1. Metric Definition
The strength of Core Technical Competencies as characterized using the categories described in the “Third Generation R&D” Tutorial (Arthur D. Little, Inc., April 1994) for either single competencies or groups of competencies.
The understanding, definition, and maintenance of strategic core technical competencies are a key to both current and future R&D performance. The strength of core technical competencies may be characterized using the categories described in the Third Generation R&D, IRI Tutorial
a. Scoring of Core Technical Competencies
The metric is defined by first establishing the core competencies of the firm in the business segment(s) of interest and then rating the specific competitive position in each core technical competency.
Score Level Definition
5 Dominant: Sets the pace and direction of technological development and recognized for such in industry to express independent technical actions and set new directions
3 Favorable: Able to sustain technological competitiveness in general and/or leadership in technical niches Unable to set independent course. Continually in catch-up mode
1 Weak: Unable to sustain quality of technical output vs. competitors. Short-term firefighting.
b. Aggregate Rating of Core Technical Competencies.
To obtain an aggregate for the firm or business segment(s), these scores may be averaged over all the competencies defined.
2. Advantages and Limitations
The first advantage of such a metric is that it is considered at all. Use of the metric forces agreement within the firm on core technical competencies, and the competitive position in each. Understanding and acceptance can drive programs to maintain competencies or to remedy deficiencies. The process of applying the metric provides a healthy dialogue among the commercial and technical functions.
3. How to use the Metric
To rate the position of the firm with respect to each core technical competency and to develop an aggregate rating of the firm over several competencies, it is first necessary to discern those technical competencies which are essential or most important to the success of a firm in selected markets or arenas of business. The prime references on core competencies from HBR and other current references in the field are recommended. There must be agreement between technology and commercial functions on these core technical competencies, whether or not the firm has an advantaged position in any of them.
4. Options & Variations
For some industries and competencies, it may be possible to define an objective metric having to do with competitive technical performance, such as lead time relative to competitors on major innovations; or position along the curve of improving product performance relative to competitors (e.g. 20 percent or better).
5. Champions and Contacts
Arthur D. Little, Inc., Third Generation R&D, IRI Tutorial, April 29, 1994.
Prahalad, C. K. and Gary Hamel. 1990. Core Competence of the Corporation. Harvard Business Review, May-June.