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70 | T+D | may 2008 Photo by Shutterstock

Man etency
Cra ent:
the C ing
for Oode rgan
i zatio
nal I
r mpa
clar oaches
com ify the to ct
conf petenci
tale etency
usio e
n. s
nt m man
hav a agem
By e be nagem en
Erni pen com ent
initi t is cen
e Ka ding e cr a tral
han C sk i t ica tive t
e omp ills sho l in ligh s, whic o
and eten rtag t o f the h
a c e.
form roadma ies prov im-
anc p fo ide
man e. Su r eff stan
a cc ec dar
can gement essful c tive per ds
ex e o -
plan ecute t nsures mpeten
, an he c that c y
tion d omp e
al ch guides any mploye
skill al t h b u es
sho lenges e way o siness
add r tage o f ski rgan
re s, ll iza-
und ssed. Th and lea readin
erst e orga d e rsh e ss,
tenc an
y m d and s nizatio ip are
co gem ucceed ns that
be v mpetit en in
iewe ion t will be compe-
sho d as f or s lead
rt, c c
stra omp employ arce tal ers in
tegy et ers ent
for c encies d of cho and
omp o ice.
etiti ne righ In
ve a t are
ntag a

listen to this feature


may 2008 | T+D | 71

In practice, many organizations particular organization soon had more
get stuck using competencies because than 300 competency models and
they lack basic guidelines. For exam- 1,000 distinct competencies.
ple, a logistics vice president received Competency management is dif-
negative feedback about a lack of ficult because competencies are
career development options. Her cor- confusing. There are fundamental
rective action plan involved building disagreements about what compe-
a competency model and mapping tencies mean and how to use them.
development options to it. For example, are they about skills, job
Com tasks, or characteristics of superior

pete performance? Given multiple alterna-

ncie tive approaches to competencies, how

road tanda s prov

s does one select them?
There are two common ways of

perf map rds ide dealing with the lack of agreement.

com rman for ef and a
The first approach is avoidance, which

pete ce. S fecti

characterizes the business example
above. Here, each organization treats
ensu cy m ucce ve competencies in their own way. As

can res t anag ssful noted, this tactical approach leads to

exec hat e e
disconnected silos, and alternative ap-

ute t mpl ment

proaches are not reconciled.

Another approach acknowledges

addr businehe comp yees

differences and seeks agreement
about definitions and models through

ess o ss pl a
rgan an anny
governance. The problem with this
approach is that legitimate disagreement

izati d
exists regarding competencies. Reaching

chal onal
agreement on what a competency
means and how it can be applied

leng directly is a recipe for endless debate.

Reaching an integrated approach
We need an approach to competency
management that can reconcile the
Simultaneously, the customer ser- disagreement about meanings and go
vice organization decided to assess beyond avoidance. In this way, differ-
its employees’ skills, and developed a ent answers about competencies can
model that primarily focused on sys- be correct if placed within a strategic
tems and products. The HR function framework. In this view, clarifying
built a leadership model for recruit- competencies requires rethinking
ment and development that focused competency management as involving
on key behaviors of superior per- three strategies, not just one.
formers, while the sales organization The term “competency” is similar
decided to assess its reps on the key in concept to the word “game.” There
customer activities critical for success. are various types of competencies that
Models, tools, and processes were involve different sets of rules, scoring,
built internally as well as purchased. and outcomes. To make sense of com-
These important business initiatives petencies, we first need to start from
incrementally and steadily added up. core business objectives, and work
This bottoms-up approach to com- backwards. As a first step in under-
petencies, by group, function, and standing what competencies mean,
division, eventually led to chaos. there needs to be a more strategic
There was no best practice, standards, view of the business purposes that
or agreement on the approach. This competencies serve.

72 | T+D | may 2008

Cracking the code of competen- be expected and inspected. If the orga- So to address the questions of what
cies and competency management nization wants to be known for a high a competency is and how best to im-
requires starting with what is required, level of customer service, there are plement a competency management
from a people perspective, for organi- specific competencies that need to be strategy, the proper approach is to first
zations to be successful. First, organi- managed and demonstrated as part of ask, “What is your current plan?” and
zations need a plan for competence the organization’s daily practice. then prioritize around competence,
for today and tomorrow; they need to In short, effective competency productivity, or brand. In other words,
know that their employees (and future management means having three ask how are you improving current or
employees) in their varied roles can coactive and complementary future execution, achieving higher per-
execute organizational strategy. strategies—competence, formance levels, and enhancing your
Second, organizations need to con- productivity, and brand. If we start organizational value?
tinually drive superior levels of perfor- with these business imperatives Competence requires job models of
mance and leadership behaviors. They and work backwards, different the skills, knowledge, attributes, and
need to identify the behaviors of their views about competencies will desired results needed to do the work.
best performers and duplicate them to make much more sense, and we’ll Increasing productivity and leadership
drive higher productivity at all levels of achieve significantly more business behaviors requires superior performer
the organization. impact. Each business objective models by role that detail the differ-
Finally, organizations must stand requires different competency model ences between superior and average
out from their peers and gain cus- approaches, tools, and metrics. performers with the organization.
tomer loyalty through outstanding Managing, prioritizing, and aligning Competitive advantage requires com-
products and services. Organizational all three levels are necessary for municating, expecting, and inspecting
competencies that drive brand must effective competency management. a set of core company values, beliefs,


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may 2008 | T+D | 73

and engagement models that differ- tors are influenced by the daily experi-
entiate the organization and define ence at work and the perceived nature
its brand. of the organizational team.
If we agree that competencies mat- Competence requires developing
ter in different ways to meet different skill and knowledge models that tie to
business objectives, a critical issue is current roles and anticipate future skill
how they should matter in any specific requirements. In a recent EMC Cor-
organization. In other words, we need poration survey of 1,000 information
an approach that helps us prioritize technology professionals, managers
competency-related activities and reported that only 33 percent of their
weighs the return of going one direc- existing workforce is adequately pre-
tion versus another. Many companies, pared to manage the expected growth
for example, are focused currently on in data storage. Similarly, a recent
survey by Softscape identified that 86

com High percent of companies believe their

pete -
ncy perform
workforce is not adequately prepared
to meet future business goals.

A common skills and competency

orga s a ance language developed in alliance with

wor nizat rategie ementg schools and universities can help ad-
dress the skills shortage that will affect
k if i
they onal lev s at the
most professions. The U.S. Commerce
Department estimates that in the next

seni are o el on 10 years, the United States will need

or m wne ly
1.3 million new information technol-

anag d by
ogy workers—about 138,000 per year.
While incompetence is a going-
eme out-of-business strategy, surveys and

nt. statistics show that most companies

and organizations are not manag-
ing competence effectively. A 2004
Conference Board survey found that
the competency management of the 66 percent of workers do not connect
top 10 percent of leaders in their com- with nor feel motivated to drive their
panies. From a holistic perspective, employer’s business objectives. Simi-
how do we evaluate this investment larly, a Towers Perrin survey of 90,000
against others? workers found that 79 percent are not
engaged in their work. Additionally, a
Complementary strategies United Kingdom survey estimates that
Let’s examine what is involved in 5 to 10 percent of workers are incom-
developing an overall strategy and petent. Calculating a cost of incompe-
some success factors in each of three tence based on such estimates is not
critical areas. difficult, but it is often overlooked. In
Competence. Consistent execution medicine, the cost of preventable er-
and current and future skill readi- rors is estimated at $17 billion per year.
ness are critical to competence. One From an individual employee per-
bad customer experience can cost an spective, competence means
organization a customer. Errors on the • I understand how my role fits
battleground, in the hospital, and even within the organization’s key
on the shop floor can cost lives. Yet, deliverables and processes.
competence is not simply about devel- • I know what I need to do to
oping readiness, or having the skills, support the business strategy.
knowledge, and attributes to perform. • I have the skills, knowledge,
Competence also involves the willing- and values required to perform
ness and desire to perform. These fac- my role.

74 | T+D | may 2008

• I can perform my role effectively curricula were developed and used for in his writings, documents how com-
in a wide range of situations. competency assessment and devel- panies that are successful in creat-
• I am willing to go the extra mile opment planning. After six years, the ing such high-performance cultures
for my organization. productivity manager program has ex- outperform the market and increase
The competency management panded globally and is able to demon- shareholder value by an average of
“playbook” for competence involves strate links between increased training $41,000 per employee.
job and skill models, development and development and revenue. High-performance competency
processes, and metrics that address Brand. Organizations that differentiate management strategies at the orga-
• the skill readiness of my workforce competence and productivity strate- nizational level only work if they are
• where are we currently strong and gies have taken an important step in owned by senior management, em-
where we need to improve making business sense of competency bodied in corporate policy, and
• an assurance that employees management. However, some compa- managed on a daily basis. Such com-
understand their role in execut- nies go further by creating a sustain- panies rely on all employees to be em-
ing the business strategy and are able competitive advantage strategy powered and to continually improve
aligned with business objectives based on their people. Competencies what they do in order to do it better
• a strategy to build trust and em- in this view are those values, prin- than anyone else.
ployee engagement ciples, and methods that define the In summary, we as workforce de-
• skills needed within the next five organization’s brand, such as service, velopment leaders need to reposition
years that we don’t currently have innovation, and product leadership. competencies as a necessary compo-
• a skill shortage strategy and Competitive differentiation nent of our organizations’ business
implementation plan. through people happens by creating plans. We have examined an approach
Productivity. Achieving leadership great teams. Companies that develop to directly link competencies with core
in the organization and industry environments where their employees business requirements and strategy.
requires continually getting better are highly motivated and want to go Cracking the code of competency
and attaining superior performance. the extra distance to exceed customer management involves treating compe-
Competency management at this needs gain advantages that are tencies as more than a single “game,”
level involves identifying superior difficult to emulate. For example, and aligning competencies to their ap-
performance and getting more of it. because Southwest Airlines employees propriate business objectives.
A productivity strategy involves are highly motivated and productive, Three suggested next steps include
identifying those roles that offer sig- there are fewer employees needed per • prioritizing your organization’s key
nificant return-on-investment when aircraft and higher service levels than competency management business
comparing average and superior the competition. issues
performers. The productivity value All of the companies that rely on • reviewing your current plan to
of improving output from average high-performance teams as part of manage competence, productiv-
to superior is viewed as a 48 percent their brand closely manage their cul- ity, and brand; identifying gaps, and
increase in high-complexity jobs. Iden- ture with the same intensity as their quantifying and prioritizing the gaps
tifying roles that are good candidates business strategy. Valuing people is that present the opportunity for the
for higher returns is an important step easy to proclaim in an organizational biggest organizational returns
in getting buy-in for competency man- values statement. However, walking • developing an implementation plan
agement activities. the talk and living out the values is and governance board to sustain
Competency management at the extremely difficult with pressures for competency management as a core
productivity level involves identifying quarterly financial results. Companies business process. t+d
the characteristics that differentiate that succeed are able to connect the
superior performance. These charac- dots of competence and productivity Ernie Kahane is the director of learning
teristics then inform leadership com- strategies by creating a culture of high strategy at EMC Corporation, and is on
petency models and selection as well performance based on commitment. the advisory board at Intrepid Learning
as training and development. Complete alignment with company Solutions;
Six years ago, at EMC Corporation, goals is critical for innovation, con-
a group of high-performing sales exec- sistent execution, and extraordinary
utives were placed in a new field-based customer service. In his book, Loy-
productivity manager role that focused alty Rules, Fred Reichheld shows that
on driving increased productivity in a 5 percent improvement in customer What Do You Think?
the field through training and devel- retention rates yields a profit increase T+D welcomes your comments. If you would
like to respond to this article, or any article
opment. Superior performer models, between 25 and 100 percent across a that appears in T+D, please send your feedback
mentoring programs, and role-based wide range of industries. Jeffrey Pfieffer, to Responses sent to the
mailbox are considered available for publication
and may be edited for length and clarity.

76 | T+D | may 2008


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