CHAPTER 5
Case Studies and Examples
This chapter will bring competency models to life through organizational case studies that exemplify best practice competency applications. Examples of successful uses have been chosen across the key talent management processes of learning and development, performance management, and selection.
Learning and Development Case Studies
The use of competencies as learning criteria to clarify expected work proficiency, improve proficiency in a job, or prepare for a different role is implicit in establishing an organizational competency model. For example, a sales professional aspiring to be the sales manager can readily detect from an organization’s competency model that to advance they will need to ensure that they have the knowledge and skill to perform in managerial competencies such as Delegation, Team Management, Talent Development (Coaching), Communications, and Influence. Likewise, for the first time, frontline supervisors will also often find themselves in training programs that target these competencies. The following cases are examples of specific successful applications in the area of talent development.
Global Sportswear Company: Teaching Business Competencies Through a Simulation-Based Workshop
The chief financial officer (CFO) of a global apparel and footwear manufacturer identified a need to increase knowledge and skill in several key strategic competencies, including Business Acumen, Decision Making, Strategic Thinking, and Finance. These competencies had been previously validated as part of the company’s universal competency model and confirmed to be essential to success in mid- and senior-level management roles.
To meet this training need, a custom workshop was developed to provide a full immersion simulation experience that represented a complete business system. This offered participants the opportunity to learn on a practice field in a comprehensive business context. The program replicated a seven-year organizational cycle, in which teams of participants assumed leadership roles in the fictitious company and then were challenged to aggressively grow a failing business.
The centerpiece of the program was an intensive, four-day workshop that included the customized computer-based simulation, which was used to emulate the organization’s unique matrix design and business model. The agenda included:
Day 1—Welcome from organization’s manager or sponsor, team-building exercise, financial acumen lecture, FY01 simulation year, and a financial presentation from the organization’s upper-level finance manager.
Day 2—Financial acumen lecture continued, fictitious simulation company overview, decision-making exercises, and break-out team orientation. Homework based on the fictitious company’s problems and possible growth opportunity memos.
Day 3—Review previous day’s homework and create team decisions on the current business direction; run the simulation model forward three years (FY02, FY03, FY04); debrief in teams the three financial years; and make necessary adjustments.
Day 4—Run the simulation model forward an additional three years (FY05, FY06, and FY07) and get final simulation business results. Team presentations based on results and a program review. A final bring it home presentation, which relates the simulation results to real organizational practices, conducted by an upper-level organization manager.
Fifty-two iterations of the program ran over a 10-year period and the workshop ultimately was awarded an American Society of Training and Development (ASTD) Best Practice Citation as a model training event. However, the success of the program rested not just on the positive reaction, but more importantly on a rigorous evaluation plan that used several methods derived from Kirkpatrick’s training evaluation model1 to test competency learning and application. The success of competency learning and transfer to the job was judged on four levels:
Level I: Reaction to training (interesting, informative, valuable)
Level II: Competence (knowledge and skill) gain as a result of training
Level III: Applied and transferred competence
Level IV: Business impact and return on investment (ROI) from improved competence
Level I—Reaction: To assess the participants’ reaction to the program, daily and final evaluations were given to them to obtain a perceived value of the program. The daily evaluations rated the pace and degree of participation, and allowed for any additional feedback about the program, while the final evaluation rated the perceived value of every aspect of the program. Driven by valid competencies such as learning objectives (inherent relevance to the work place), experiential learning, and immediate ability to apply the learning, the program reaction remained consistently high throughout the decade the program ran.
Level II—Learning: The second level of evaluation consisted of 44 multiple-choice questions given at the beginning and the end of the program. This exam tested basic to advanced financial knowledge, as well as measured the four learning objectives and competencies that were highlighted. This test was composed of questions regarding the competencies being taught; pre- and postprogram scores revealed statistically significant knowledge gain in competency proficiency across participants.
Level III—Transfer: Throughout the program, the participants were asked to connect what they had learned with how they make decisions in their organization. On the final day of the program, participants developed action plans that they would implement upon returning to work. Those action plans were discussed with, approved by, and continually evaluated by their managers.
Levels IV—Business Impact: To test the business impact of the program, action learning teams were formed following the program to address real organizational issues. Teams were composed of interested and expert participants selected from across the simulation teams. Teams were required to track the financial impact (ROI) of their solutions and make a report to the management.
The existence of a valid, universal competency model greatly facilitated program design and delivery. For example, the program was immediately face-valid to participants as they recognized the learning objectives as the competencies they had seen many times in the company’s universal model. Participants were motivated to learn, as they recognized the importance of the competencies for future success as they ascended the talent ladder. Training transfer was also assisted because participant supervisors were familiar with program learning objectives (e.g., competencies) and better able to support and coach participants after program completion.
Lipscomb University: A Unique Academic Learning Approach—The Competency-Based Curriculum
Founded in 1891, the Lipscomb University is a private, co-educational, liberal arts university located in Nashville, Tennessee, United States. In 2012, the university introduced a radical innovation to their approach to undergraduate education.2 Leveraging a well-researched, commercially available competency model, they identified a subset of competencies that were considered essential to job success across a wide range of disciplines. This subset of competencies included Organizing and Planning, Problem Solving, Relationship Building, Communications Skills, and Influence Skills. The university added all selected competencies to the undergraduate curriculum.
The addition of these competencies would ensure that organizations hiring Lipscomb graduates were not only getting qualified technical professionals such as engineers, nurses, or IT specialists, but were also acquiring new employees who would be certified in the competencies essential for exceptional application of their expertise.
Known as CORE (customized, outcome based, and relevant evaluation), the Lipscomb program features a Competency Assessment and Development Center employing a best-practice assessment center.3
The Lipscomb Competency Assessment and Development Center specifically evaluates the student’s proficiency in a subset of competencies that have been found essential for career success in a wide range of organizations and professional specialties. The Lipscomb life skill competency set includes:
•Active Listening
•Problem Solving and Decision Making
•Conflict Management
•Relationship Building
•Team Player
•Change Agility
•Influence
•Organizing and Planning
•Initiative
Performing in simulations such as leaderless group discussions, in-basket exercises, business cases, role plays, and presentations, participants are evaluated against required proficiency for entry-level job requirements. Students earn competency credits called badges, and a probable academic credit, for reaching required performance levels. If participants fall short, then targeted online training and faculty coaching are offered to remedy the gap and ensure that a Lipscomb graduate arrives at the workplace with the complete skillset necessary to succeed in an organizational context. The CORE assessment center began operating in June 2013 and received Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) accreditation in December of that year.
Chemical Bank: A Competency-Based, Survey-Guided Leadership Development Process
Established over 95 years ago and headquartered in Midland, Michigan, Chemical Bank is the largest independently owned Michigan based bank, with over 150 branches across Michigan’s Lower Peninsula. As part of an organizational development effort, in 2009, the bank licensed a commercial competency model and customized the competencies to reflect the bank’s industry, market, strategy, and culture.
After establishing the model as the common language for talent management, the bank began a survey-guided leadership development effort starting with the top leaders, including the CEO, and cascading through all managers. Guided by the learning principle that it is better to diagnose before you prescribe, the program employed a rigorous multirater survey to provide feedback about how managers were perceived by other employees vis-à-vis an ideal state (i.e., the Chemical Bank competency model). This popular process has become known as a 360° survey because participants solicit feedback from all points on the compass surrounding their position on the organization chart.
Multirater 360° surveys have become a best-practice leadership development tool now used in the majority of large American organizations. Typically, a 360° includes the following elements:
•Participating managers identify and invite anonymous feedback on their competence from organizational peers and direct reports. Identified raters are limited to those who have known the participating manager long enough to reliably rate them. Bosses are included, but are not promised anonymity. Once respondents are selected, a third party administers an online survey to those identified. Most 360° surveys solicit feedback from a dozen or more respondents.
•The surveys employ rating scales used to judge and compare perceived proficiency across relevant competencies by the different respondent groups. These quantitative results allow normative comparisons. More robust surveys also solicit open-ended written comments to ensure more complete and specific feedback.
•To ensure that participants understand, own, and act on the survey results, they are packaged into a feedback report and a qualified coach delivers the feedback and helps interpret the report.
•Accountability for any needed improvement surfaced by the survey is ensured through a variety of options, including ongoing coaching, developmental objectives required in performance appraisal documents, follow-up surveys, and informal continuing feedback. Because of issues with politicizing the process and rater accuracy, the vast majority of 360° surveys are used strictly for development. While it is tempting to use 360° feedback for administrative purposes (e.g., informing annual appraisal ratings, or succession management readiness evaluations), experience and research have shown that these applications can damage the 360° reputation and introduce negative power dynamics into the process.
The elements above precisely describe Chemical Bank’s 360° process, with the bank strictly adhering to the best practice of using the 360° feedback for development only.4 The bank’s survey process is supervised by a certified external coach, who requests each participant to interpret their own 360° feedback report and present a summary in a feedback discussion. In their summaries, participants contrast current feedback results with previous years’ reports and compare their ratings to norms. Each participant also follows up with their different respondent population (i.e., peers, boss, direct reports) to discuss their feedback and learning. The coach also meets with each participant’s manager to explain general findings but not to share a complete report or specific ratings. This meeting ensures program transparency and supervisor involvement and improves the likelihood of the supervisor’s ongoing support. This supervisory support is essential for a participant’s improvement over time. A unique feature of the bank’s approach is to also designate a trusted peer for each participant who can be used as a sounding board to discuss results, any needed change, and progress toward goals.
Accountability for follow up and change are linked into the bank’s performance appraisal process through required developmental objectives and ratings on competencies. In keeping with best practice, 360° ratings are not transferred to appraisal documents, but participants can measure their progress year-to-year based on subsequent 360° ratings. Another measure of progress is the annual performance rating set on a core set of competencies that every Chemical Bank employee is held accountable for.
It should be noted that at Chemical Bank, the competency model and 360° leadership development process were not just a training initiative, but were also, by introducing the concept of upward feedback, part of a deliberate effort to change organizational culture to encourage more honest, open, and direct feedback. As of time of print, 60 managers had participated in the process at Chemical Bank with a new wave of 360° survey scheduled every 18 months to monitor growth and provide accountability.
The bank has seen improvements in culture and managerial competence, and an unexpected realization of how to better leverage each manager’s strengths and weaknesses revealed through the model and the 360° process. By providing a common competency language that is now thoroughly understood across the bank, the competency model and a formal feedback method have resulted in a much more transparent organization with more open and objective feedback. Finally, the introduction of a competency model and 360° evaluations has helped stimulate and objectify a new succession management program at the bank.
Starwood: A Competency-Based Leadership Service Profit Link
Starwood Hotels and Resorts Worldwide Inc., is an American hotel and leisure company headquartered in Stamford, Connecticut. It is one of the world’s largest hotel companies and owns, operates, franchises, and manages hotels, resorts, spas, residences, and vacation ownership properties under its nine owned brands, including Sheraton, Westin, St. Regis, Meridian, Aloft, and W. The company owns, manages, or franchises over 1,100 properties employing over 170,000 people around the globe.
Starwood has long leveraged the link between profitability, customer loyalty, and employee engagement as identified in a seminal Harvard Business Review article as the Service Profit Chain model5 (see Figure 5.1). Starwood original research has also confirmed the link between the quality of company hotel leadership and associate engagement.
Figure 5.1 Starwood service profit chain
To specifically define exceptional leadership at Starwood, the company has implemented a competency architecture known as the Win with Talent competency model. Among other applications, Win with Talent competencies provide the criteria for a biennial 360° survey-guided development experience for leadership teams on Starwood properties. These hotel leadership teams, or executive committees (ECs), include the general manager, and possibly directors of sales, food & beverage, finance, housekeeping, operations, and engineering, depending on the property size.
To demonstrate the efficacy of this leadership development program, Starwood conducted research that proved the link between improved leadership competence as judged by 360° survey ratings and improved property financial performance. First, the research verified the correlation between higher EC leadership 360° ratings and higher associate engagement scores as measured by a regular engagement survey called Star Voice. The study then established the connection between exceptionally engaged employees and improved customer satisfaction. Finally, research over time revealed a clear relationship between elevated engagement scores and property financial performance as indicated by average daily room rates and hotel revenue performance against a competitive set.
The research has advanced to actually identifying the specific competencies that property leaders must be proficient in to begin this positive cascade. For example, the competency Active Listening practiced by leaders can be a key driver in associate satisfaction and ultimately in guest satisfaction.
The uniform Win with Talent competency model used across Starwood has thus allowed the company to optimize its talent management tools and processes, and ultimately produce more efficient and effective human resources systems.
Competencies in Performance Management
Competency models help provide individual role clarity, which is the fundamental building block in performance management. Setting expectations up-front establishes the ideal state for the job, and allows for legitimate feedback, both positive and corrective, along the way. As performance management systems shift toward a more positive and developmental orientation, competencies become more important in defining and developing job competence.
Art Supply Company: Competency-Based Performance Management System
A medium-sized east coast art supply manufacturer scrapped their performance management system and began designing from scratch a Performance Recognition System that would leverage a new universal competency model. Company managers were invited to a workshop to provide input to the new design. Products of the workshop included a new job model for the company to conceptualize each role.
A complete conceptualization of any individual role at the company is absolutely essential to successful performance management. Managers should begin the performance recognition process with a clear understanding of the role in question. A clear model provides:
•Clear role definition, responsibilities, standards, authority, and expected results
•Motivating objectives to focus energy
•Specific definitions of the knowledge, skill, or attributes needed to perform
Once a clear job model had been established to clarify company roles, a position description (called a Success Profile by the company) was generated as the foundation for setting role expectations and managing performance.
This example of a success profile (Figure 5.3) not only clarified roles and responsibilities but it also served as the basis for setting business and personal development objectives for each manager. Objective accomplishment was required to qualify for the company’s variable pay plan. Developmental objectives were driven by the company’s competency model and ensured focused development necessary for exceptional performance in the assigned role.
Competencies in Talent Selection
Superfeet Worldwide: Competency-Based President Selection
Superfeet Worldwide, a global consumer products organization, was facing a change of its president. The chairman of the board of directors chose an executive search and talent management firm to partner with in the selection process. Having made judgment errors in past appointments, they were acutely aware of the need for good hiring practices that would focus on critical job requirements and assess all candidates in the same fair, consistent, and objective manner.
The first step was to look at the competencies that would define job success. To establish these success criteria they used a commercially available competency model that had identified 41 competencies necessary for effective performance. Using the model’s competency cards, the Executive Search Committee (ESC) sorted through the competencies to identify a subset of key competencies essential to the role of president at Superfeet. Over the course of rich dialog, six competencies were determined to be core competencies for use in the selection process. Those six were then used to create a position success profile, which was fleshed out with core accountabilities and key objectives in the role.
The external search team was given the success profile and told to use the six competencies as the foundation of their search criteria. In collaboration with the ESC, a series of behavioral episode interview questions was developed for each of the six competencies. To ensure the interview would be structured around the competencies, a proficiency scale for each competency was developed and integrated into the evaluation form.
Once the external search partner provided a sufficient number of screened candidates, the ESC moved forward to onsite interviews. Specific training was provided to the members of the interview board. Focus was placed on:
•Competency definition and understanding
•Ways of soliciting behavioral evidence from application documents, during an interview, and from reference checks
•Ways to avoid rater bias
As a strong selection process based on those competencies was considered essential to the role of president, Superfeet was able to identify the individual most likely to satisfy the success profile they had created. After 12 months in the role, the executive team reported significant progress and impact from the new president. The president exceeded the requirements for the role, and his performance reflected strengths in the six essential competencies. Additionally, he had established credibility with the executive team and had established the first strategic business plan for the organization. Lastly, the new president had built rapport with key customers to continue driving increased revenues.
With cases drawn from a wide variety of successful competency applications hopefully both the utility and credibility of competency models have been reinforced. It is interesting to note that different organizations first applied their models in an area of immediate need (e.g., more transparent leadership, more innovative approach to learning, culture change, and so on). Remedying this immediate problem established a beachhead for model expansion once the application had proven itself and gained a positive reputation. Whether by design or happenstance, these successful applications employed positive change management principles.
Questions for Reflection
1.Describe a competency application in selection, development and performance.
2.How have you seen competencies applied in your organization?
3.What applications highlighted in this chapter might be combined to ensure exceptional leadership competence?
4.Describe how one organization used the service profit chain to prove the financial utility of competency models.