Core Competency

Core Competency

In a recent HVAC Service Roundtable Digest, a young struggling contractor, just a couple years into being in business, was asking for some sage advice on running his business. Good questions regarding finances, pay, hiring and firing practices, etc., that we all deal with every day. I applaud this young man for two reasons. First, for reaching out to the HVAC community for advice and mentoring from others. Secondly, readily admitting that his skill set is limited when it comes to running a profitable business. In his post, he mentions, “I’m not sure of the whole financial aspect of this or any business. I was just a tech that wanted a business.” He knows his core competency as a technician and admits he needs help on the business aspects of running successfully. That’s the first step in recovery for a struggling business, admitting that you have a problem, knowing your core competency, and seeking help in the aspects of your business that you are struggling with.

I can empathize with him as I had these same struggles and questions when I first started my IAQ training and sales business in 1990. To help me with the “business” side of my business, I was fortunate enough to have had a business partner that I could trust with handling the day-to-day business operations while I focused on the technology, training, and sales. We tend to handle these situations based on our experience and core competencies. How can we in the contractor service industries use the concept of core competency to help sustain and grow our businesses?

In 1990, C. K. Pralard and Gary Hamel wrote an article titled “The Core Competence of the Corporation”. In this article, they illustrated that core competencies lead to the development of core products, which can further be used to build many other products for end-users. Core competencies are developed through the process of continuous improvements over time, rather than happening in a single large change. This article addressed how to succeed in an emerging global market, and how it is more important to build core competencies before vertically integrating other markets. (Stick with me here.)  

Pralard and Hamel introduced the concept of core competency as a management theory. It can be defined as “a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace” and therefore are the foundation of companies’ competitiveness.   

Honda is a perfect example. Their core competency is making engines, and they have applied it very successfully to several markets. These include Honda and Acura brand automobiles, Honda power sports products, including motorcycles, scooters, all-terrain vehicles, and Honda power equipment products, including lawnmowers, tillers, string trimmers, generators, small-displacement general-purpose engines, and marine outboard engines.

I realize that contractors are not manufacturers, nor are they looking into global markets since most stick with their local market. Some are regional or even national, yet this concept of core competency applies to us as well. We can still take the strategies in Pralard and Hamel’s management theory and apply it to our businesses.  

First, know your skills and limitations. 

As our young contractor acknowledged, he knows the technical side but is struggling to make money on the business side. His core competency is technical and is much needed in our industry. Yet, we are running businesses and that takes another skill set. Not that he can’t learn the business side, but he may go out of business doing so since there is always a sense of urgency in running it day to day, knowing your numbers, and making corrections along the way in real-time. Seek advice, counseling, outsourcing, or partner with a trustworthy mentor on the business side. Research best practice groups in your industry that can be very helpful here as well if you implement what they teach. Easier said than done, yet critical to a business’s success.  

Second, once you get the business basics down(or handled), you may look at expanding into other related vertical markets, which is another core competency. Meaning if you are an expert HVAC technician, it does not make you a good plumber or an electrician. And in most cases, there are licensing requirements to abide by, so you will be forced to seek out and partner with someone whose core competency is in the vertical market that you want to tackle next. The same business skills will apply to these industries, and each vertical market has its own set of key performance indicators to measure and hold people accountable. Seek advice here as well.

Finally, each vertical market has subsets within them that have core competencies. Indoor air quality, water treatment, specialized lighting, whole house generators, and more can all be very profitable specialties that require research, knowledge, and specialized training. 

This training should involve the technical aspects of the products, as well as how and when to communicate this information in layman’s terms during a call. Seek out manufacturers to partner with, offer the technical support, and more importantly, the communication skills and training for your team. We realize that most technicians don’t like to “sell” and it isn’t their core competency, but they have the perfect opportunity to get homeowners happily involved in accessory products that have many benefits they look for. Partner with a manufacturer of these accessory products that can train your technicians on how to communicate these benefits during a normal conversation, on every service and maintenance call.                

The bottom line is, know your core competency, focus at being great at it, and outsource or hire out everything else. As owners, we are all leaders in our business, and to be an effective leader, it takes determination and focus.

“The moment a leader steps away from his core competencies, his effectiveness as a leader diminishes.” – Andy Stanley   

So, lead with your strengths, and learn to manage others on your weaknesses.


Steve Mores is the Vice President of Training and Sales at Dynamic Air Quality Solutions

Service Roundtable is dedicated to growing your bottom line and helping your business maximize its full potential. These groups of contractors work together to assist you with marketing, sales, business, and so much more. Twice a month, seminars around the United States and Canada are held to network and further assist your business. Visit Service Roundtable.com to see if there are Success Days in your area!


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