Core and Context

What is it?

Core and Context is a distinction that separates the few activities that a
company does that create true value strategically (CORE) from everything
else that a company need to do to stay in business (CONTEXT).

Geoffrey Moore articulated this framework in his great book “Dealing with
Darwin”, arguing that a company should manage these two different sorts
of activity in fundamentally different ways.

 Products and capabilities tend to rotate around this matrix clockwise:

 New IT infrastructure ideation, planning and implementation starts in the

bottom left quadrant, since the reason for their existence is to create
differentiation without impacting but have no P&L impact initially. This is
where the Minimum Viable Product mindset of the Lean organizations rules,
with the focus on learning and innovation.
  The successful IT infrastructure will translate into efficiency, accuracy, and
profitability, thus becoming mission critical. The management focus changes
from innovation to deployment of infrastructure across the entire organization.
 Nothing lasts forever. The stakeholder and competition keeps evolving and
get closer and start matching the organizational innovation. The innovation
stops differentiating and becomes a hygiene factor. The management
approach needed is to manage the product – the tactical tweets and turns
needed to get the most out of a big product differentiation at full maturity.
 Finally, with the innovation commoditised, it becomes regular routine and
cease to upscale the organization. It is a time to OFFLOAD the service,
focusing on cost reduction resulting in outsourcing the process to companies
where this activity would be core to them and could give it full attention.

The company needs to constantly fight organisational entropy, actively

removing activities from context and adding to core.

When is it useful?

This concept is useful during strategic analysis of your portfolio. Analyse

your products, channels, customer segments or geographies to identify
which of the four quadrants it is in. Then check – do you have the right
management approach for each one?

Secondly, once you have identified your strategy, apply this framework to it
as a checklist to identify how to manage the different initiatives that are
launched.

A Case

Software and IT infrastructure application in a Retail organization.

 INVENT. Initially a marketing team was set up which ideated on various IT

infrastructure that could be adopted for implementing effective CRM, allowing
big data analytics, and forecasting. They learned which and how a digital
infrastructure will trigger a business for them.
 DEPLOY. The organization use the software and other support IT services for
recording information from all major business centres, manage the information
from local markets, train the stakeholders on operations with IT, enable J-I-T
 reports, and the likes. The operations were intended to give them strategic
advantage over competition and build credibility in market through application
of best CRM practices to share with their customers.
 MANAGE. Over time, customer data analytics induced strategic upscaling for
the organization by capturing information from every TPS and digital
touchpoint for unification with big data. Though the operation scheduled
through IT platform is mission critical for bringing strategic advantage, but is
gradually becoming a routine job of recording the information and structuring
it. Thus, the organization may build a service centre to manage the
information flow.
 OFFLOAD. Finally, the company may outsource these services of recording
the information and structuring it to their business affiliate to manage the more
routine jobs. The option of offloading may seem more cost effective as the
routing process shall prove fat for the company.