POSTED | BY BARBARA BOWES
Researchers as early as the industrial age have strived vigorously to identify and define that ever elusive link between employee productivity and organizational performance. In fact, it wasn’t until 1973 when a proven “productivity – performance” link was finally identified and named.  This was accomplished by David McClelland, a Harvard University professor who created and applied what he referred to as a “competency model” to successfully distinguish superior from average performers
McClelland’s competency model and theory was an instant success and was immediately applied to the US Navy. As one might expect, large manufacturing companies such as General Electric and Edison Engineering were also focusing on how to create a competitive edge and quickly sought out McClelland’s competency model to help distinguish their high performers.
By 1994, McClelland and his team were consulting and working with L’Oreal, the world’s largest beauty and cosmetic company. On this assignment, McClelland applied his model to identify key competencies for the recruitment and selection of high performing sales people. His research definitively demonstrated that role specific, objective measures based on competencies resulted in the success of L’Oreal’s sales professionals achieving their quota in the very first year 85% of the time.
Today, some forty years later, the use of competencies in some capacity or other has become more popular within all types of organizations.
In fact, a recent Career Partners International survey of nearly 1000 individuals revealed that approximately 63% of respondents are currently utilizing competencies either moderately and/or extensively in their organizations.
Having the capability to determine high performers from average performers is even more important for organizations in today’s global economy where cultural sensitivity, resourcefulness, agility and good decision making is critical. Therefore, the goal for any organization is to strive not only to outperform their competitors in “real time,” but to outperform them for “extended” periods of time.
According to the Institute for Corporate Productivity (i4cp), a leading research and member-based think tank, research and benchmarking involves identifying the Human Capital practices used by high-performance organizations, those that outperform their competitors in revenue growth, market share, profitability and customer satisfaction. As i4cp states, “We want to learn from the best, not just use the average or the most popular methods!”
While outperforming a competitor is certainly a desired goal, the question most individuals might be asking is, “how do high performing organizations accomplish such sustained success through applying a competency model?”
The answer lies in understanding the power of competencies, how to create competency models, and how to integrate competencies throughout the entire talent management spectrum. So, where does one begin?
Let’s start with a simple definition of a competency. In The Talent Management Handbook , Lance Berger (author and editor) defines a competency as “a reliable, measureable, enduring characteristic of a person that causes and statistically predicts a level of performance.” A common example of a competency that’s found in most organizations is the “achievement orientation” competency. Berger defines this as:
“Targets and achieves results, overcomes obstacles, accepts responsibility, establishes standards and responsibilities, creates a result oriented environment and follows through on actions.” 
However, what’s extremely important in the identification process is to identify those organizational competencies that are proven to “drive” performance and produce results.
For instance, in researching organizations that sustained success for 25 years or more, Berger found seven key factors that led to longer term organizational success. These included elements such as developing a performance-oriented culture and/or ensuring high employee satisfaction. However, the most critical factor for sustainable success was the institutionalization of competencies in both employee selection and in performance management.
Our recent Career Partners International survey suggests that most participants are indeed seeing the value of applying competencies throughout their talent management system and seem to be “on top of it” as noted in the following poll results where individuals selected all options that apply to their organization.
At the same time, Career Partner International consultants have also encountered situations where inexperienced managers fail to identify, connect and leverage their competency drivers for high performance thus losing the value of a competency model they may have developed. When this occurs, the competency approach may have little or no proven relevance to organizational success and sustainability.
What then might a typical competency “driver” be? We turn once again to the Institute for Corporate Productivity’s (i4cp) survey research which includes over 500+ organizations, many of which are Fortune 500 companies.
I4cp’s 2011 research identified five key competencies necessary for leaders to be successful in today’s global economy. These included:
- Critical Thinking – problem solving, decision making and strategic and creative thinking
- Leadership – creative vision, enrolling and empowering others as the top two competencies
Strategy Execution, Leading and Managing the Next Generation of Talent and Leading Change were also identified as priorities.
With succession planning and the development and quality of upcoming leaders being on the forefront of our minds, it’s disconcerting to also learn through i4cp’s 2011 research that those very skills needed for future success are considered the most lacking in the next generation of leaders.
The Career Partners International poll of June 2013 reinforced the i4cp research results of competencies that are lacking in future leaders as noted in the poll results below where individuals selected all options that apply to their organization.
Since the next generation of leaders will hold responsibility for driving success in the future, the message to organizations is loud and clear; be sure to create an executive development program that guarantees a quality supply of new leaders.
But, how does one go about identifying their corporate competencies, their particular business drivers?
Typically, there are four fairly straightforward approaches. For instance, a customized approach, which typically is conducted with the assistance of an external consultant, could include interviewing a selected group of superior performers to identify the key drivers of success. The methodology might also include an internal panel of incumbent experts or a review of critical incident reports.
A second popular strategy is to utilize tools considered “off the shelf” which can be applied to any organization. This typically includes sets of cards with competency definitions, quick and easy downloads or special assessment tools offered by various competency consulting firms.
A third methodology is to simply recycle the various competency dictionaries publicly available on the internet, selecting the competencies that are similar and applying them to the organization. While this may be the easiest to accomplish, it is usually the least effective methodology.
Finally, as noted in the Career Partners International poll, many organizations are using a combination of all four methodologies. For instance, they may undertake a job analysis, identify the competencies and then adapt a definition from their research rather than creating their own.
However, no matter which strategy is selected to identify the competencies and develop unique definitions, in all cases the data must be confirmed for reliability and include only those competencies that really matter to the success of an organization.
From this point on, the next step is to create a competency model for your organization. This model is a collection of the competencies that all together define what successful performance looks like in your organization. The statements are then arranged in a hierarchical order from simple to complex.
One key benefit of a competency model is that it can demonstrate a direct link to business strategies and enable organizations to identify their current and future state with respect to the supply and demand of internal staff resources. This then enables management to link competencies with all of the talent management requirements including recruitment and selection, assessment, training and development, succession planning and performance management.
As a result of the complexity of the process and for the greatest results on long-term success, it is highly recommended that companies work with external professionals who possess proven expertise in this arena.
While identifying competencies, developing competency models and linking them to the business strategy are key to long-term success, the sustained and institutionalized application of competencies for recruitment, selection and performance management have been proven to bring about sustained success.
As a result, organizations will now need effective recruitment and selection tools with which to identify high performers who fit the identified “driver” competencies. So, how do successful organizations go about this task?
The US-based firm of h.h. gregg, a leading and fast growing retailer of home appliances and consumer electronics, is a prime example of the success a competency model accompanied by effective assessment tools can bring to an organization within a relatively short timeframe.
With a strategic business plan focusing on exponential growth, h.h. gregg needed to move away from a transactional approach to its human resource strategies and build a recruitment and selection capability and process that would ensure the attraction of high performing individuals.
The h.h. gregg competency journey, led by Charles Young, Chief Human Resource Officer, began by working with Mark McNulty of HR Dimensions/Career Partners International – Indianapolis.
McNulty researched current processes and highlighted deficiencies that needed to be overcome. Next, 16 top corporate officers were interviewed and the future corporate culture defined. The key competencies required to sustain this desired culture were discussed and agreed upon by the senior leadership team. The result was the identification of nine specific competencies, complete with development of the unique h.h. gregg specific definitions for each.
The next step in the h.h. gregg journey was to develop an assessment center, a process to assess all director and officer candidates for upcoming roles within the organization. A special job order guide was developed to ensure process consistency since different managers engaged in the various interviews. Proprietary software, producing behavioral interview guides, was developed to structure and standardize the recruitment and selection process.
A very comprehensive evaluation process was then established. This process includes cognitive, behavioral/leadership and conflict resolution style assessments, a behavioral interview by a team of experts, a business simulation and role play. Finally the assessment scoring reports enabled a compilation of management and consultant views so the company could make more informed final decisions.
Over two years into the implementation of its competency modeling project, h.h. gregg is experiencing excellent results. The selected competencies are now driving business growth; the recruitment and selection process has much more rigor and there are multiple data points facilitating objective and better hiring decisions.
As Charlie Young, Chief Human Resource Officer of h.h. gregg, states, “The competency project has successfully moved us away from a transactional approach to a truly integrated talent management approach that is already bringing significant benefits to the company.”
While David McClelland, the former professor at Harvard University, initially demonstrated the use of competencies, today’s research and corporations such as h.h. gregg continue to confirm that competencies are indeed the DNA of high performance and long term, sustained success.
About the Author
Barbara Bowes is president of Legacy Bowes Group, the Career Partners International firm based in Winnipeg, Manitoba, Canada. Barbara is an HR professional, author, news columnist and radio host with more than 25 years of experience in the talent management and is regarded as a leading authority in the field. Her popular “Working World” column appears every Saturday in the Careers section of the Winnipeg Free Press and she is a regular contributor to the Manitoba Business Show on CJOB in Winnipeg. Barb is a member of Canadian Association of Professional Speakers and is a certified Coach Practitioner as recognized by the Certified Coaches Federation. For additional information, visit www.legacybowes.com and www.barbarabowes.com.
About Career Partners International
Career Partners International is one of the world’s largest providers of talent management solutions with more than 200 offices in over 40 countries around the world. Organizations of all sizes turn to Career Partners International to successfully assess, engage, develop and transition talent using the expertise of more than 1600 highly-skilled experts in the areas of assessment, coaching, leadership development and outplacement. Additional information can be found by visiting www.cpiworld.com.
Career Partners International helps organizations around the world integrate competencies into their talent management practices. For additional information on this or other talent management solutions, please contact your local Career Partners International firm.