Transforming Work: Strategic HR and Competency Models

In recent weeks, I’ve blogged about competency models: why they matter, how they were invented, and how they have evolved.

In this final post of this series, I want to discuss one of the most useful types of competency models: enterprise competency models. These models have changed HR to be much more capable of contributing to strategy and support a radical change in how we think of work and jobs.  I’ll also explain why strategic HR models will become even more important in the coming years.

Enterprise Competency Models: Replacing Research with Theories

One of the most significant developments in the competency revolution was the emergence of enterprise competency models. These models outline behavioral or leadership styles that everyone in a company (or all company managers) should demonstrate. 

Enterprise competency models demonstrate a theory of the behaviors needed to implement the organization’s strategy. In other words, the competency model is a summary and vision of the company’s strategy, articulated in terms of how employees should relate and work.

The model ensures that employee and leader styles reflect organizational needs. For example, key competencies could be:
•    Collaboration, if integrated products are central to an organization’s success
•    Customer focus, if the organization is focused on sales
•    Innovation, in a fast-paced technology company.

As with other competency modeling methods, competencies are described by observable behavioral indicators, such as:

Asks questions to determine customer’s point of view before making decisions.

Enterprise competency models are an evolutionary step for managers. Management has always defined organizational structure and jobs. Competency models extend this responsibility into another aspect of the organization.  This top down approach is, however, quite different from the research-based models that “discovered” the underlying success factors for a job.  It is also quite different from a detailed task or job analysis which are considered the starting point for most legally defensible HR processes.

Of course, there are weaknesses. 

An important concern is that managers’ theories are difficult to test. If an organization is not successful, is the competency model to blame? How long does it take to implement strategy?  How can we improve a competency model if it can’t be validated?

These models can also over-generalize the importance of a competency.  Consider decisiveness, a competency that appears in many models. It’s true that managers who postpone or avoid decisions are ineffective. It is also true, however, that managers who make decisions too quickly squelch innovation and creativity.  As a result, being decisive often sub-optimizes decisions. 

Because there is no way to test the competency model, “pet theories” tend to appear in the models. The risk is that theory-based models can be wrong, and they are rarely tested.

To Transform Work, Tell Employees How to Behave

When HR/Talent departments were largely concerned with jobs and tasks, the function was bureaucratic and pigeonholed. The focus was on providing a stock of qualified people to complete required tasks.

Competency models allow HR and talent departments to manage employees’ general interpersonal and intrapersonal style by describing, rating, and even incenting specific behaviors.

This is revolutionary. Consider a typical competency: develops networks across divisions. This is really a tool for culture change; the behaviors associated with networking describe an expectation that employees exchange ideas and information with other divisions. Ultimately, adopting this competency would reduce the silo-ism that is a problem in many organizations.

Today, organizational leaders have a powerful way to describe how they expect people to relate to one another, and even how they relate to themselves. By articulating competency models, and linking HR/Talent systems to the described behaviors, organizations have a new set of tools for shaping how employees manage themselves, how they relate to each other, and how they relate to customers. 

A new era has begun. By describing, rating, and incenting behavioral performance, HR has the potential to evolve into a real business partner.

The End of Task Management

If a company manages its expectation of behaviors using a competency model, and determines the results using performance management (i.e., a Results-Oriented Work Environment, or ROWE), the change is considerable. Jobs, which are task lists, are less important.

As jobs become less important, HR will be able to focus on business results and become a business partner. The idea of supplying human resources becomes less important, while the idea of talent management becomes critical.

Integrating HR Systems with Competencies

There are many ways to direct and encourage behavior. Too often, the methods a company uses to direct and encourage behaviors aren’t integrated. As a result, the organization ends up encouraging different, or even conflicting, behaviors.

An enterprise competency model provides a general theory of employee success that can be used for a variety of systems:
•    Staffing/selection
•    Succession planning
•    Compensation
•    Development/training
•    Performance management.

An enterprise competency model reflects strategy and links all the major HR systems.

The Future

Today, a typical large organization has seven separate databases related to human resources. This makes it difficult to create a single integrated environment for analytics, reporting, and decision-making. In the coming years, many organizations plan to integrate these databases into one Human Resources Information System (HRIS).

As companies integrate various HR applications, competencies will be at the center of the solution. While the HRIS platform is important, it is the content, and the decisions made with the information, that will be the critical components. In other words, the competency model that provides the architecture of the system will be the real key to business success.  

Strategic HR/Talent professionals should be prepared to align competencies with the strategy of the organization. If you want to have a unique and differentiated strategy, I would encourage you to consider a unique and differentiated enterprise competency model.   If your organization is following the same strategies as others in your industry, it’s appropriate to buy an off-the shelf competency model. Most organizations, however, will want a competency model that represents their unique strategy.

In Summary: Using Competency Models

The so called “competency revolution,” as some call it, has come a long way in 40 years.  McClelland and his protégés, who initially proposed competency are almost historical figures. Their initial methods have been adapted to keep pace with changes in work and technology.  The standard of research based models to uncover unconscious competencies for a single job have been replaced with theories of personal success that span an entire enterprise.

In the process of this adaption, many fine methods of competency modeling have been developed.  I do find it interesting that few HR professionals consider the many approaches to competency modeling and the strengths and weaknesses of each.

This six week  review of competency models has emphasized that different competency development methods yield very different information, and that each is appropriate to a specific task. I expect that integrated HRIS platforms will force us to be more specific about differences in competency models. While I expect that enterprise competency models will become paramount, other methods will remain very useful.

Get the Most from Your Competency Models: Understand All Competency Models Are Not the Same

Since their inception 40 years ago, competency models have progressed through distinct stages, in sync with changes in organizations. As a result, there are many types of competency models, each appropriate for a specific task. But we treat them as if they are the same. 

To get the most value from this valuable tool, we need to understand and recognize the differences in the meaning of “competency.” In the last blog post I described the roots of competencies.  In this post I will describe how they have evolved, and the best use of the various competency modeling methods.

Proliferation of Competency Modeling Methods: Moving from Clarity To Confusion

Corporations have wanted competency models since about 1990. Since they can genuinely drive business results and shape culture, organizations were willing to pay for competency models. As a result, consultants got in the competency modeling business in a big way.  

Initially, competency models were only developed for high-leverage jobs such as sales executives and leaders. A $250,000 competency research project carried out over two months was a good investment because individuals in these jobs drive organizational results.  Further, interpersonal (e.g., teamwork) and intrapersonal (e.g., multi-tasking) savvy are very important in these sorts of jobs and the behavioral event interview (BEI) method was exceptionally good at capturing these capabilities. 

Competency models soon began to trickle down to other job-families. Different methods of developing competency models also proliferated. Consultants argued that their methods were unique and better. 

Many consultants used executive interviews to understand competencies.  Often, the interviews started with organizational strategy and then inquired about the human capability needed to achieve the strategy. These capabilities became the organization’s competency model.

Some used focus groups to quickly capture ideas about competencies from leaders or incumbents. Often the focus groups learned about competency models and then generated examples of behaviors that achieved exceptional results.  Synthesis of these behaviors led to a competency model.

Other methods were clearly cheaper.  An organization could purchase a standard dictionary, or a card deck, of possible competencies. By thinking about the target job, it was just a matter of picking the right cards.  Using this tool, a professional could build model in an hour.

Competency models were also published and compared. Some noticed that leadership models from different organizations were quite similar. Would you go to the trouble of building a model if 80% of  competencies are the same in all organizations? 

Standardized competency models were developed. These models were built by integrating many competency models (research) or using on someone’s ideas of what it takes to be a successful employee or leader (theory). These standard models describe good management and leadership, but note how far we have moved from research to unlock the unconscious secrets to high performance! Many of the competency models were simply theories described in behavioral terms.

Ultimately, confusion reigned.  Everyone was talking about competency models, but in fact they were talking about different things.  There was (and still is) no agreement on the meaning of “competency.” 

Some large organizations (e.g., AT&T) had hundreds of unrelated competency models built with different methods and with different underlying assumptions! Many organizations became overwhelmed.  Some went so far as to ban competency models, at least temporarily.

Where We Are Now:  Many Methods to Address Multiple Challenges

Was this a fad or something else? Three things have happened:

• We learned a lot about the inter- and intra- personal capabilities required for key positions; many leadership competencies are better understood. For example, nearly everyone in business now talks about “emotional intelligence.”  Daniel Goleman, who coined the term, trained under McClelland at Harvard, and notes that this inter-and intra-personal intelligence was influenced by competency research
• The idea of a competency changed and became vague.  Whereas competency was defined as “a pattern of thought or behavior that differentiated average from superior performance,” now it more generally means behavioral performance expectations. Beyond that, there is little agreement about the definition of competency
• We went too far.  We started to think that competencies are the only human capabilities that matter. This is clearly a mistake. Many professional jobs do not rely heavily on inter- and intra- personal capabilities  If you are hiring, developing, promoting or rewarding an engineer, use skills or tasks! 

Competencies are clearly not a fad.  After 40 years, i am confident that competencies are a key and useful tool for Talent Management. 

With the benefit of hindsight, we should have a more sophisticated understanding of competency models and what they can do for your organization’s performance. We should recognize that competency models built using different methods have different sweet spots. As a starting point, here is summary of the various modeling methods and situations when they are best used. I welcome your thoughts and additions.

I welcome your thoughts and additions.

Charley Morrow

Sage Assessments

The Nerd Competency Model: What We Can Learn?

Are you a Dweeb, Geek, Nerd or Dork?

Spend time surfing the web and you will find this Venn diagram describing the overlapping capabilities of the “not-cool” kids.   

It is fun, but recently, I had a serious conversation about it.

A friend of mine, who has a doctorate in theoretical physics from Harvard, is burning out from teaching.  Looking at the model, she said “I’m not a nerd. I’m not obsessed enough—I don’t want to spend 90 hours a week perfecting technology.”  However, she is smart; she enjoys doing complex math.  She will probably change to a career that requires lot of smarts but less obsession and people skills. 

I was surprised this internet joke provided insights!  But, upon reflection, we can we learn a few things from this model: 

1. Human performance is based on a mix of capabilities. Intelligence is never enough to be successful! Tech innovators like Mark Zuckerberg are smart, obsessed, and lack social grace.  Change one of these capabilities and you don't get the full package
2. Sometimes lower or even negative capabilities are important for success.  Consider McClelland and Burnham’s seminal finding that the most successful leaders are concerned with power--relationships and influence.  A corporate leader will only be successful if the concern for power is tempered with inhibition.  Similarly, they found that leaders that are overly concerned with relationships make poor leaders
3. The competencies underlying performance are not always obvious.  A nuanced understanding of competencies helps.   If you want to develop leadership in general, you can develop a general competency model.  If you want to develop specific types of leaders, you will be more successful if you fully research the model