant about". In policy making, special care should be taken not to repeat the failures of other municipalities.

As the saying goes, "History repeats itself". This seems to be true, but not exactly so. History does not repeat itself in the same way, but those who do not learn from history "repeat the same history".

Therefore, cases of failure should be collected and studied as much as possible, just like successful cases, with the question asked, "how come they failed?" If cases of failure are not collected and reviewed, an organization ends up making the same mistakes as other municipalities. One of the priorities for local revitalization is to never repeat the mistakes made by others.

In development economics, there is "Alexander Gerschenkron Hypothesis", which is also known as the "later entrants’ competitive advantage hypothesis".

"Alexander Gerschenkron hypothesis" refers to the condition in which “developing countries introduce new technologies from developed countries on the one hand and promote industrialization on the other, so that the process of industrialization is shortened and the economic growth rate is higher than that of the developed countries.” In other words, developing countries can expect to easily realize high economic growth in a short period of time by referring the examples of advanced countries (such as Japan or South Korea).

It is generally believed that developing countries, by avoiding the experience of failures of some advanced countries and only learning from the successful experience, can achieve more rapid economic growth. It took Japan 30 years to develop its economy after the second world war, but less than 20 years for Korea and Taiwan to do so. Mainland China achieved similar economic growth at an even higher pace.

"Alexander Gerschenkron Hypothesis" can also be our inspiration in terms of local revitalization. In other words, the emerging municipalities which just start formulating their policies can learn from previous examples to get on the right track much more quickly and smoothly.

There is no doubt that "it is more efficient to refer to good examples", but it does not mean "to imitate the cases step by step". There is no point in making exact copies.

Reference should be made to multiple good examples in policy making. Ideally, (1) common points from different cases should be extracted and generalized for proper application in the municipalities, and (2) good points from the successful cases should be linked to form new policies.

The linking and consolidation of the strengths of multiple cases might be called “consolidated policy making”. The consolidation means "combining two (or more) heterogeneous elements to form a single-purpose subject."

In referring to good examples, there is no good example that can be followed "as is" as the situations of municipalities are necessarily different. The important point is to gradually implement the knowledge and experience gained from those good examples. Furthermore, following good examples "as is" means nothing but copying, with no chance of surpassing and innovation. This is something to be made clearly aware of.

Citizen Marathon to Boost Popularity

Various sports events are held in places all over the country, as part of the effort to boost "local revitalization". Among them, more than 200 marathons are held every year across the country, which is twice the number in 2000 since the first Tokyo Marathon in 2007. In these events, people enjoy the unordinary feeling of road running in the metropolis and taste the local food products. The municipalities incorporate their own characteristics in the marathon, which greatly contributes to the increase of tourism revenue and popularity.

Since then, the ad hoc type of Marathon was integrated as an essential part of people's way of life. There is an increasing number of participants who carefully select the events they participate through websites or word-of-mouth, and also those who pursue the value of experience in addition to just running.

Therefore, there is a new challenge future marathon events must face. That is how to deal with the high information literacy of the participants (the competence to accomplish personal purposes using information knowhow and skills for the searching, evaluation, analysis, and production of information) and their diverse needs. This is essential to make the marathons events something the participants do feel the desire to participate.

For this purpose, the participation of local residents is essential. The local residents with the ancient legacy of "local assets and pride" pass the local charms to the contestants. Mimpaku (that is, homestay living in ordinary homes, not B&Bs, hostels, or hotels) and rural experiences are offered to meet people's needs for local exchange and eco-tourism. The contestants are moved by the hospitality of the local residents. The new values ​​and sense of commonness people receive through the marathon events will remain in their memories, making local events something that runners love to participate.

We can see the warm participation of local residents in the organization of the Tour de France, the world's largest cycling competition. Each year, more than 250 towns bid to serve as the start and finish points in 34 districts. It is not just for increased tourism revenues, but the chance to pass the information of the resources and culture and urban landscapes of each place to audiences all over the world. During the game, cyclists pass through more than 500 towns, where the locals prepare various cheering activities to convey the charm of their towns. In this competition, we can see how people make use of their local legacy and work together for the local revitalization.

Through the sponsorship of various municipalities in hosting events that people have the incentives to devote to, many events can develop into historic and seasonal festivals like some traditional Japanese festivals to enjoy lasting popularity. The promotion of "local revitalization" through the citizens' marathon not only spreads messages to outsiders, but also enhances the sense of subjectivity of the local residents, so that they enjoy more richness in mind.

Three Key Points to Notice

The cases of “Best Practice” are good examples to follow. In contrast, negative cases are taken as something "not to learn from". The cases of failure are not to learn from, but to review the reasons so they would not be repeated. For some reasons, however, municipalities have a tendency to learn from all cases, including those of failure. My feeling is that they learn more from negative examples than from good ones. Here are some points to notice in dealing with previous cases:

Note 1: Previous cases are not always successful cases

Some may think that "Previous cases are always successful cases", which is not true. Previous cases simply mean "cases that occurred a bit ahead of others."

Such a statement may be not precisely true, but many previous cases are simply "cases that occurred a bit ahead of others." Some of them may not have been well planned for, but have simply been put into practice a bit ahead of others. They still may be cases of failure, even if they occurred earlier. Therefore, all previous cases should be examined and reviewed objectively and in-depth to ensure they are of good reference.

Note 2: The more common points, the more likelihood for transfer

A key consideration for best practice is to collect multiple cases for study, not just one single success story. There must be some common factors found in multiple cases. The point is therefore on deriving some commonalities from multiple cases. In general, common points are more likely to replicate and can be more regularized.

This regularization effort is the process of induction. Scientific rules can be established through induction. The common points are the points easy for transfer even within the municipalities themselves.

It also takes calm judgement to decide if the common points found through the successful cases are likely to be transferred to one’s own municipalities. And if transfer is not immediately possible, it pays to consider the conditions under which the common points can function well in playing a role in one’s own municipalities.

There are three key points of following the good examples. (1) To review multiple cases, not a single one. Often municipalities refer only to a single case particularly well-known. This is not the way to do it. It is important to collect multiple cases and draw common grounds to find the path to success.

(2) The rationale for selecting the previous cases must first be clarified. A municipality with a population of 100,000 will not benefit by referring to the practice of Yokohama. Even with the wide variation in population size, the duties and functions may be the same. Therefore, the rationale for the selection of the previous cases must be clarified.

(3) The feasibility of transfer should be examined on the basis of previous cases. When transfer is found difficult, the cases should not be given up immediately. The question to think about is "what conditions must be met for successful transfer?".

Note 3: Competency

Though it may be a bit superfluous, I would like to briefly introduce the concept of competency. This term occurs in the field of HR policy, meaning "the behavioral characteristics that can be observed among people who have sustained and stable output performance at a certain post or operation". Therefore, it is also known as the "behavior characteristics of high performers".

The concept of competency has almost the same meaning as the “common points” in the aforementioned principle that "the common points induced from multiple successful cases are of high likelihood for replication".

In recent years, more and more municipalities have conducted personnel performance review through competency evaluation. However, if used improperly, employees may tend to adopt behavioral characteristics of high performers. This may lead to the result of homogeneity of talents. The homogeneity of talents may lead to the homogeneity of the organization, and consequently to the decline of the overall performance of the organization.

Some municipalities hope to recruit "personnel with special diverse talents". However, the effort of recruitment can be a failure eventually if the personnel with special diverse talents recruited end up in homogeneity due to the competency evaluation system. Talents of homogeneity can be recruited with the trait of characteristics in consideration if homogeneity is the ideal of the organization.