How to Create Competencies

Competencies are abilities, knowledge or skills that help individuals or businesses complete tasks and activities in an efficient manner. In a free market system, a successful business produces goods and services efficiently at a low cost, driving competitors out of the market.

Though competencies can come naturally to individuals, companies often need to create an environment that maximizes competencies in operations. The creation of competencies can also rank some workers ahead of others. This ranking ensures that business owners and managers will place higher value on the competencies that will have the greatest impact on the company.

Define the competencies needed to run an organization effectively. These may be knowledge of business, focus on results, customer service, teamwork, communication and leadership.

Hire skilled workers who fit the profile of the company’s competencies. Competencies begin with employees. Skilled workers typically have the education or technical background to succeed in the company’s environment.

Develop specialized production or business methods. For example, many companies can create widgets. However, one company can develop a production process that maximizes the use of materials while limiting waste, resulting in a competency.

Provide customized training and education. Companies often need to train workers, even skilled employees, on how to complete tasks and activities. This will create a work force with a singular focus on how to complete job tasks.

Make changes to competencies to ensure longevity. The business environment is in a constant state of flux. This requires companies to continually refine their processes to maintain competencies.


  • Looking at competitors and competencies they have in their operations can provide a good opportunity for a company to copy these practices and improve its business.


  • Attempting to create too many competencies can result in high expenses on business operations. This will reduce capital and create a difficult operating environment.