Most of us use hundreds of different skills in our work. But not all of these skills are equally important. Our research has found that the most important skills for an individual or an organization are differentiating skills.

Core skills are important, you can’t do your work without them, and you will need to invest in them and make sure you are staying near the front of the curve.

Supporting skills are something you need to be able to access whenever you need them at as low a cost as possible. You can’t do business without them, but they are not what makes your business.

But it is differentiating skills that win work and drive profitability. If you don’t have differentiating skills you are going to be seen as a commodity.

What are differentiating skills? The key insight is that they are the skills that can impact your customer and that your competitor does not offer. An old graph from the strategic pricing world brings this into focus.

The importance of differentiation goes back to work on pricing strategy by Tom Nagle (see his book, with various co-authors, The Strategy and Tactics of Pricing). Tom’s basic insight is that (i) value is always in the context of the customer and their needs and (ii) that it is always relative to the alternative.

These insights apply to differentiating skills. Differentiating skills can only be identified in the context of a specific project and customer and they are always relative to an alternative of competitor.

Let’s look at a real example.

A consulting engineering firm is bidding on the design of a new bridge. The bridge needs to carry cars and trucks, light rail, pedestrians and bikes. The footings are in mud. The bridge is an earthquake zone. There are important wetlands impacted. These wetlands contribute to local fisheries. Very few companies on their own will have all of the necessary skills. The winning proposal will almost always be from a consortium.

Company A and Company B both have excellent skill sets in the design and engineering of bridges for challenging settings. Company A complements this with deep experience in environmental assessments and design for sustainability, green engineering so to speak. Company B has done more practical work in intermodal transportation and on the integration of bridges into wider transportation grids. There is clear differentiation for each company. The buyer will need to decide which skillset is more important, the green engineering cluster or the intermodal transportation integration cluster. No one company is going to excel at all skills and the attempt to do so will just dilute their positioning.

How should you go about developing differentiating skills?

Begin by knowing who will be interested in your skill set and who they will be comparing you to. The unique combination of skills that you bring to a problem is your differentiation.

Then take a hard look at your core skills. Are there any that could become differentiating skills if you upgraded them or combined them with other skills? There may be many people with expertise in using CSS (Cascading Style Sheets) for front end web development. There are fewer people who combine CSS with SVG (Scalable Vector Graphics) and Python and who have applied these skills to data visualization projects. Any of these skills by themselves are probably core and not differentiating, but put them together and apply them to data visualization is a powerful differentiation in today’s market.

Not all of your core skills can or should be differentiating skills. You need a strong body of core skills that you will share with other people in your profession. Some of these will naturally become supporting skills over time through a process of skill commoditization. You should see if you can pare down the number of core skills you need by partnering with other people. This can free up time for you to use invest in developing your differentiating skills and to explore some emerging skills.

TeamFit helps you to understand which of your skills are core and which are differentiating. As we gather more data, we will provide more and more benchmarking data for individuals, roles, projects and companies. Join us in our mission to increase the capabilities or people and organizations.

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