There is one irrefutable truth: if you don’t change with times, you will not survive. Clinging to an outdated business practice is like staying aboard the Titanic: it might happen slowly, but you are going to sink. If you’re still using competency models in your organization, I have some bad news for you—it’s time to grab a life jacket.
Competency models made sense in the 1990’s. The world was different then - change didn’t happen overnight and jobs were still relatively stable. Businesses could afford time-intensive and static frameworks that helped select and develop people for long-term, unchanging jobs. However, what made competency modeling effective in the past, makes it useless in the present.
Why competency models now do more harm than good:
1. It’s a waste of time and money.
A competency model can cost upwards of $150,000, and can take up to few years to complete (Rodriguez, Patel, & Bright, 2002; Sleezer, 2014). This does not include the loss of productivity as employees are continuously bombarded with panel discussions, forums, interviews, and surveys for the more “tailored” models. These expenses become unjustifiable when we consider how quickly the modern organization can grow and change. For example, Microsoft had to completely redo their leadership competency model after only three years of use because they needed more accurate performance standards (Campion, Fink, & Ruggeberg, 2011).
2. They are static and inflexible.
Competency models identify the general KSA’s (knowledge, skills, and abilities) that are necessary for successful performance within a certain type of job. This is not useful in a market with quick flux, fluid responsibilities, or a lot of growth. Job tenure is a thing of the past (Greenhaus & Kossek, 2014), and many employees now bring a diversified skill set to the table. Competency models only work if their target stays the same every year, which simply isn’t the case in today’s network organizations, hybrid businesses, heterarchies, or organizations that continuously improve their standards for performance (Battilana & Lee, 2014).
3. They represent no single job.
Competency modeling is ultimately an attempt to identify dimensions of performance that are applicable across different roles and situations (Rodriguez et al., 2002). While this may be helpful in a general sense, most organizations use off-the-shelf models that fail to incorporate the actual people, culture, or environment in which the job occurs. When we take into account that competency models are often used for selection and compensation decisions (Campion et al., 2011), the legal defensibility of these models becomes questionable. At best, competency models collect dust on a shelf because the results don’t speak the organization’s language or represent their unique needs. At worst, they become a liability for the organization’s entire talent management system.
Starting to panic? Don’t worry, we have a solution. If competency models are a slow and ancient sinking ship, then strategic priorities are your rescue boats. It’s time to return competencies and similar “HR speak” to the social sciences and focus on what matters to the business – achieving its strategy. No executive cares if her employees excel in analytical thinking or emotional intelligence. What she wonders is whether her teams can improve customer satisfaction or increase operational efficiency.
Strategic priorities are a solution to the competency modeling problem.
1. Right capabilities at the right time.
It takes a different set of skills to build new products and a different set to drive efficiency. However, depending on your particular laundry list of competencies, only one type of candidate would be hired or promoted resulting in a misfit between the strategy and the leader’s capabilities. Organizations need employees with various skillsets, in different units or at different points in time. Focusing on the strategy lets you zoom in on the right capabilities when they matter to the business. Find out how to identify high-potential employees based on strategic priorities in my previous article.
2. Quickly react to changing market conditions.
The recent bust in the oil industry highlights just how quickly markets can change. Overnight, many companies were forced to shift their strategy from booming growth to sharp cost cutting and out goes the competency model. As the organization reacts to the new market, its objectives shift, and different skillsets are necessary. A new competency model would take 6-12 months and another $100,000. By the time it’s finished, the market has probably shifted again a few more times. If you focus on strategy, you can quickly deploy the right talent into key position; read about how to tie the 9-box grid to strategy here.
3. Be understood.
If you want your message heard, it is crucial to tailor your language to your audience (Bendapudi & Bendapudi, 2009). HR has attempted to bring the language of social sciences into business and failed, perhaps because no executive could understand whether a candidate “scoring high on analytical thinking” could achieve the strategy. Imagine saying instead that the candidate is ready now to enhance efficiency of operations.
Humanity keeps many relics and some even increase in value over time. Unfortunately, competency models are not collectors’ items, they are a sinking ship. The quicker you can abandon them, the quicker you become a well-respected strategic business partner. Thank you, social sciences, for letting us borrow your lingo; you can take it back now. We are focusing on what matters to the business leaders we support – achieving their strategic goals.
References
Battilana, J., & Lee, M. (2014). Advancing research on hybrid organizing–Insights from the study of social enterprises. The Academy of Management Annals, 8(1), 397-441.
Bendapudi, N., & Bendapudi, V. (2009). How to Use Language That Employees Get. Harvard Business Review, September, 212-214.
Campion, M. A., Fink, A. A., Ruggeberg, B. J., Carr, L., Phillips, G. M., & Odman, R. B. (2011). Doing competencies well: Best practices in competency modeling. Personnel Psychology, 64(1), 225-262.
Greenhaus, J. H., & Kossek, E. E. (2014). The contemporary career: A work–home perspective. Annu. Rev. Organ. Psychol. Organ. Behav., 1(1), 361-388.
Rodriguez, D., Patel, R., Bright, A., Gregory, D., & Gowing, M. K. (2002). Developing competency models to promote integrated human resource practices. Human Resource Management, 41(3), 309-324.
Sleezer, C. M., Russ-Eft, D., & Gupta, K. (2014). A Practical Guide to Needs Assessment. John Wiley & Sons.
