How to Capitalize on Competencies

Imagine: a Camelot-type place to work, where the strength and strategy of theorganization is the sum total of the individual talents of the employees. Theorganization far surpasses any other in its class in terms of performance andcustomer satisfaction.

Is this a fantasy? No, says William J. Rothwell, an author, consultant,professor of human resources development at Penn State University, and formertraining director in both the private and public sectors. He says that if youtake the best employee performance you’ve got, capture it, and replicate it,you’ll get high performance company-wide and better results for the business.

Competencies are individual
For years, Rothwell says, theorists have talked about “core competencies”of organizations. Core competencies have been thought of as characteristics thatset an organization apart from its competitors and that the organizationtherefore dare not outsource.

What a competency really is, he says, is an inherent characteristic thatpredisposes an individual (not a company) toward certain skills and behaviorsthat achieve exemplary performance. “It is anything that leads to results,”notes Rothwell.

This isn’t to say that organizations don’t matter. What makes anindividual better than his or her peers is partially determined by the corporateculture. According to Rothwell, what is exemplary for one organization may notnecessarily be exemplary for another organization. The key is to develop andimplement models of ideal performance based on the specific organization.

Competency modeling enables organizations to shift from job-based topeople-based structures in which exemplary employees are identified andinterviewed to discover their secrets to success. Rothwell recommends that theorganization’s decision-makers begin the process by stating exactly what theywant from the effort—such as a corporate culture that values customer service.This data is then compiled, compared, analyzed, and synthesized into pictures ofcompetency for the organization. Competency models spotlight stellar individualperformance and use it as the yardstick against which all performance isevaluated.

In the early 1990s, Jaguar North America had to change the way it didbusiness—and change it fast. As competition heated up in the luxury carbusiness, Jaguar was burdened with a culture that did not value customerservice.

For the company to remain competitive, it was essential to make fundamentalchanges. Employees were organized into new work teams that could respond todealer questions and problems quickly. When work teams had a “victory,” thebehaviors that most affected those successes quickly became evident. And whenthe behaviors became evident, so did the individuals who demonstrated them.These outstanding performers were queried about how they did their work, and theresulting information was compiled into descriptions of the characteristics andbehaviors most likely to lead to success.

Interview stars to capture their successes
To create your own competency models, Rothwell recommends using “behavorialevent interviewing” (BEI), a technique developed in 1978 by Harvard researcherDavid McClelland, who founded McBer and Company, now part of Hay.

An organization selects its superstars and interviews them with a moderatelystructured session of open-ended and probing questions. The goal is to spotlighttwo career turning points and capture the unique behaviors, feelings, andthoughts underlying each of the incidents for the individuals. Following areeight sample interview questions:

1. Think of two events that had the most influence on your career developmentand describe them.

2. Why did these events have such a significant impact on your development?

3. When did they take place?

4. How did the events come about?

5. Describe the events in sequence.

6. Describe, specifically, how you developed or changed as a leader as aresult of these events.

7. Is there any other information that is important relative to the contextof this event?

8. How would you frame a work situation to provide someone else with asimilar outcome and/or experience?

The results of the interview are recorded, transcribed, and analyzed, andfrom this emerge competency models that align with the organization’sstrategic objectives. In the Jaguar case, providing outstanding customer servicewas identified as a corporate strategy; those individual behaviors that achievedcustomer-service results were then quantified and described.

Here’s how: Jaguar identified “customer-service orientation” as a keyindividual competency; after interviewing its star performers, the companydivided the competency into six levels of behavior.

Level 1 reads: “Follows through on customer inquiries, requests,complaints. Keeps customer up-to-date about progress of projects (but does notprobe customer’s underlying issue or problems).” In contrast, Level 6 reads:“Works with a long-term perspective in addressing customer’s problems. Maytrade off immediate costs for the sake of long-term relationship. Looks forlong-term benefits to the customer. Acts as a trusted advisor, becomes involvedin customer’s decision-making process.” (from Compensation & BenefitsReview, 1996).

We posed some questions to Dr. Rothwell about how to move forward with acompetency-based structure in your organization:

Q. How can HR practitioners justify the costs involved with identifyingcompetency, establishing competency models, and implementing these models?

    Rothwell: Competency identification is based on the view that exemplaryperformers who exist in each job category can be as much as 20 times moreproductive than the average performer in the same category. If it were possibleto get all the employees up to the level of the exemplars (the so-calledbest-in-class workers), then an organization might be able to get the same workout with a factor of 20 fewer people. Or it might be able to realize an increasein productivity of perhaps as much as 20 times what the organization iscurrently realizing. (The latter would make the organization an industry leader,no matter what the industry!)

Of course, the reality is that some competencies must be hired or selectedfor. Only some can be developed.

Q. How is the notion of competency modeling different from jobs and jobdescriptions?

    Rothwell: The notion of jobs is becoming outdated. While jobs are going away,though, work never does. Competencies are more enduring than “jobs,” thoughit is important to remember that a competency is inherent to a person and notresident in the work that they do. In other words, you—as a person—havecompetencies. It is up to the company/employer to figure out how best to harnessthose talents within the context of the corporate culture.

Additionally, job descriptions speak only to the activities or duties thatpeople carry out—not to the results they are intended to get. Researchcontinually shows that bosses and subordinates differ on what results should beobtained by the worker. But competency models do speak to results, workingbackward to the qualities that people need to obtain them. Moreover, in an agewhen people have grown to appreciate the value of emotional intelligence,competency models do a better job than job descriptions at helping to describeimportant yet intangible elements that are essential to job success.

For instance, would you like a doctor who is technically proficient but whotreats you like a piece of meat? Well, the intangible part of a doctor’s jobis to treat you like a human being, and that’s exactly the sort of thing I’mtalking about. As work involves more relationships—that is, with customers andcoworkers or teammates—the intangible emotional-intelligence issue only growsmore important.

Q. What methodologies should practitioners use to link competency models tothe organization’s core competencies and strategic strengths?

Rothwell: The big challenge in this line of work is that everyone wants quickfixes. But there is a trade-off between rigor and speed. There are thousands ofcompetency models that you can get for free on the Web. And some organizationssell published competency models. But their value is suspect because (1) to bemost useful, a competency model must be based on the corporate culture in whichthe performer carries out his or her work; and (2) competencies are based on theperson, not the work. Perhaps the best approach is something calledbehavioral-events interviewing (as discussed earlier).

Q. What does a competency-based organization look like?

Rothwell: All aspects of the traditional HR function are based on workanalysis, which has “job descriptions” as its chief output. But acompetency-based organization substitutes competency models for jobdescriptions. All aspects of HR—from recruitment through selection throughtraining through performance appraisal through reward systems—are based oncompetencies. That is what my new book (Competency-Based Human ResourcesManagement, Davies-Black Publishing) will examine: reinventing HR to usecompetencies, not job descriptions, as the foundation for the whole HR functionand for all those activities such as HR planning, recruitment, selection,training, reward systems/compensation, performance management, and all others bywhich HR practitioners help their organizations employ people to best effect.

    Q. Do you have any other advice for practitioners about identifyingcompetency, establishing competency models, and implementing these models?

Rothwell: That was the point of The CompetencyToolkit. It is competencyidentification, modeling, and assessment for those who have no clue where tostart and limited resources for doing it.

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