What Is the Value of a Competency Model?

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Consider a CEO starting a new company. The CEO has a long-term vision (three to five years) of what goals to accomplish. There also is a COO who identifies how to accomplish these goals, one year at a time. The COO must translate this plan to determine which employees must perform what tasks in order to achieve each goal.

Consider a CEO starting a new company. The CEO has a long-term vision (three to five years) of what goals to accomplish. There also is a COO who identifies how to accomplish these goals, one year at a time. The COO must translate this plan to determine which employees must perform what tasks in order to achieve each goal.

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By way of an example, if this were a company that was going to make a flying car, the CEO’s long-term goals might be 1) to establish a flying car as a viable transportation vehicle, 2) achieve sales of 100,000 units in three years, and 3) drive the price down from an introductory early adopter price, to an end purchase price of $50,000. The COO would need to hire:

By way of an example, if this were a company that was going to make a flying car, the CEO’s long-term goals might be 1) to establish a flying car as a viable transportation vehicle, 2) achieve sales of 100,000 units in three years, and 3) drive the price down from an introductory early adopter price, to an end purchase price of $50,000. The COO would need to hire:

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  an R&D department to develop it

  an R&D department to develop it 

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  a manufacturing department to build it

  a manufacturing department to build it 

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  a distribution department to get the cars to market

  a distribution department to get the cars to market 

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  a sales and marketing department to sell it

  a sales and marketing department to sell it 

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  a service department to service the cars once on the market.

  a service department to service the cars once on the market.

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Everyone would have an intermediary goal that, if accomplished, would lead to the achievement of the company goals—and the long-term strategy.

Everyone would have an intermediary goal that, if accomplished, would lead to the achievement of the company goals—and the long-term strategy.

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As the organizational leaders drill deeper, the skills become more specialized, until they get to a specific person performing a specific role such as an R&D engineer. To ensure that each R&D engineer can help the company, it has to define what skills this role must be able to do really well. This is the competency model for this job.

As the organizational leaders drill deeper, the skills become more specialized, until they get to a specific person performing a specific role such as an R&D engineer. To ensure that each R&D engineer can help the company, it has to define what skills this role must be able to do really well. This is the competency model for this job.

Value of a Competency Model

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A competency model defines what separates “good” from “great.” Not everything a person does in a role should be part of the competency model. For example, any engineer must be able to perform engineering design functions, but a great engineer can work with other R&D engineers to troubleshoot design issues before they reach manufacturing.

A competency model defines what separates “good” from “great.” Not everything a person does in a role should be part of the competency model. For example, any engineer must be able to perform engineering design functions, but a great engineer can work with other R&D engineers to troubleshoot design issues before they reach manufacturing.

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In essence, the value of a competency model is that it identifies what skills each person in the company must be able to do to be “great.” If everyone performs at the “great” level, then company strategy is achieved, and a company is likely to have a competitive advantage.

In essence, the value of a competency model is that it identifies what skills each person in the company must be able to do to be “great.” If everyone performs at the “great” level, then company strategy is achieved, and a company is likely to have a competitive advantage.

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Companies have always needed to create competitive advantage. So, a competency model has always had value. Here’s what is different today:

Companies have always needed to create competitive advantage. So, a competency model has always had value. Here’s what is different today:

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  The pace of change has accelerated—and with it, the skills required to be successful continue to change.

  The pace of change has accelerated—and with it, the skills required to be successful continue to change. 

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  To survive today, companies must continuously innovate, which only increases the changing skills required.

  To survive today, companies must continuously innovate, which only increases the changing skills required. 

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  People stay in the same job for less time and, therefore, people need to be able to become “great” without as much experience as they had in the past.

  People stay in the same job for less time and, therefore, people need to be able to become “great” without as much experience as they had in the past. 

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  New workers entering the workforce want to be able to make an impact more quickly; they want to know how to be “great” right away and are motivated to get there.

  New workers entering the workforce want to be able to make an impact more quickly; they want to know how to be “great” right away and are motivated to get there.

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If you don’t know what skills are required to be “great” (that is, you don’t have a competency model for each job), how can you innovate, keep up with a changing global environment, maximize your human capital, and motivate employees to stay?

If you don’t know what skills are required to be “great” (that is, you don’t have a competency model for each job), how can you innovate, keep up with a changing global environment, maximize your human capital, and motivate employees to stay?

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What’s more, competency models drive intrinsic motivation to succeed. Research shows that the desire for competence makes people want to own their development. You need only show them what it looks like to be competent in their role… and that’s a granular, actionable competency model.

What’s more, competency models drive intrinsic motivation to succeed. Research shows that the desire for competence makes people want to own their development. You need only show them what it looks like to be competent in their role… and that’s a granular, actionable competency model.

Why Creating Competency Models Rapidly Is So Important

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Let’s say you now believe that you need competency models for your jobs. Why is "rapid development" so important? Why not create competency models the way they have always been done, with interviews and questionnaires and lots of analysis?

Let’s say you now believe that you need competency models for your jobs. Why is "rapid development" so important? Why not create competency models the way they have always been done, with interviews and questionnaires and lots of analysis?

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If it takes six months to create a competency model, by the time you’re done, it’s out of date. The pace of change means we need to take a different approach—an agile approach. It’s time to take a page from a philosophy such as The Lean Startup by Eric Ries.

If it takes six months to create a competency model, by the time you’re done, it’s out of date. The pace of change means we need to take a different approach—an agile approach. It’s time to take a page from a philosophy such as The Lean Startup by Eric Ries.

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So how can you do that? Here’s a process that works for us.

So how can you do that? Here’s a process that works for us.

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Start with a four-hour workshop with high performers, during which you gather all the requisite information including how they learned to do what is most important for success in their roles, as well as what tools support them today. Next, massage that information and redistribute it quickly to participants for validation. Then, you use what they provided to get to the next level of detail. Finally, you validate that with participants. Now you’ve got your model.

Start with a four-hour workshop with high performers, during which you gather all the requisite information including how they learned to do what is most important for success in their roles, as well as what tools support them today. Next, massage that information and redistribute it quickly to participants for validation. Then, you use what they provided to get to the next level of detail. Finally, you validate that with participants. Now you’ve got your model.

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If you’re interested in learning about how to build your own competency models rapidly, including making it actionable and driving innovation at your organization, join us for the webinar “Develop an Actionable Competency Model in Weeks” Thursday, November 5 at noon EDT.

If you’re interested in learning about how to build your own competency models rapidly, including making it actionable and driving innovation at your organization, join us for the webinar “Develop an Actionable Competency Model in Weeks” Thursday, November 5 at noon EDT.