3.3.1 What are Core Skills, Knowledge and Knowledge Management

Core skills or core competencies are defined as systematically focused combinations of individual technologies and production skills that support a multitude of product lines of a company. In other definitions the whole value chain is included. A synthesis of both definitions would lead to following statement
Core skills are integrated through organizational learning processes and are coordinated collectivity through the use of technologies, know-how, processes and attitude,

  • that are of value for the customer,
  • that are unique compared to your competitors,
  • that are difficult to imitate,
  • and that have the potential to give you access to a multitude of markets.
     

Therefore core competences are the bundled skills, technologies and processes, which keep the value creation mechanism running and which are responsible for positioning your company among the leading companies. Sustainable competitive advantages can be obtained, if a company´s skills fulfill the following four criteria:

  • The skills have to be valuable. The skills have to increase the efficiency and effectiveness of the company and lead to improved market performance.
  • The skills have to be rare, because if your competitors also have the same skills, it is impossible to differentiate between them.
  • They must be hard to imitate/ copy. If a competitor succeeds in recreating a similar resource, he can destroy the advantage of your company. In many industries it is hard to protect your products and applications for a long time, since your competitors are able to eliminate your advantages within a few months.
  • It has to be hard to substitute them. If a competitor is able to offer an alternative to your capabilities, your competitive advantage will be eliminated.

Today, organisations are beginning to recognize that ?in order to remain at the forefront and maintain a competitive edge, organisations must have a good capacity to retain, develop, organise, and utilise their employee competencies (GroÈnhaug and Nordhaug, 1992)?. (Martensson 2000) 

Essentially, "Kowledge Management (KM) is about creating, identifying, capturing and sharing knowledge. It is about getting the right knowledge, in the right place, at the right time, particularly in influencing an action or a decision." (Servin 2005) According to the Gartner Group "KM promotes an integrated approach to identifying, capturing, retrieving, sharing and evaluating an enterprise´s information assets. These information assets may include databases, documents, policies and procedures, as well as the un-captured tacit expertise and experience stored in individual workers´ heads." (Hicks et al. 2006)
In addition, although information is not knowledge, it is an important aspect of knowledge. As shown in the following figure, knowledge goes through several transformations where data is transformed into information, and information is transformed into knowledge. (Hicks et al. 2006)