The task of articulating competencies can be challenging, particularly for management teams who not well versed in the language of competencies can often encounter difficulties when they attempt to articulate competencies.
Yet, (as I am sure the customers who I have worked with recently will confirm) the effort of articulating competencies reaps significant returns for the organisation. Commitment to investing the time and effort to assess the competencies that link to key performance indicators can enhance the organisations competitive advantage.
Failure to invest this time and effort can lead to a lack of specificity, misinterpretation, ambiguity and inconsistency in decisions to develop and nurture competencies of strategic significance.
Characteristics of Competencies
Competencies combine knowledge, skills and behaviours. Competencies capture the sum of knowledge across individual skill sets and organisational units.
The most important strategic resources are the knowledge and skills that an organisation accumulates over time. Fast imitation of these resources is difficult and would entail expensive and time consuming investments in learning and development to replicate. For a competency to be source of sustainable competitive advantage it must be RARE, therefore VALUABLE and difficult or costly to imitate.
Four characteristics help to determine a competencies value as a source of sustainable advantage:
How tacit is the competency?
Tacit competencies are based on intuitive knowledge that cannot be fully articulated. Tacit knowledge is context specific and therefore difficult to imitate. Tacit knowledge is experienced based and resides in someone’s head it is difficult to articulate and enables superior judgement.
Are the competencies robust?
Vulnerable competencies are those that lose value because of changes outside the control of the organisation. Political, economic, and technological changes. Robust competencies are independent of risk from external change and therefore retain their value to the organisation because they are more durable, for example:
A vehicle mechanic may diagnose a problem with an engine using sensory data, until an engine diagnostic machine is purchased which makes that competency less of a competitive advantage.
Is the competency embedded?
Whether a competency is embedded depends on its location in an organisation. Competencies that reside in the knowledge and skills of individual employees are most mobile. These competencies can be lost if the individual leaves the organisation.
Competencies that are embedded in an organisations mission, or culture are highly immobile, competencies that are embedded in employees or systems are easy to imitate while competencies that reside in organisation systems, teams, and culture help a company to maintain a competitive advantage.
For example, the skill of an individual motor mechanic is highly mobile, while the combined skill of an entire formula one pit crew is a less mobile and more embedded competency.
Consensus is Essential
When managers agree on the competencies required for competitive advantage, they are more likely to invest wisely in developing this source of competitive advantage.
This consensus or shared understanding is essential at all levels. Strategic managers should be interested in securing middle managers agreement on those competencies that contribute to strategic advantage since it is middle managers who interpret strategies to lower level managers who interpret them.
Because of their position in the organisation hierarchy, middle managers are key repositories and conduits of valuable knowledge. Middle managers also have significant insight into the strength and application of competencies that strategic managers lack. Therefore they are best placed to identify competency gaps.
Identification of Competencies
Spectrain have a process framework to help individuals in organisations articulate competencies.
Step one: is to identify competencies that are valuable to the organisations industry, this is accomplished through a series of interviews supported by industry research to identify competitor competencies and to ensure that competencies are future focused.
Step two:is where we assess the competencies by asking a sample group of top and middle managers to score for each competency the extent to which the organisation is at a competitive advantage or disadvantage. The average score represents the perceived level of competitive advantage. The variance represents the degree of consensus amongst the 2 management groups.
Step three:entails interpreting the data. Having developed a profile for each competency, we analyse the differences between those competencies rated highly for competitive advantage and those that are rated low. We also analyse those areas where there is significant difference in rating between the two management groups. This competency assessment provides strategic management with a wealth of information about middle managers perceptions about their organisations competencies and hopefully enable decision makers to identify important trends or changes early before committing effort and money to developing competencies that are unlikely to contribute sustainable value.
Interested in developing a competency based approach? All of the organisations we work with have a different starting point and each one simply contacted firstname.lastname@example.org to start that dialogue of articulating competencies or take a look at our competency framework design training course.