Common Management Errors (137-140)
Cxxxvii) Not differentiating between core and peripheral competencies (the core competencies given organization its clear identity, ie what the organization does well at; these core competencies need to be protected. Organisations need to be careful about making decisions on the less important, peripheral competencies that can dilute the core competencies. For example, decisions made on short term incentives looking for immediate growth and profit opportunities rather than looking at long-term sustainability. Using an opera organisation as an example, it's core competencies are the stories and music. While the peripheral ones include food and beverages, etc
Having clarity on the core competencies, helps all levels the organisation makes the right decisions; it provides guardrails.
Linked with this is the growth trap, ie when organisations
“...Undertake investments or make decisions that slowly erode the original unique strategy or dilute the boundaries that gave the firm it's original clear identity…”
Constantinos C Markides, 2025
Some extra comments on growth trap
Cxxxviii) As making predictions about the future can be misleading
“...When investment is being evaluated, nobody knows for sure if it will lead to dilution and/or if it does, how much dilution there would be. It's only after the fact - and often, long time after the fact - that the dilution effect becomes apparent and by that time, the damage has been done…”
Constantinos C Markides, 2025
Cxxxix) Generally it is a series of small decisions taken over a long period that can accumulate and lead to dilution; it is very rare to be one major decision
“...Since firms evaluate each investment on its own merits at the time they are considering it, individual investments may not appear as to damaging to the firm’s differentiation; and since the investments are taken over a long period of time, it is difficult to assess their cumulative effect, which is the real culprit for the damage…”
Constantinos C Markides, 2025
Cxxxx) Short term benefits can hide the apparent dilution as the later may only become apparent in the long term