Core competency driven reinvention

"Why, when so many widget-makers have gone to the wall or been bought up by foreigners, is GKN alive and kicking and British-owned after 253 years?"

The Economist documents the creation of a new business by GKN enabling it to at times preempt and at times work through the downturns like 2009.

"The trick it has mastered is finding new businesses and markets to move into before its established ones run out of steam. “We have been very good at recognising that things don't last forever,” says Nigel Stein, GKN's chief executive since January."

GKN, whose core business is drivelines for automotive industry, is now one of three or four manufacturers in the world who can build a carbon-fibre composite wing spar for passenger jets.

"The aerospace venture might seem to sit awkwardly in a company whose mainstay is selling car parts but Mr Stein says there are “soft synergies” between the two divisions. Both make high-precision kit for a few global firms: it takes the same set of skills to serve and sustain the trust of such demanding customers."

It is a delight to see large corporations comprehending that the same trick does not last for ever.  For me the article highlights three key attributes of companies that last hundreds of years successfully:

• They know their core competency, continuously challenge it, and grow it into "new" businesses.
• They do not hesitate from trial and error when they push their core competency into the "new" or even the unknown.
• They are not risk averse; that is, they are intelligent about where they take risk, they do not jump into business models that everyone is running after, and differentiation, and at time uniqueness remains a driver for the measurement of success.

The best part of such company's as GKN is; they manage Schumpeter's Creative Destruction with finesse!  And deeply understanding their core competency is at the heart to it.

Read the complete article here.