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Competency Fallacy

management Mar 11, 2022

Written by Ed Cook

​In corporations around the globe, managers are engaging in a process to develop their associates. At least they are trying to do it. These well-meaning attempts typically include some sort of a model of competencies. The manager is supposed to “ground” an assessment of the employee’s competencies with behavioral examples when they exhibited higher or lower levels of these competencies, then finally give the employee a score against each competency. There are a few core questions to examine in this system of thought. 

First, what is a competency? So many companies talk about these. Rate their people on these. Determine promotions, bonuses, and raises on these. Companies define competencies like “strategic thinking” and “builds relationships.” These certainly seem useful. Who wouldn’t want an employee to be great at these two competencies and others? Typically, competencies are the more intangible traits that a company thinks makes for a great employee. So, we need to define a competency so we can measure it.

Second, how is a competency defined? This is where it starts to get tricky. Competencies are abstractions, something that only exists as an idea. To make sure everyone is on the same page for the meaning of any competency, companies attempt to define them by listing “behavioral examples” that often have “differentiators” for the level of proficiency of the competency that an employee demonstrates. With a typical five-point range, that means even having five competencies requires twenty-five differentiators. The descriptors used to make the differentiation are often adverbs like “rarely,” “sometimes,” and “always” which now sets up the problem of defining those terms. On it will go becoming more and more complex and unwieldy. 

Third, how is a competency measured? With descriptors either fixed year-over-year or defined for each year (a laborious process), managers are now tasked with determining where on the scale each employee sits. Here’s where the system really starts to wobble. There are two factors to examine in any measurement system: validity and consistency. Validity is the ability of the system to accurately measure. Consistency is the ability to do it repeatedly without significant variation. Competency measuring systems can do neither. 

First, competencies cannot be measured. Taking “strategic thinking” and “builds relationships” as examples, are they expressions of who we are and therefore immovable or are they skills that can be improved? If they are skills then there should be direct tests to measure them and a body of knowledge to learn. If companies see these as skills, then there is a clear path to measurement and training. A skill mapping system makes sense because then all are clear that these are skills that are valuable for the role. It would be possible to develop schools and classes for these like there are for accounting and marketing and analytics all of which have a body of knowledge to learn and external tools to measure proficiency. If instead competencies are expressions of who we are, then a very different approach is needed to understand these. For an understanding of the psyche of a person, we look not to a group of outsiders (managers in this case) to peer inside the head of an employee, but rather we use internal tools. Questions are asked that an employee answers, not managers, about how they would handle a situation or simply how they would assess themselves. A look at art and artists can be instructive. There are many skills involved in creating art, that can be learned. Arts schools exist in part to do this.  But art schools take a very different route for the competency of creating art. They don't measure it with external tools, instead, they create a dialog between student and teacher where the student can discover what art means to them.

Second, improving a competency does not necessarily drive improved performance. Certainly, it is the job of managers to make decisions with limited information. It is not unreasonable to explore the idea that even if it is very hard to get the measure right, the process of doing it can still be valuable. This is the second problem with competencies. The idea of the well-rounded person who performs better as a result of improved competencies is the stuff of management theory, not management reality. To see this, we can look to examples of all kinds from sports, music, business, military, government. We wouldn’t ask a great footballer to enter the hockey ring or an opera star to sing hip-hop or a salesperson to handle accounting. In studies of what did make for a great performer, what consistently showed up was that they excelled somewhere. It was not being well rounded but instead having greatness in some aspect of the role.

If measuring competencies is irrelevant and impossible then what should we measure?  Answer: outcomes. This is at once subtle and obvious. Obvious in that people have been measuring outcomes since the first person made a trade of a good to another person. What else are we measuring except the goodness of the work? We should continue that tradition. This is, however, subtle in that describing a good outcome in our ever-increasingly complex processes of business can be hard. But…that is the role of a manager! Of all the things a manager can do to create value, clarity of what good means for each employee tops the list. With that clarity, employees are now empowered to make decisions about how to get to that outcome. An opaque system of competency measurement will not do it. 
There is still room for managers to help employees make improvements. Managers can coach to provide guidance on how employees can use their skills to better effect. They can provide training to improve their skills. Even better they can be clear on what skills are needed and then set up training programs for employees to obtain those skills. They can select work that both plays to their strengths but allows room for them to grow. Managers remain critical to the success of the group and the growth of the employee. It is clarity of outcomes that shows the path to success.