Big corporations have been talking seriously about employee competencies for at least the past two decades.  Today even the smallest of small businesses have joined the discussion. Many organizations are dedicating time and resources into identifying essential competencies. Unfortunately, the discussions are often superficial and the final list of required skills often looks like a Chinese menu where managers choose their personal competency – one from Column A, another from Column B.

Because coping with today’s challenges calls for the ability of individuals to tackle complex tasks at an accelerating pace, individuals need a wide range of competencies in order to face the complex challenges of today’s world. The best way to measure performance and predict potential is to assess whether people have key competencies or the potential to develop them. It’s important because research says that high performing individuals outperform average performing individuals by 40-100%. High performing talent management practices provide 30-50% larger returns to the company. High performing teams are 30% more productive than average teams. (Sources-Hunter (1990); Huselid (1995); Spencer (2001).)

Developing a competency model for the 21st century requires a paradigm shift of major proportions. Here are three reasons why many competency models fail to help employers improve performance.

1. Lack of a single definition. Before you can identify core competencies, it’s important that everyone agree upon a definition. When asked to describe the term “competency,” many managers and human resources professionals say “skills.” Others mention abilities, emotional intelligence, knowledge, and proficiency.  These are all part of a competency but individually they are too narrow. A competency is more than just skills. It’s more than just knowledge. Competence goes well beyond the basic reproduction of accumulated knowledge. A competency is an observablebehavior representing a set of knowledge, skills and/or abilities that lead to superior performance. It involves the ability to meet complex demands, by drawing on and mobilizing resources (skills, behaviors, abilities, and attitudes) in a particular context. For example, the ability to communicate is a competency that may draw on an individual’s skill and knowledge of language or technology. But to be effective, the individual’s behavioral style, traits, motives, and values ultimately will affect how effective the individual is. (Translation: competence = knowing what to do + knowing how to use it.)2. Dependence on old competency models.  Peter Drucker once said, “The greatest danger in times of turbulence is not the turbulence, it is to act with yesterday’s logic.”  The same holds true for competencies. Many of the competencies included on lists today are too basic.  A+ performance in these areas will likely result only in mediocrity. Top performance will require abilities at a much higher level.  For instance, this is a well-established competency list for a manager. 

  • Decisive Judgment
  • Driving Results
  • Championing Change
  • Planning and Organizing
  • Managing Others
  • Coaching Others
  • Relationship Management

Managers skilled in these competencies will be good….but will they be great? Will they be able to sustain and grow the company? Up until now, proficiency in these competencies could land an employee in the top job. But moving forward, more advanced skills will be required.  A competency model for future managers might look like this:

  • Innovative Thinking
  • Cognitive Load Management
  • Design Mindset
  • Virtual Collaboration
  • Social Intelligence
  • Situational Adaptability
  • Cross Cultural Competency
  • Computational Thinking

3.  Too many competencies.  A functional competency model isn’t a laundry list of every skill, personality trait, behavior, and value that comes to mind. How to simplify the manager competency model is becoming an important issue.  Based on meta-analysis of research in competency models, “experts argue that eight is the maximum [number of competencies] for managers to assess. (Wu,Lee,and Tzeng – 2005).” Similarly, Ulrich & Smallwood (“How Leaders Build Value”, 2006) identified five common competencies for managers which cover 60-70% future-oriented and personal proficiency.