Employee competencies are a complex topic for many C-suite leaders. Are organizational competency models accurate and effective, or do they divert focus away from more critical work? Google found that teams using their framework saw a 20% increase in job satisfaction.
Assessing competencies to determine job success has been a practice for over 50 years. As jobs became more complex, looking at someone’s intelligence or credentials was no longer an effective way to predict job success. Instead, HR teams needed to “break down jobs into their required competencies and assess candidates against them, “ according to a recent article from Egon Zehnder.
Skills-based hiring, or “the how” of doing a job, has become a hot topic recently, although less than 20% of companies are currently using this practice. On the other side of the coin, some companies are focused on “the what” aspect of doing a job, focusing on objective performance measures like sales numbers and productivity rates.
It is safe to assume that past behavior is the best predictor of future performance. However, don’t overlook the potential in your employees. According to the article, “Understanding how emerging and current leaders in your organization do what they do remains the key to differentiating your average leaders from your great ones.” Below is a list of learnings from Egon Zehnder’s work with clients on implementing successful competency models.
Less is More
Using off-the-shelf tools for competency models can result in an excessive number of competencies to measure. These tools are designed to work for as many companies as possible, so they will not be tailored to your specific needs. Instead of using a one-size-fits-all solution, keep your approach focused on no more than five key competencies to achieve positive results.
Made Specific to the Business
Competencies in general may be the same from company to company, but there is nuance and uniqueness to each organization. Company culture is a critical aspect of what makes it a great place to work. Competencies should reflect the company’s culture and align with its strategic priorities, such as customer orientation, operational excellence, or innovative product design.
According to the article, “Competency models typically focus on three dimensions of behavior – business leadership, thought leadership, and people leadership. But what’s most important is that the terminology used is made to be as specific to the organization’s goals and culture as possible. Otherwise, it can become unrelatable and easy to dismiss. Involving key leaders in defining and pressure testing the competencies is a helpful way to combat this.”
Scaled
Rudimentary competency models don’t provide enough context to fully understand what success looks like. Instead, they tend to only provide yes-or-no outputs when reviewing the assessment. This does not enable the company to differentiate the various proficiencies of a competency and assess the growth of individuals.
It’s essential to strike the right balance between scaling competencies and overcomplicating them. According to Egon Zehnder, “We find defining three to five levels typically works well with an individual contributor/people leader/executive as a starting point and depending on the size of the organization and framework for progression. We often see that definitions across the scale are too aspirational, and this becomes a challenge for our clients to be more thoughtful about which competencies they actually need their people to stretch to or not.”
Engagement Starting at the Top
The top talent-producing companies in the world didn’t become that way by employing the best competency models. It’s because their C-suite realized that to sustain strong financial results, they needed strong talent.
One way to achieve this is to develop a common language from the top down, incorporating it into the company’s human resources process. For example, “This could be a rigorous, third-party assessment or 360-degree feedback. It is influential when an organization can communicate that the leadership team has been through this exercise.”
Implemented as a Development Tool
Scaling your competency model is the best way to demonstrate consistent, objective expectations for behaviors, thereby understanding what leadership development looks like within the company. Consider it a roadmap of sorts that can be used by individuals or teams to support development plans and goals, or during reviews when discussing strengths and opportunities.
Per the article, “when Johnson & Johnson implemented a competency-based leadership development approach, managers trained under the model showed a 20% improvement in team performance metrics compared to those who had not been exposed to it.”
Integrated at Scale into People Processes
Once the competency model has been scaled around the five competencies, you will have a tool that can be used for deeper assessment and development of employees at all levels. But this will not be a simple exercise. The competencies will provide a significant amount of information that may be difficult to apply across the entire organization.
Implementing competency models as part of HR people processes may require a scaled-back version to encourage adoption. It might be beneficial to start with one team where a champion for the model exists. This way, you can implement it, get feedback, and make adjustments before rolling it out to the broader organization.
As the article points out, “The purpose of talent reviews is to create a shared understanding of people’s strengths and development areas, agree on appropriate moves/other development actions, and to track progress against them. This does not require “scoring” people on a scale, however, the model can be helpful to compare and contrast people. Instead of asking people leaders to “score” people, ask them to consider people’s relative strengths and development areas with others on their team. Giving them some homework to reflect on their team in terms of the competency model helps them come prepared, which you can reinforce by providing a conversation guide in the talent review.”
Instead of dismissing competency models as time-consuming and unproductive, using the suggestions above can turn them into valuable tools that can enhance employee engagement, reduce turnover, improve leadership effectiveness, and foster a culture of development. When employees are aligned with the company’s expectations for performance, it can transform the experience for both the employee and the company, creating opportunities for growth and mutual benefit.
To learn more about the importance of hiring and developing leaders with strong competencies, reach out to our executive search team.