Are you thinking of having or reviewing a competency model? Here are some tips on it
UNFORTUNATELY, the answer to this question, for many organisations, is a resounding NO!
Ever
since psychologist David McClelland suggested that we should move away
from the traditional measures of predicting job performance in
Testing for Competence Rather than for Intelligence, in the early 1970s, many businesses and organisations have used some form of competency model as a key business tool.
Think
about your own business or organisation, I am sure that you “have had,
have, are thinking of having or are reviewing...” a competency model at
this time.
Where are you on that continuum? The key questions
are, “Why hasn't competency modeling delivered on its promise for many
organisations?” and “Do competencies really add value to businesses and
organisations?”
Have competencies been “a HR toy” and not a
business tool? Let's look at some of the research behind competency
modeling and see if we can answer these questions.
The use of competency models started with McClelland's work in the early 1970s.
A
decade later, in 1982, Richard E Boyatzis illustrated a logical,
integrated model of managerial competence in his seminal book called
The Competent Manager.
His
model provided a context for understanding the demands of management,
and helped managers understand the competencies required to be more
effective.
So, given that we had a reasonable start to the use of
competencies in business why haven't competency models delivered
greater impact into organisations?
In
The Leadership Machine,
Lombardo and Eichinger showcase research indicating that most
organisations and their leaders identify the wrong competencies for
success they don't know how to get at the essence of competency
requirements.
They also show that many competency models are too
compound trying to cram too many competencies into just five to 10
statements and hoping that will do the job!
In addition, a set of
“Core Competencies” can't do the whole job for an organisation either
jobs and roles are unique and generally require 20-25 competencies to
describe the “Success Profile”.
The truth is all organisations need multiple competency models to fit their many different needs.
Yet, many organisations seem to think that a “one size fits all” approach will work. It's not that easy, I'm afraid.
A great starting point for an organisation, however, is a “Strategic Leadership Model”.
At
least, that will let your leaders and aspiring leaders know what the
organisation (normally the CEO and the board) thinks is going to be
required to be a successful leader over the next five years or so.
A global
Conference Board
study from 2012 asked senior executives what were the most important
items on their talent agenda. The top four (in order) were:
- Grow talent internally;
- Improve leadership development;
- Provide training and development; and
- Hire talent in the open market.
These are all great things to do high on your agenda, too, no doubt!
My question is the same for each point grow to “what”, improve against “what”, develop to “what”, hire against “what”?
I'm sure that you get my point.
Unless
you can clearly define what you need in each area usually through a
good Competency Model then you really don't know how to direct, focus or
orient your growth, leadership development or hiring. Competency models
are very powerful tools in this regard.
There are many good
researches that show how the effective use of competency models can make
a powerful business impact for an organisation.
Here are just a
few. A longitudinal study by Russell in 2001 showed that top-level
corporate executive performance can be reliably predicted by a
leadership competency model. In addition, he showed that a
competency-based executive assessment and selection process lead to an
increase of US$3mil (RM9.29mil) in annual profit per candidate selected
into the organisation.
Pluzdrak conducted a study in 2007 on the
effectiveness of a Leadership Development programme and showed that
positive changes on the key leadership competencies of individual
leaders were positively correlated with both increase in net revenues
and profitability!
A 2008 study by Clark and Weitzman used
regression analysis to show that the demonstration of 13 core management
competencies accounted for 54% of the difference in first-year sales
commission and 30% of the difference in levels of retention.
They
also found that developing people to be one standard deviation better
on the key competencies driving performance generated an additional
US$467,000 (RM1.45mil) per person every year!
The original
question for this article was “Are we competent with competencies...?”
Take a good, hard look at your own organisation and ask the same
question.
If your answer is “No, not really... Not as good as we
should be...” then remember that you can be and that there is every
reason “Why you should be” and “Why you need to be”.
Talking HR with Graeme Field
Graeme
Field believes that doing the basics' right getting the fundamentals in
order is key to driving organisational success in the future. What we
do operationally' today really does impact what happens strategically'
tomorrow!
