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ex e o -
plan ecute t nsures mpeten
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may 2008 | T+D | 71

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

o
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
n
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.

o
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.

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

72 | T+D | may 2008

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

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may 2008 | T+D | 73

 and engagement models that differ-
entiate the organization and define
its brand.
If we agree that competencies mat-
ter in different ways to meet different
business objectives, a critical issue is
how they should matter in any specific
organization. In other words, we need
an approach that helps us prioritize
competency-related activities and
weighs the return of going one direc-
tion versus another. Many companies,
for example, are focused currently on
com High
pete -
ncy perform
man
orga s a ance
t
wor nizat rategie ementg
k if i
they onal lev s at the
seni are o el on
or m wne ly
anag d by
eme
nt.
the competency management of the
top 10 percent of leaders in their com-
panies. From a holistic perspective,
how do we evaluate this investment
against others?
Complementary strategies
Let’s examine what is involved in
developing an overall strategy and
some success factors in each of three
critical areas.
Competence. Consistent execution
and current and future skill readi-
ness are critical to competence. One
bad customer experience can cost an
organization a customer. Errors on the
battleground, in the hospital, and even
on the shop floor can cost lives. Yet,
competence is not simply about devel-
oping readiness, or having the skills,
knowledge, and attributes to perform.
Competence also involves the willing-
ness and desire to perform. These fac-
74 | T+D | may 2008
tors are influenced by the daily experi-
ence at work and the perceived nature
of the organizational team.
Competence requires developing
skill and knowledge models that tie to
current roles and anticipate future skill
requirements. In a recent EMC Cor-
poration survey of 1,000 information
technology professionals, managers
reported that only 33 percent of their
existing workforce is adequately pre-
pared to manage the expected growth
in data storage. Similarly, a recent
survey by Softscape identified that 86
percent of companies believe their
workforce is not adequately prepared
to meet future business goals.
A common skills and competency
language developed in alliance with
schools and universities can help ad-
dress the skills shortage that will affect
most professions. The U.S. Commerce
Department estimates that in the next
10 years, the United States will need
1.3 million new information technol-
ogy workers—about 138,000 per year.
While incompetence is a going-
out-of-business strategy, surveys and
statistics show that most companies
and organizations are not manag-
ing competence effectively. A 2004
Conference Board survey found that
66 percent of workers do not connect
with nor feel motivated to drive their
employer’s business objectives. Simi-
larly, a Towers Perrin survey of 90,000
workers found that 79 percent are not
engaged in their work. Additionally, a
United Kingdom survey estimates that
5 to 10 percent of workers are incom-
petent. Calculating a cost of incompe-
tence based on such estimates is not
difficult, but it is often overlooked. In
medicine, the cost of preventable er-
rors is estimated at $17 billion per year.
From an individual employee per-
spective, competence means
• I understand how my role fits
within the organization’s key
deliverables and processes.
• I know what I need to do to
support the business strategy.
• I have the skills, knowledge,
and values required to perform
my role.
 • I can perform my role effectively
in a wide range of situations.
• I am willing to go the extra mile
for my organization.
The competency management
“playbook” for competence involves
job and skill models, development
processes, and metrics that address
• the skill readiness of my workforce
• where are we currently strong and
where we need to improve
• an assurance that employees
understand their role in execut-
ing the business strategy and are
aligned with business objectives
• a strategy to build trust and em-
ployee engagement
• skills needed within the next five
years that we don’t currently have
• a skill shortage strategy and
implementation plan.
Productivity. Achieving leadership
in the organization and industry
requires continually getting better
and attaining superior performance.
Competency management at this
level involves identifying superior
performance and getting more of it.
A productivity strategy involves
identifying those roles that offer sig-
nificant return-on-investment when
comparing average and superior
performers. The productivity value
of improving output from average
to superior is viewed as a 48 percent
increase in high-complexity jobs. Iden-
tifying roles that are good candidates
for higher returns is an important step
in getting buy-in for competency man-
agement activities.
Competency management at the
productivity level involves identifying
the characteristics that differentiate
superior performance. These charac-
teristics then inform leadership com-
petency models and selection as well
as training and development.
Six years ago, at EMC Corporation,
a group of high-performing sales exec-
utives were placed in a new field-based
productivity manager role that focused
on driving increased productivity in
the field through training and devel-
opment. Superior performer models,
mentoring programs, and role-based
76 | T+D | may 2008
curricula were developed and used for
competency assessment and devel-
opment planning. After six years, the
productivity manager program has ex-
panded globally and is able to demon-
strate links between increased training
and development and revenue.
Brand. Organizations that differentiate
competence and productivity strate-
gies have taken an important step in
making business sense of competency
management. However, some compa-
nies go further by creating a sustain-
able competitive advantage strategy
based on their people. Competencies
in this view are those values, prin-
ciples, and methods that define the
organization’s brand, such as service,
innovation, and product leadership.
Competitive differentiation
through people happens by creating
great teams. Companies that develop
environments where their employees
are highly motivated and want to go
the extra distance to exceed customer
needs gain advantages that are
difficult to emulate. For example,
because Southwest Airlines employees
are highly motivated and productive,
there are fewer employees needed per
aircraft and higher service levels than
the competition.
All of the companies that rely on
high-performance teams as part of
their brand closely manage their cul-
ture with the same intensity as their
business strategy. Valuing people is
easy to proclaim in an organizational
values statement. However, walking
the talk and living out the values is
extremely difficult with pressures for
quarterly financial results. Companies
that succeed are able to connect the
dots of competence and productivity
strategies by creating a culture of high
performance based on commitment.
Complete alignment with company
goals is critical for innovation, con-
sistent execution, and extraordinary
customer service. In his book, Loy-
alty Rules, Fred Reichheld shows that
a 5 percent improvement in customer
retention rates yields a profit increase
between 25 and 100 percent across a
wide range of industries. Jeffrey Pfieffer,
in his writings, documents how com-
panies that are successful in creat-
ing such high-performance cultures
outperform the market and increase
shareholder value by an average of
$41,000 per employee.
High-performance competency
management strategies at the orga-
nizational level only work if they are
owned by senior management, em-
bodied in corporate policy, and
managed on a daily basis. Such com-
panies rely on all employees to be em-
powered and to continually improve
what they do in order to do it better
than anyone else.
In summary, we as workforce de-
velopment leaders need to reposition
competencies as a necessary compo-
nent of our organizations’ business
plans. We have examined an approach
to directly link competencies with core
business requirements and strategy.
Cracking the code of competency
management involves treating compe-
tencies as more than a single “game,”
and aligning competencies to their ap-
propriate business objectives.
Three suggested next steps include
• prioritizing your organization’s key
competency management business
issues
• reviewing your current plan to
manage competence, productiv-
ity, and brand; identifying gaps, and
quantifying and prioritizing the gaps
that present the opportunity for the
biggest organizational returns
• developing an implementation plan
and governance board to sustain
competency management as a core
business process. t+d
Ernie Kahane is the director of learning
strategy at EMC Corporation, and is on
the advisory board at Intrepid Learning
Solutions; kahane_ernie@emc.com.
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