Using competency modeling for competitive advantage with greater value

A short strategic paper on how the Competency Framework can be used to advantage business strategy and directions

Background

The development of core competencies for a company basically has two major managerial benefits:-

  • They provide a method for describing the effectiveness of an organization in a common way. This will help the company to develop a consistent view of what good strategy planning means in relation to past achievement and future goals, or what effective management of information and knowledge is about to achieve future intentions.
  • They provide an opportunity to achieve a level of consistency when examining performance. External assessors will be able to recognize good performance in a accepted consistent and standardized way .
This short paper touched several basic angles of competencies. One approach can be skills based and the other is output based. The former can be used to assist in assessing work results, pinpointing development needs, developing training programs and monitoring individual progress. At the present time a set of task based competencies for using assessment data needs to be defined along with personnel based task competencies. The latter provides a benchmark for assessing tangible work performance and identifying areas for potential development. In developing the framework for organizational competency, plans and approaches should be made to provide for future developments and longer term sustainability.

The world we lived in

Connolly and Bruner (1974) suggest that competence is not just one's capacity to interact effectively with his or her external (work) environment, but is also the ability to change one's personal environment. Therefore competencies are to be divided into three separate domains described as “Learning to Work” , “Learning to Learn”, and “Learning to Live” , with specific competencies and criteria listed within each domain.

They are factly composed of the three domains (i.e., career, educational and personal-social ) and its own delivery systems (i.e., performance management, guidance curriculum, individual planning, responsive services, and system support). The competencies factors can then be scheduled under separate categories (i.e., self-understanding, global and social understanding and skills, decision making, intellectual development, school world understanding, understanding personal economics, task skills and marketability, work world understanding, and leisure time planning). The categories are then prioritized from time to time to meet the developmental needs of the learner.

Overall, the company' efforts are primarily directed toward designing a "process" for developing, implementing, and achieving goals based on the attainment of certain incumbent competencies within a developmental structure. The envisioned "outcomes" of the process are fully functioning employees who are capable of self motivating, self-understanding, planning their lives, and successfully implementing them.

The nature of Competence

There are several perspectives on the nature of competence. Those generally used in the reference documentation and in professional work practice normally marry the general attributes (knowledge, attitudes and skills) in an integrated approach to realistic tasks. These attributes are used in combination to bring together disparate things (abilities of individuals derived from combinations of attributes) and the tasks that need to be performed in particular situations (Gonczi, 1994). They also incorporate professional judgment.

A good set of competency standards will provide a clear statement of what is considered to be important in competent performance for the workforce (Hager, 1992). Partial demonstration cannot be considered adequate.

While the relationship between competency standards and development curricula needs to be flexible, the relationship should be one of overall coherence of an development program and the competency requirements required by an occupation. If curricula are conceived this way, it will be possible to overcome some of the fragmentation and lack of integration that currently characterize aspects of the initial education and training of employees.

The use of competency based standards enables competence to be achieved in a recognized way. Clear company standards help to maintain management and stakeholders confidence, and give occupational groups a clearer understanding of their work and what constitutes good practice (Gonczi, 1994). Relationships with other occupations are also clarified. Their use potentially provides a more rational basis for initial and continuing education and for objective assessment of achievement (outcome) in the work setting. Emphasis can be applied to the application and synthesis of knowledge and the creation of:

Value Firms are able to create value through either decreasing product/service costs or differentiating the product or service in a way that allows the firm to charge a premium price.
Rareness Value in the human resources is only beneficial when it is not readily available or a competitor will be seriously disadvantaged if he does not possess that characteristic.
Imitability In order to sustain the advantage that rareness and value offer, competitors must need to find it hard to replicate.
Organisation In order for any characteristic to provide a sustained advantage, the firm must be organized to exploit the resource.

Capitalizing on Competence

Emphasis can be applied to the application and synthesis of knowledge and the integration of theoretical and practical knowledge in professional judgments. With the inclusion of the appropriate attitude and behavior nurturing, this is the heart of successful competence practice. Competencies and their performance criteria, should not be used as an unqualified checklist, on their own Because each competency relates to another, the set of competency standards needs to read as a whole. The performance criteria then provide guidance and background for the corporation on what are considered the important components for competent practice in their workforce .

Core Competencies

In corporate minds, broad business perspective competencies relate to the context in which professionals perform their services. Individuals preparing to enter their profession or work, should consider both the internal and external business environments and how their interactions determine success or failure. They must be conversant with the overall realities of the business environment. From a corporate viewpoint, the clusters below can form the nucleus of determining needed core competencies :

Strategic/Critical Thinking

Critical thinking encompasses the ability to link data, knowledge, and insight together from various disciplines to provide information for decision-making. Being in tune with the "big picture" perspective is a necessary component for success. Individuals should be able to communicate to others the vision, strategy, goals, and culture of the organization.

Corporate benefits seeked:

  • Ability to articulates the principles of the strategic planning process
  • Ability to identify strengths, weaknesses, opportunities, and threats associated with a specific scenario, case, or business activity
  • Adept in Information gathering, as it identifies and gathers data from a wide variety of sources to provide insightful interpretations for decision-making
  • Able to transfer and compare knowledge from one situation to another
  • Analyzes and prepares strategic information (e.g., market share, customer satisfaction, competitor actions, product innovation, etc.)
The Industry/Sector Perspective

Individuals should be able to identify (through research and analysis) the economics accounting and broad business financial risks and opportunities of the industry and economic sector in which a given organization operates. Identification of these risks and opportunities should include both issues specific to the enterprise, as well as those pervasive throughout the industry/sector.

Corporate benefits seeked :

  • The ability to identify the economic, broad business, and financial risks of the industry/sector
  • Able to define and articulate an organization's key competitive advantages and disadvantages
  • Able to recognizes market forces that make the organization to use the opportunity for merger, acquisition, strategic investment and/or strategic alliance
  • Understand and able to communicate the financial and non-financial performance of the organization's operational processes
The International/Global Perspective

Individuals should be able to identify and communicate the variety of threats and opportunities of doing business in a borderless world. The professional of the future must provide services to support and facilitate commerce in the global marketplace.

Corporate benefits seeked:

  • Able to analyzes the cultural and financial impacts of moving into new markets, and expanding existing markets
  • Considers global consequences of human and financial resource management
  • Analyzes global customer demographics
  • Identifies and analyzes the social costs and benefits of relevant decisions in the global marketplace/environment
Resource Management

The ability to appreciate the importance of all resources (human, financial, physical, environmental, etc.) is critical for success. Individuals should be able to apply management and human resources development theories to human resource issues and organizational problems. Individuals should be able to identify sources of capital, and analyze the impact of participation in the global capital markets.

Corporate Value seeked:

  • Able to articulates how resource availability affects the organization's business functions, processes and administrative procedures
  • Identifies both traditional and non-traditional performance criteria and measurement methods by selecting appropriate success factors and measures of their achievement (see functional competencies)
  • Articulates how organizations make decisions to allocate scarce resources, including recognition of both quantitative and qualitative constraints on these decisions (Specific examples include decisions regarding capacity and resource utilization.)
  • Identifies and addresses the social costs and benefits of business decisions and evaluates the fiduciary performance of public sector and not-for-profit management
  • Identifies the effects of market forces on organizations' costs of capital, labor, commodities, etc.
  • Analyzes the implications of an organization's lack of access to supply sources, financial markets, and intellectual capital (barriers to entry, expansion, or survival)
  • Facilitates analysis of the organization and the application of continuous improvement principles to the organization
The Legal/Regulatory Perspective

Regulatory forces are being shaped by collaboration, migration, and reform as the various stakeholders globalize, share information, and force their particular needs and viewpoints onto political agendas. Professionals within this scope need to be capable of describing the legal and regulatory environment and analyzing the impact of changes in relevant requirements, constraints, and competitive practices.

Corporate benefits seeked :

  • Describes and masters the legal and governmental/regulatory environment in which entities operate and the significant costs and benefits of regulation
  • Analyzes potential threats and opportunities for the organization from changing legal requirements
  • Identifies and explains the political and environmental forces impacting both the standard setting process and the regulation of the profession.
  • Recognizes the dynamic nature of political and environmental forces and their implications for organizations and the ways in which they operate.

The Marketing force and Client Focus

Individuals who are marketing- and client- focused are better able to anticipate and meet the changing needs of clients, employers, customers, and markets. This involves both the ability to recognize market needs and the ability to develop new markets. Corporate Value seeked:

  • Identifies factors that motivate internal and external customers to enter into relationships or continue doing business with an organization
  • Recognizes and understands employer/client protocol and expectations
  • Builds good working relationships
Leverage Technology to Develop and Enhance Business Perspective

Technology alters how organizations operate. To provide the greatest value, today's professional must understand and appreciate the effects of technology on the broader business environment.

Corporate benefits seeked:

  • Able to recognizes commonly used production technology and technology information architectures
  • Able to recognizes business opportunities and risks associated with mechanization and electronic commerce
  • Mines electronic data sources for production, business and industry information . Able to use it for future benchmarking of the organization
  • Uses technology to develop and present strategic information and approaches

The Competency Framework:

The framework shall consist of a set of requisite competencies for all professionals to enter and support the newly envisioned corporation. In this respect , competencies are categorized as functional (technical competencies most closely aligned with the value contributed by i.e. accounting professionals), personal (individual attributes and values) and broad business perspective competencies (relating to understanding of internal and external business contexts).

The factors can range from several to many and clustered around the projected benefits needed, amongst them they are such as but not limited to : Conceptual Thinking, Analytical Thinking, Information Gathering, Problem Solving & Decision Making , Concern for Order and Quality, Integrity, Organizational Awareness and Commitment, Initiative Taking, Team leadership ,

References

1 K. J. Connolly and J. S. Bruner (Eds.), Competence: Its nature and nurture. The growth of competence. 1974, London: Academic Press.
2 Gonczi, A. 1994. An integrated competency approach to professional education and assessment. (unsourced).
3 Hager, P. and Gonczi, A. 1992. Competency Based Standards: A boon for continuing professional education? . Studies in Continuing Education. 13(1): 24-40
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