Posted on 31 May 2020
In his book Good to Great, Jim Collins tells the stories of businesses that have made the leap from a good company to a great company – ones that produce above the bar results, year in, year out. He makes the point that great companies place higher value on character attributes and behaviours than on academic qualifications, technical ability or work experience. Specialist knowledge, educational background and a track record are clearly relevant, but behaviours, or competencies, such as integrity, resilience, work ethic, and creativity, are deeper rooted, and it is these that drive performance.
How it feels to have the ‘right people’ in your business
With the right people, companies are more agile; they can easily adapt to a changing world because their employees, and particularly the management team, have a can-do attitude and they operate as a cohesive unit to achieve the desired outcomes for the business as a whole. Natural drive and determination are part of their DNA, so by having people like this on board change happens more quickly and will be executed more effectively because they instinctively want to play a part in creating something great, and they do not want to fail.
How to know the right people when you see them
A competency framework, when done well, defines how the right people behave at every level of the business, and establishes a clear link between individual and business performance. Competencies effectively act as a key performance indicators of the benchmarks of behaviours and actions that are required, valued, recognised and, in some cases, rewarded, at each turning point in the hierarchy, from individual operator to Director.
Characteristics of a good competency framework
A competency framework must be understandable and fit for its intended purpose. Always start with the end in mind by defining the competencies according to the business strategy, and not the other way round, because the behaviours necessary for a start-up, for example, will be very different to those relevant to a more established business.
A good competency framework needs to be:
- Clear and easy to understand and reflect the language of the business
- Relevant to all the people to whom it applies, i.e. job holders should have a clear understanding of the competencies required for effective performance in their role and they need to be able to connect how they are applied in the business
- Flexible in order to take account of expected changes, i.e. the framework should be built with the medium-term future in mind otherwise it will quickly become obsolete
- Behaviour based and exclude personal characteristics such as knowledge and skills because having the right skills or experience does not mean an individual has the ability to apply them effectively
- Built on discrete elements with no dependencies or overlaps between competencies
- Fair to all and rule out bias.
Putting competencies to work
Competencies typically form the foundations of core HR processes. The most popular applications are:
1. Talent Acquisition: Research shows that companies that use competencies are more likely to have better recruitment processes and are able to fill key positions quickly and effectively. Critically, those new to the company integrate more quickly and are better equipped to meet business needs.
2. Learning and Development: Competencies provide the framework to inform career paths and they give managers a basis for giving feedback and identifying training needs.
2. Succession Planning: Competencies provide standards against which individuals—across the company—can be assessed, and with this information, companies can pinpoint gaps before it is too late and negatively impacts business results.
3. Performance Management: Competencies provide managers and employees with a common language that spells out the how’s. Without them, there is a tendency for performance to be measured too heavily on the what’s – outcomes and objectives, without any focus on how the results were achieved.
4. Culture: Competencies help make the company values tangible. For example, to create a culture of innovation, a competency framework would describe the behaviours essential to driving innovation. Without a well-defined description of what innovative behaviour and thinking, looks like the target would be too vague and very likely missed completely.
To find out more about how a competency framework could help to drive performance in your business, get in touch!