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How Does A Company Determine Which Competencies Are Truly Core Competencies?

Several studies have focused on identifying the various competencies that predict success, both in organizational life in general and in specific jobs or job families. My firm, Grote Consulting Corporation, has identified thirty specific competencies, based both on formal research (several of the research studies are described in my book, The Complete Guide to Performance Appraisal) and on thirty years of experience in helping organizations develop effective performance management systems.

There are many lists of competencies. Each list contains dozens of traits/skills/attributes—competencies—that can be picked over to identify the small number that are critically important. Whatever the source and number of competencies, the use of a competency process as part of an organization’s performance appraisal process begins with the organization’s choosing a small number of critical competencies out of dozens that are available. So the first step in the process is making up a big list of all of the potential competencies, then narrowing that big list down to the critical few.

Hot Tip

Who decides which competencies will be selected? The top brass does. Senior managers are charged with developing the organization’s strategic plan and assuring its successful completion. Therefore, they’re the ones who must make the decision about which competencies are the most important to achieve that strategy.

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Here’s a step-by-step process for developing core competencies that will work in almost any organization:

1. Get a list of competencies. Make one up, buy a list, take one from various published competency lists. It doesn’t matter. What does matter is that it be reasonably complete, containing all of the various traits, attributes, or skills that people in your organization might consider to be important.

2. Make sure it’s complete. Show the initial list around. Ask people if there’s anything obvious that’s missing. Add everybody’s ideas to the list regardless of quality. The weak sisters will be filtered out later.

3. Write master-level descriptions. For each competency you’ve identified, write a description of what a master performer would do in this area. Here’s a key point: You are not writing competency definitions. You’re not trying to define what the term means. Instead, what you are writing is a description of what somebody who’s really terrific in this area is likely to do that ordinary folks don’t do. Think about someone who genuinely is a model of interpersonal skills, or is the acknowledged expert on negotiations, or is terrific at customer service. What is it that she does that other people—ordinary mortals—don’t do?

4. Eliminate overlaps. It’s important to make sure that the statements used to describe the performance of a master apply only to one specific competency. For example, consider the phrase, ‘‘Easy to get along with.’’ Does that describe the competency of interpersonal skills, or communication skills, or customer service, or people management ability? Take your choice, but choose only one. Never have the same description of master-level performance show up in two different competencies. It’s important that the descriptions be sufficiently unique that no one can say, ‘‘Well, that’s just the same thing in different words.’’

5. Sort the list. Once the complete list of competencies, along with the descriptions of master-level performance for each of them, has been created, it’s time to assemble the top management group. Their task is to sort through the competencies and narrow the big list into the small number of competencies that are the most important. One fairly easy way to do this is to put all of the competency statements on index cards and give a set of cards to each person involved in deciding which ones are critical. The instructions are simple: Sort the deck of cards into three equal piles: must, should, and nice; or high, medium, and low.

Note that the instruction calls for three equal piles. That’s important. It’s also very difficult. If there are thirty different competency statements under consideration, the first time a manager sorts the list he’s likely to end up with twenty in the must pile, eight in the should pile, and two in the nice, or low pile.

That won’t work. The discipline involved in sorting the competencies into three equal piles is what makes the process work. If everything’s a must, then nothing’s a must.

Managers will wiggle and whine to avoid the hard job of saying that ‘‘developing talent,’’ for example, is more important than ‘‘decision making,’’ but less important than ‘‘planning and organizing.’’ They’ll point out that job requirements vary and that different people have various levels of skills. All of this is true, and all of it is irrelevant.

The objective is to identify the small number of genuinely important attributes, skills, traits, or proficiencies that give the organization a competitive advantage. Tough-minded decision making is required.

6. Compare individual decisions. Once each of the senior managers has sorted his or her own set of cards into equal piles of high, medium, and low, compare the decisions each participant made in order to come up with the final list. For example, it may be that of the seven managers participating in the card sorting activity, four of them put the ‘‘delegation’’ card into the must pile, two put it in the should pile, and one assigned it to nice.

Mathematical analysis is not appropriate. Don’t decide that the easiest way to sort things out is to assign three points to a must, two points to a should, one to a nice, and then let arithmetic prevail.

That’s a mistake. You’re not trying to solve an algebra problem. You’re trying to illuminate the bone-deep convictions among the organization’s senior leaders about what genuinely is important around here. What kinds of behaviors do they really want to see in the troops? Which important behaviors are they willing to sacrifice because others are even more imperative? Arithmetic alone can’t give you the answer.

Instead, post the results where all can view them. Make up a flip chart with all of the competencies listed alphabetically and provide three columns labeled high, medium, and low. Then give each participant a marker and ask them—simultaneously—to put a check mark in the appropriate column on the chart to indicate their decision about each competency.

7. Come to consensus. Start by looking at the competencies that got the lowest number of votes, the ones that most people agreed belonged in the low pile. Pay attention to any fervent arguments from lone dissenters, but recognize that if most of the participants felt that ‘‘motivating subordinates’’ was a nice and not a must, that’s probably the appropriate placement.

Once the easiest ones to eliminate have been discarded, look for ones where there is clear consensus that they are essential. If every participant put ‘‘visionary leadership’’ into the high pile, then there’s not much argument about whether it should be included on the final list.

The difficult decision involves determining just how many competencies should be on the final list. This is a time when ‘‘the more the merrier’’ doesn’t apply. Small is good. Fewer is better.

The objective of the competency development process is to focus the attention of every member of the organization on a small number of genuinely important attributes that top management expects of every organization member. The fewer the number, the greater attention that will be paid to each. Bill Clinton beat George Bush the elder by repeating, ‘‘It’s the economy, stupid,’’ not by saying, ‘‘It’s the economy, and the Middle East, and school vouchers, and healthcare, and . . .’’ You get the point.

Exactly how many competencies should there be? Consider setting the maximum at seven. Most of us can remember a seven-digit phone number when it’s told to us, but we often get befuddled if an area code is given, too. Actually, many of the competencies vying to make the final cut may actually be critically important in some jobs but not in others. Leave them off the list. For example, ‘‘visionary leadership’’ may be a critical requirement for success at the top of the organization, but not every pipe fitter or sales agent needs to display it.

8. Publish and use the competency list. Once the final list has been determined, make sure everyone in the organization is aware of it. Communicate widely. Describe the development process and why certain items made the cut while others didn’t.

The most obvious and important place to use the organization’s competency list is in performance appraisal. In many cases, the development of a competency list is initially undertaken as part of a bigger scheme to update the company’s performance management system. If not, at least add the list of competencies to the existing performance appraisal form along with the descriptions of master-level performance. Then ask appraisers to evaluate how often the individual being reviewed performed as a true master in each area. Did the person display master-level performance sometimes, often, routinely, or invariably?

Hot Tip

Take advantage of any other opportunities for publicizing the competency list. Recruiting materials should tell potential job candidates that the organization knows exactly what it’s looking for and what kinds of behaviors and talents are specifically sought. A copy of the list, along with the master-level descriptions, should be given to every new hire as part of initial orientation. The content of training programs should be reviewed to make sure that the critical competencies are reinforced in training.