A key to the success of public organizations is their ability to identify and build capacity, particularly their distinctive competencies, in order to produce the greatest value for key stakeholders. This article grounds this proposition in the resource-based view of organizations and presents a method for identifying and making use of distinctive competencies in the form of a "livelihood scheme" - a business model appropriate for the public sector - that links distinctive competencies to organizational aspirations and goals. The case of a major public sector training and consultancy unit that is part of the United Kingdom's National Health Service is used as illustration. A number of conclusions are offered in the form of a set of propositions tied to the resource-based view and related research issues. The results contribute to both public strategic management theory and practice.