The Keystone of Value
Core expertise is the keystone of organizational value and by extension the reputational brand. Thus, core expertise is the prime mover of the brand system.
Every enterprise organized for a productive purpose is founded on some form of core expertise. That expertise ultimately synthesizes as the brand’s value proposition, around which everything about the organization arranges, including culture, strategic priorities, and operational imperatives.
That said, core expertise is not always self-evident. It’s tempting to say an organization is based on engineering knowhow, manufacturing prowess, technological proficiency, or some similar broad area of competence. While these pronouncements may be true, they don’t articulate a value proposition or the basis for differentiated brand position.
No, we must go a layer deeper to find what core expertise translates to within any given organization. And typically that takes the form of a unique, exceptional, or high-barrier capability that’s honed and refined as differentiated commercial value through operational fluency. As mentioned elsewhere, Herc Rentals’ core expertise isn’t equipment rental (i.e., its business description), but rather Fleet Life-Cycle Management and Logistics.
From there, its differentiated value proposition is revealed through an organizational system that leverages its core expertise. That value proposition is articulated as “Equipment Rental Solved. Easily, Expertly, Efficiently.” (or, in short form, Easy, Expert, Efficient). This value proposition depends heavily on operational fluency, the sort of daily choreography inherent in “fleet life-cycle management and logistics.” In fact, the name of the business’ nascent operating system, “E3OS,” borrows from the value proposition for its name (the three “E”s).
So, if core expertise is the main gear of the organization’s brand system, it makes sense to focus time and effort on ensuring its continued health, especially for any growth plans. These questions are worth asking from time to time:
How pervasive is our fundamental expertise within our organization? Are we truly scaled to create value over the long term? Are the most vital elements of institutional knowledge routinely and systematically disseminated (through training, mentoring, stretch assignments, etc.)? The organization’s value proposition implies that what’s considered to be essential expertise will always be prevalent and permeating, no matter the prevailing organizational circumstances.
Does our expertise translate to a range of growth opportunities? Can we continue to grow through the current way our business creates value? Are potential new customers or markets likely to recognize and seek the value we currently offer, or will we need to adapt by seeking alternative or additional sources of organizational value (i.e., expertise).
Does our expertise still reflect unique, exceptional, and high-barrier capabilities? How will we avoid commodification? How do we plan to perpetually out-value our competition? Will our value proposition lend itself to market and brand leadership for the foreseeable planning horizon?
As suggested by these questions, any dilution of core expertise will affect the organization’s ability to support its value proposition. That said, organizations may have to reinvent themselves in response to changes in customer preferences, market opportunities, or economic conditions. Whatever way they respond, core expertise will be the necessary keystone for however the value proposition evolves.