CHAPTER 2

The Stealth Fighter Needs a Target: The Importance of Competencies

What Is a Competency Model?

A competency model is a description of the knowledge, skills, capabilities, and behaviors required to perform a job or function. More specifically, competencies are related groups of knowledge and behaviors that produce performance excellence within a particular environment/culture and business context. Emphasis is placed on the things that excellent performers do more often, more persistently, and more effectively than do average performers.

Each competency model includes four major sections:

1. Summary of Major Work Activities: A description of the key tasks performed on the job (i.e., what is done). This is a high-level summary, rather than a detailed list of specific task elements and the sequence in which they are performed.

2. Competencies and Behavioral Indicators: A description of the skills and capabilities required for good performance (i.e., how the job is performed). Each competency is defined in terms of specific behavioral indicators, the observable/measurable behaviors employees use, or actions they take, in performing their jobs well.

3. Key Knowledge Areas: A summary of what employees must know to accomplish their tasks well. This section outlines the major areas of job knowledge, rather than detailing specific facts, procedures, and the like, which vary considerably across the organization.

4. Job Context Factors: A description of the work environment and context in which the tasks are performed. Job context is important for understanding the personal attributes and preferences of people who will best fit into the work environment and who will most likely be satisfied working in the job.

Competency-Based HR Systems

Effective human capital systems must meet three basic criteria:

• They must be valid and accurate in accomplishing their intended purposes.

• They must be integrated and supportive of one another (as opposed to, as is often the case, operating at cross purposes).

• They must be vertically aligned with key business strategies and priorities.

Competency models can help achieve these objectives. Exhibit 2.1 shows how competencies can be used as the basis for an integrated vertically aligned HR system. The diagram shows Competencies at the center of various human capital systems. Thus, they become the anchor point, or linchpin, around which systems are designed and used. This links and provides support for the various HR processes. For example, a selection process should collect data on candidates’ capabilities in those areas known to be important for high performance; training programs should help further develop capabilities in those same areas; and the performance management process should address key skills and behaviors in addition to quantitative results. Basing HR processes on competencies known to be important for success (and future success) also ensures that those processes are valid, thereby providing a significant return on investment for the organization. And, to the extent necessary, they also allow the organization to withstand legal scrutiny should they be challenged.

Exhibit 2.1: Building Competencies Around Human Capital Systems

 

Competency models can also help ensure that systems and processes are aligned with business priorities. The diagram also shows how this occurs. The starting point is a clear understanding of the market dynamics and customer needs, which, in turn, drive the organization’s vision for the future and its business strategies. Structures and systems are then developed to implement the strategies. Then key organizational capabilities are identified. These are the things the organization must be very good at in order to win in a competitive environment.

Finally, individual employee capabilities, as defined in the competency models, are determined based on organizational needs and priorities. The organization is able to achieve its strategic goals and purpose, and it is able to become excellent in the areas of core capabilities through the knowledge, skills, and performance of its employees. It is in this sense that competency models, as well as various systems and processes, become aligned with business priorities.

Suggestions on How to Use Competency Models

Suggestions are offered here on how organizations might proceed in using the models with several HR processes. The information is intended only as a rough template for a possible approach, rather than as a detailed prescriptive methodology. Before presenting ideas for individual HR processes, here are a few more general suggestions:

• Start with processes that aren’t working very well and that, if improved, would have a significant impact on organizational effectiveness.

• Before undertaking a project to completely redesign an HR process, first consider whether simply fine-tuning the current process and then using it more effectively might be a good solution.

• Do a good job in communicating new processes to leaders and employees before they are implemented, so they won’t be perceived as the latest program-of-the-month from management.

• Related to the preceding point, also do a thorough job of educating people how to use the processes. With these kinds of processes, how they are actually used is usually more important than how they are designed.

• Build on programs and initiatives already in place in the organization, and help people see the connections and the continuity, rather than coming out with another new program.

• Look for ways to get employees involved in the redesign effort to help build credibility and ownership (more on this later).

• Keep the HR processes as simple and streamlined as possible, and build in the flexibility so that they can be easily refined and enhanced over time.

• Look for important linkages among the processes—ways they can support one another. For example, training programs have a bigger impact when leaders are positioned to support and reinforce the use of the knowledge and skills on the job.

• Apart from formal programs and processes, look for ways to use the competency models to enhance everyday communications and management practices.

Employee Communications

Aside from changes to particular HR processes, competency models themselves can be a powerful force in clarifying roles and motivating employees when properly communicated and introduced. Essentially, a competency model is a description of the requirements for performance excellence, something most employees would aspire to achieve. Thus, the model can become a basis for self-assessment, as well as motivation to improve in areas important to personal and organizational success. To achieve these ends, however, employees must understand the models and see how they relate to their individual jobs and roles.

Suggested Actions

• Identify which models apply to particular employee groups. In many organizations, employees perform multiple functions, but it is probably better to start with their primary function than to confuse people with too much information at one time.

• Tailor the models as necessary to reflect local business units’ operating practices and procedures. In many cases, only minor revisions are necessary.

• Inform managers and supervisors about the competency models, the plans for communicating them to employees, and the role they will be asked to play in the process. Give them copies of all competency models. Get their input before plans are finalized.

• Put out a general communications piece to all employees about the models, what they are, and how they will be used. Have managers and supervisors reinforce the message points. Build enthusiasm and interest.

• In employee meetings, provide a more detailed explanation about the models (e.g., how they were developed, the different sections, how they will be used). Give employees a copy of the model for their primary function, briefly review it, and solicit questions. Ask them to carefully study the model in preparation for a follow-up meeting to discuss it further and get their comments.

• Conduct follow-up meetings with employees. (Note: The purpose here is to help employees understand what the models mean in terms of how they perform their jobs and to discuss ways of moving the whole organization toward the standards of performance excellence depicted by the models. The purpose is not to continually be revising the models.) Encourage employees to help each other in displaying the behaviors listed in the model. Explain any other actions planned with respect to the models.

• Over time, share other models with employees for other functions they perform or for closely related functions. For example, Auto Travel Counselors might benefit from a better understanding of the role requirements for travel agents.

• Encourage managers and supervisors to periodically discuss and reinforce key elements of the models as part of their ongoing leadership practices.

Recruiting and Selection Programs

Research studies consistently show that even modest improvements in recruiting and selection can have enormous payoffs in terms of costs, turnover, quality of service, and many other measures of organizational effectiveness. Insofar as the competency models describe the requirements for performance excellence, it makes sense to use them in some fashion to improve these key HR processes.

Suggested Actions

• Review the competency models to identify the factors that are most important to select for, versus those things that can be developed after people are hired. For example, basic customer relations skills are much more difficult to develop through training programs than is specific knowledge or a technical skill required on the job.

• Review existing selection processes to identify any gaps between desired information on candidates and what is currently being collected. Look also for areas where additional data or more valid data would be worthwhile.

• Develop and/or source additional tools to help fill in the gaps. Ensure people are well trained in how to use these tools effectively.

• Pay particular attention to the interview phase of the process. Interviews are typically not very predictive of how well people will actually perform. However, they can be significantly improved when behaviorally based questions are used to elicit specific examples of past performance or of specific capabilities.

• Use the Job Context Factors portion of the competency models to help determine the degree of fit between the candidate’s preferences and the actual work environment.

• Follow up on people six to 12 months after hire. Assess their strengths and weaknesses as demonstrated by actual performance on the job, and compare this with what predictions were made about their capabilities at the time they were hired. Use this analysis to reexamine the selection process to see how it might be improved and how better information can be collected in those areas that turned out to be surprises.

In addition to external hiring, the competency models can also be useful in making internal promotion and succession decisions. For example, models for two functions could be compared (current job for an employee and possible new job) to identify the areas of overlap and differences. Then the employee’s capabilities relative to the overlaps and differences could be assessed, in addition to identifying any blind spots (i.e., areas where skill levels are unknown). In the same vein, the models can help employees better understand the skill requirements for other positions before they decide to bid on them.

Feedback and Coaching

In the long run, feedback and coaching can have a much greater impact on performance than training programs, and it is more cost-effective. However, feedback and coaching are often less effective than they could be because of three main reasons: (1) Senior management doesn’t pay enough attention to this part of the leader’s job; (2) supervisors don’t have good feedback and coaching skills; and (3) the feedback and coaching given are too general and not well targeted at the specific behaviors known to be most important. The competency models can help address the last of these issues.

Suggested Actions

• Immediately embed in every manager’s job—from CEO to first-line supervisor—the importance of coaching and providing ongoing feedback to their people. All leaders should be trained in coaching skills as a foundation for continuously raising the talent bar of their people.

• Train leaders in how to use the competency models in the process. (Note: This should not be a one-shot session but a series of modules conducted over a period of time and integrated with other leadership training. Also, it is helpful if the training can be targeted at the specific needs of individual supervisors, rather than assuming everyone needs the same thing.)

• Develop tools to help leaders make their coaching more effective. For example, the behavioral indicators in the competency models could be used to create performance checklists (or enhance those already in use) to use following on-the-job observation. The performance checklists can also be used by employees for self-evaluation.

• Follow up and assess the degree to which leaders are applying good feedback and coaching skills. (A rigorous measurement system is probably not appropriate here, but more of an informal assessment by the supervisor’s manager. Simply paying more attention to, and asking questions about, this part of the supervisor’s job can help drive desired behaviors.) Support and reinforce demonstrated skills and application.

Demarcation

The effectiveness of performance appraisal systems depends much more on how well they are used (hopefully by both leaders and employees) than on how well they are designed. However, the competency models do present an opportunity to reexamine the existing systems and ensure they adequately cover the key competencies. It is beyond the scope of this section to even outline suggested actions for completely redesigning an appraisal system (more on this topic in Chapter 6). Therefore, the suggestions deal only with refining and enhancing existing systems.

Four assumptions are made:

1. An appraisal system is in place, and it meets the basic criteria for a sound design (technical and legal).

2. The system deals with both measurable performance outcomes (e.g., productivity, quality) and skill areas.

3. Managers and supervisors are doing a reasonably good job of using the process.

4. The appraisal system is reasonably well received by employees.

In cases where these assumptions are not correct, organizations should consider undertaking a more comprehensive project than merely fine-tuning the existing system.

Suggested Actions

1. Review the competency models and the current performance appraisal system to identify any additional skill areas to be added (competencies or key behavioral indicators) and potentially any that should be deleted.

2. For any areas that are added, ensure that means exist to measure employees’ performance in the areas. This doesn’t necessarily mean quantitative, objective measures, but something beyond purely subjective opinions by supervisors is needed. In some cases, additional procedures may be required to collect valid data, but make sure it’s worth the time and effort before developing them.

3. Revise the appraisal forms and other documentation as appropriate.

4. Build into the process individual development planning (with a focus on ways to further develop capabilities and improve future performance, rather than just to assess past performance).

5. Get reactions/input from employees before the changes are implemented, and make modifications as appropriate.

6. Do a good job of rolling out the revised system, with plenty of communications and training, if necessary.

7. Monitor the system’s effectiveness (and acceptance) over time, and continue to fine-tune.

Development

Rather than “suggested actions,” the information here is presented in terms of the three general ways the competency models can be used to enhance Development practices in an organization.

First, as data are collected over time on employees’ capabilities relative to the key competencies, new development programs can be locally developed to address identified needs, or current programs can be revised to include material in needed areas. In this regard, the models will also provide a common framework and language for more clearly communicating to the company’s training organization the collective needs that emerge across parts of the organization. This will make it easier for new programs to be targeted at very specific, and commonly understood, knowledge and skill areas.

Second, the competency models provide a fairly detailed framework for diagnosing individual employee’s development needs. This will allow the training to be targeted at the specific needs of individuals, rather than having everyone go through the same program, regardless of need. This approach fits in well with the tailored and individually focused strategy that many companies use, particularly with new employees. The obvious issue, of course, is how to collect valid data on individual employees. The competency models themselves do not solve the problem; they only provide the framework for asking the right questions. Several techniques can be used, such as self-assessment, supervisor ratings using a structured process, multisource assessments (e.g., 360 surveys and feedback), analysis of operational data and member feedback, as well as other more rigorous methods such as a videobased assessment process.

Third, and perhaps most important, the models can be used to help position managers and supervisors to do a better job of supporting and reinforcing the actual application of knowledge and skills on the job, following the training. This topic is also discussed under the earlier section on feedback and coaching. The perennial problem with formal training programs is that very little of what is learned gets translated to on-the-job behaviors. However, when supervisors are told the specific skills that are being developed and exactly what they should look for in terms of behaviors, they can significantly leverage investments made in training and help make the training really stick. Doing this, of course, does not depend on the competency models, but the models can give better focus to the feedback and coaching.

Retention and Turnover Analysis

The competency models can also be used to help analyze turnover problems, which are rather significant in many companies. Two examples are given to illustrate possible approaches. First, follow-up data could be collected from employees who quit to find out the reasons why. Probing questions, based on the job context factors, could be used to discover which of them, or possibly other factors (e.g., pay), were the primary cause. These interviews are normally done via telephone, and they usually yield more honest results when they are conducted two to three weeks after termination. Exit interviews provide much less accurate data.

As a second example, the organization could openly and frankly discuss the job context factors (as well as some of the competencies/behavioral indicators that employees find particularly challenging) in small group meetings. The focus of the sessions would be to identify ways of lessening the impact of some of the more negative aspects of the job. Some of the factors are simply the nature of the job and can’t be changed, but the open discussion can help employees deal with them. These meetings can also alert management to general employee relations issues that may be emerging. (Note: It is critical that sessions like these be conducted by someone with good facilitation skills in order to prevent them from becoming gripe sessions or ending up doing more damage than good. Properly conducted, they can be a very positive experience for employees and have a positive impact on morale.)

Although the topic at these sessions would not be turnover, per se, most employees will be quite open in sharing their likes and dislikes about the job, and management can often get a very clear early warning signal before an undesired voluntary termination occurs. If this situation is surfaced and the individual is highly valued, preventative measures can be attempted. Sometimes even simple interventions can make a big difference, such as increased feedback and recognition.

JohnMattonePartners’ (JMP’s) Process for Developing Competency Models

The traditional methodology for performing competency research and creating the resultant models is based on several key assumptions:

• Every organization has a unique blend of competencies associated with a given job.

• The competencies are patterns of behavior associated with superior performance.

• Current superior performers are the most likely possessors of those competencies.

• Past performance predicts future performance; today’s superior performers will continue to be superior performers based on their current behaviors.

As the rate of change in organizations continues to accelerate, many organizations have recognized that they are putting the organization, its customers, and its employees in jeopardy by basing future talent management decisions (i.e., Deployment—recruitment, selection, and promotion; Diagnosic—assessing competencies and skills; Development—training, coaching, action-learning; and Demarcation—performance management and reward systems) exclusively on those competencies that had been markers of superior performance in the past. In fact, it is my philosophy that the best predictor of future leadership behavior is not necessarily past behavior. Rather, the best predictor is truly a combination of: (1) past behavior and (2) targeted development actions (e.g., training and coaching) aimed at equipping leaders and all employees with the competencies, skills, and “DNA” to execute the requirements of their roles consistent with the future direction of the organization.

The Stealth Competency Mapping Process™ (SCMP)

The Stealth Competency Mapping Process™ (SCMP) is my unique competency-based approach to human performance management, utilizing a highly participative approach involving employees at all levels. Unlike traditional competency modeling approaches, the SCMP methodology identifies the individual and team outcomes that need to be generated in order to meet/exceed customer requirements and achieve the organization’s strategic goals. SCMP then defines the competencies:—Capabilities, Commitment, and Alignment factors (i.e., Leading Indicators)—that individuals must possess to generate those outputs at superior levels. In creating a competency system that is immediately useful, future focused, and connected to critical organizational results, SCMP encompasses each of the elements reflected in the Stealth Fighter Model shown in Chapter 1.

What Are the Benefits of SCMP™?

SCMP offers a fast, flexible, cost-effective way for organizations to align people practices with business needs in order to drive performance throughout the organization. Internal consultants trained by JMP help their organizations to:

• Translate the organization’s strategic business needs and goals into easy-to-use tools. Identify the outputs, individual competencies, and core competencies required to meet strategic business goals through a two-day, cost-effective, and participative process.

• Develop competency models for selected high-impact jobs or roles, typically in a one-day session.

• Customize and integrate Human Resource system applications (learning, selection/membership, output management, assessment and measurement, rewards).

See Exhibit 2.2.

Benefits of the SCMP™ Methodology

• It focuses competency identification on anticipated future needs, not just current identifiers of superior performance. The Stealth Fighter—your organization—will propel itself toward its target (i.e., goals and long-term objectives) to the extent that (1) the target is isolated and identified; (2) the target is retranslated into operating goals and metrics, the individual and team outputs required to meet those goals and metrics, the competencies required to generate those outputs, and the HR systems and tools (the four engines of the Stealth) that must be designed and executed to ensure the organization has the required levels of current and future talent.

• It creates a specific link between critical job outcomes in a specific role and the competencies associated with that role.

• It is broadly participative and thus creates higher levels of employee commitment to the results.

Exhibit 2.2: Sample SCMP Project Plan for Any Organization

PHASE 1: Project Planning

Deliverables:

Finalized approaches/methods

Committed, educated project team

Actions:

1. Select the project team from current leaders who are forward-thinking, committed, strategic, and well known inside the organization.

2. Conduct a working session with the project team in order to:

Provide a brief education for the project team on competency modeling, applications, and the overall project approach.

Agree to the scope of work and clarify assumptions: steps/actions, deliverables, roles, rigor, and timelines.

Review existing competencies, organizational charts, related documents.

Select employees to participate in half-day SCMP focus group sessions.

Select a small group of leaders who have direct management or supervision responsibilities for first-line managers to participate in a focus group.

Review and finalize project plan, including timelines and deliverables.

3. Compile, present, critique, and approve.

Compile information and understanding.

Present a detailed project plan for approval.

PHASE 2: Data Collection and Analysis

Deliverables:

Customized focus group SCMP session and interview guide protocols

Behavioral descriptions to drive customization from gathered data

Draft of competency models with behavioral statements for identified positions.

A team of committed stakeholders across the organization

Actions:

1. Review all relevant documentation, including all descriptions of management roles, responsibilities, performance tools, and the like.

2. Develop interview, focus group, and SCMP protocols based on all gathered organizational intelligence

Conduct Interviews

Determine methods of interviewing:

Telephone, video conference, in person

Panel, sequential, combined

Conduct interviews with “model” employees to establish future focused competencies that represent behavioral and performance ideals.

Interview senior executives to gain insight into their assessment of the current and future requirements for successful leaders.

Analyze interviews using qualitative techniques.

Facilitate SCMP Sessions

Facilitate half-day SCMP sessions with select employees in management/ leadership.

The purpose of these sessions is to engage stakeholders in a participative dialogue/retranslation exercise to identify and agree upon: (1) the Stealth target (the definition of the future desired state); (2) the individual and team intermediate outcomes that will be required of varying levels of management to meet/exceed customer requirements and achieve strategic goals; and (3) the SCMP approach will then translate this dialogue into competencies required to produce superior and differentiated intermediate outcomes.

To create a competency system that is immediately useful, future focused, and connected to critical organizational results, this session will look at the following:

Business challenges: The external conditions driving a changed performance model.

Customers: The key receivers, both internal and external, of the first-line manager’s work

Intermediate Outcomes: The work managers/leaders produce for customers

Competencies: The immediate and Leading Indicators (i.e., Capability, Commitment, and Alignment factors) required to produce intermediate outcomes that, in turn, will drive superior ultimate outcomes (i.e., operating results).

Conduct SCMP Focus Groups

Facilitate a small focus group comprised of (1) managers and (2) incumbents who are confidentially identified as superior.

The purpose of this meeting is to obtain data and a point of view on the role, key requirements, future requirements, and key competencies both from the incumbent and one level above the incumbent.

Analyze and capture data using qualitative techniques

PHASE 3: Validate Competencies and Finalize Model

Deliverables:

Fully developed competency model(s) reflecting competency definitions and behavioral statements for each level of the model

Executive commitment to the new leadership competency models

Communication plan for installing the model in the system

Actions:

1. Conduct facilitated sessions to validate leadership models.

Facilitate validation session(s) to review the customized leadership model. A brief questionnaire may be distributed in advance of this session to assist with validation efforts. This session will include:

An overview of the techniques used to define the competencies and behaviors.

A discussion of what constitutes performance excellence for employees/ leaders and presentation of questionnaire findings (prework).

2. Determine gaps in the competency model based on executive feedback on usefulness of the models.

Review competencies and behavioral statements to ensure transition and developmental progression.

Make final revisions based on validation efforts.

PHASE 4: Finalize Models

1. Finalize models.

2. Finalize success profiles.

3. Finalize job descriptions.