Competency model: how to introduce one, step by step

By introducing a competency model, an organisation acquires the tools and the knowledge to develop and introduce a company-specific competency model. The point is to lay the foundations for competency management. The core of this foundation is a common terminology for competency development: everyone involved means the same thing by a competency and assesses it by the same standards.

For top management as the client, this approach identifies the competencies that matter for sustained business success. Corporate goals, competencies and performance are linked with one another. On this basis, people development can be managed in a targeted way, and the company gains a foundation for steadily building up its human capital.

For the head of people development, the competency model means being able to develop and introduce a valid, company-wide model. It specifically supports personnel selection, people development and performance management.

In an organisation that is realigning itself strategically, the model has a clearly defined aim: competency profiles exist for all important key jobs that are oriented towards the strategic direction and support the achievement of goals. These target profiles have been created and validated. They play a decisive role in the further development of individuals as well as in new hires.

With the competency model, top management gains a company-wide, uniform model for competency development and thus a common language. The model supports the achievement of corporate goals because it aligns personnel selection and people development with these goals. At the same time, it provides a basis for managing and evaluating the work of the HR department and creates a uniform basis of measurement. This results in a cost advantage, because measures are deployed in a more targeted way.

For the head of people development, the benefit lies first in building up know-how. The standing of people development is enhanced because it can make an important contribution to increasing employees' performance. The benefit of training and further education becomes measurable, since every measure can be related to a defined competency and its target level.

The management of development measures is systematised and made easier. The work of people development becomes transparent and traceable, both internally and towards top management. Ultimately, competency-based people development increases the performance of the entire company.

The introduction follows a fixed sequence of steps. First the company-specific core competencies are identified and defined, then the company-specific specialist competencies. By way of example, a competency profile is created for one job group, with the relevant competencies limited to about 10 and at most 20. The competencies are validated with the involvement of in-house specialists, and the documentation is evaluated.

In the next step, behavioural indicators are defined for all relevant competencies. Building on this, the company-specific competency model is created and prepared, and the company-specific competency development system is derived from it. The final step is the handover and introduction of the competency model and the competency development system, together with the training of in-house performance consultants, who then run the system themselves.

Representatives of the individual job groups are interviewed in the process. Before the content work begins, some preparation is needed: the client must be convinced of the approach, a contract is drawn up and agreed, a specialist group and a project lead are appointed, and a project plan is drawn up. In a preliminary meeting with the client, the project team and project lead are set and the schedule and invitation routine agreed.

The actual time required is manageable. Analysing and validating the core and specialist competencies on site takes about two days, defining and preparing the entire competency development system about three days, and the presentation, handover and introduction one day. The results are presented to top management in an executive summary of about one hour covering the competency model and the introduction process.

Defining a competency model starts with discussing the basic factors. These include the organisation's core capabilities, vision, mission statement, goals and strategy or the strategic challenges. This step requires preparatory work by the management: it presents its answers on the basic factors, discusses them with those involved and adds points where necessary.

The existence of the basic factors is the prerequisite for describing strategic core competencies and specialist competencies and creating a competency pool. Competencies that are not derived from goals and strategy remain arbitrary and can later be neither weighted nor measured.

In the setting, the core capabilities are worked out, the picture of the future is made concrete, objectives are defined and the strategic challenges are described. In addition, the cultributes are assessed, that is, the characteristics of the corporate culture that shape behaviour. The results are discussed with the management and the key players in the organisation.

About one day should be allowed for the core capabilities, another day for making the picture of the future concrete and defining the objectives, and about two days for the strategic challenges and the cultribute analysis. Where these foundations already exist, half a day to one day is enough to discuss and adopt them with everyone involved.

In the second step, the organisation's key jobs are defined and adopted. Key jobs are the job groups that are decisive for implementing the strategy and for which competency profiles should therefore be created. In a consultancy, for example, these are partners, consultants, office management and junior staff in internships and training; in an industrial company they would be other groups.

A key job can be divided into several levels based on professional experience. For consultants, a grading into junior, experienced and senior levels by years of professional experience has become established, supplemented by entry via an internship. Such levels later make it possible to set target levels for each grade and make development paths visible.

Related key jobs are grouped into job families. The setting consists of preparatory work, discussion and adoption of the key jobs and job families with the management and the key players. The time required is half a day to one day, and in small organisations only an hour. Guiding questions for this discussion are to be developed for each organisation.

Before competencies are identified, the organisation discusses how it understands the definition of competency and agrees on a definition. The recommended target definition comprises three levels: knowledge, ability and will. A competency is therefore more than specialist knowledge. It includes the skill to apply the knowledge and the attitude of wanting to do so.

In the setting, everyone involved discusses their understanding of competency, the target definition is presented, and the group agrees on a uniform definition. About 90 minutes should be planned for this.

This seemingly small step is important for everything that follows. If some of those involved understand competency as qualifications and others as behaviour, descriptions and assessments cannot be compared later. The threefold division into knowledge, skill and attitude therefore runs through the description of every single competency and through the determination of the competency level.

In this phase, the first discussion is about which strategic core competencies are necessary or absolutely essential to achieve the corporate goals. Core competencies are relevant at all hierarchical levels and form the necessary foundation of a competency model. The guiding question is: which competencies are important for all employees?

Specialist competencies, by contrast, are function-specific. They involve expert knowledge or particular skills needed to successfully implement company- or product-specific processes. They are unique to each organisation and, in how strongly they are developed, can make a competitive difference. The guiding question here is: which competencies are important to be able to perform a particular job successfully?

The work is done as group work in process- or function-related focus groups. In the first step, the definition of core and specialist competencies is based on the job families. The cultribute analysis and existing competency catalogues, for example those by Lominger and Kellner, can be used for orientation. The results of the focus groups are presented, discussed and consolidated in the plenary. In total, about 180 minutes should be planned for this, half for the focus groups and half for the consolidation.

How many core and specialist competencies there are at the end is not prescribed. What matters is that each competency can be traced back to a corporate goal and that the list can be condensed to a manageable number in the later profiling.

Once those involved have agreed on the relevant core and specialist competencies, these are formulated in full. Care must be taken that each description covers the three levels of skill, knowledge and attitude. A competency questionnaire that structures the description along these levels serves as an aid. This step also takes place in focus groups followed by presentation, discussion and consolidation in the plenary; in total about 240 minutes should be allowed, half for each part.

Before taking the next step, the understanding of the competency descriptions within the organisation must be checked. The descriptions are presented to several employees, and it is checked what each individual understands by them. The aim is complete agreement. The indicator of usable competency descriptions is their orientation towards the corporate goals. In small organisations where all employees were involved in developing them, this check can be dropped.

Next, the degree of importance and the competency level are determined. Initially, the only point is to establish how important each individual competency is for achieving the corporate goals. That is the degree of importance. The competency level describes the level of knowledge, skill and attitude needed to drive the corporate goals forward in the right way.

Once the basic factors have been clarified, the key jobs adopted, the definition agreed and the competencies identified, described, understood and rated, a competency model exists. In project planning, about two days should be allowed for describing the strategic core competencies and about three days for describing the specialist competencies in the functional focus groups.

Competency profiles for the individual job groups are derived from the competency model. The method for this is called Rapid Competency Profiling. First, a subject matter expert group is put together for each job group: a team of experts made up of people who know the job profile well or are in close contact with it. These teams form the focus groups.

Each expert team filters out the critical success factors for its job group. The checklist for the critical incident method is recommended, with its questions turned into the positive. So the question is not what goes wrong, but what makes the job group successful and what distinguishes high performers from others.

To create the competency profile and select the right competencies from the competency pool, the success factors are examined in the focus groups. This leads to the necessary competencies. The descriptions from the questionnaire can be drawn on and adapted or extended where needed.

A typical competency profile comprises between 10 and 20 competencies. Competencies that belong together functionally can be combined into competency groups, so that a profile consists of 10 to 20 competencies and 3 to 5 groups. It is also important to provide a means of assessment so that actual and target levels can be compared later.

Before a profile is finally adopted, it is checked for validity. The focus group is used for this, and the aim is a high level of agreement within the group. It has proved effective for the representatives of one job group to validate the profile of another job group. Even though in practice the profiles are often prepared by people development, this validation is crucial. About one day should be allowed for it.

After validation, the areas in which the competency profiles will be used are defined. This step takes only about an hour and a half, but it determines whether the model has an effect in day-to-day work. Typical areas of application are personnel selection, the further development of individuals and performance management. For each area, it is specified which profiles apply and how assessment is carried out.

The work results are then prepared into a complete model. The result is an expert report with background information and a tailored profile for the respective job group. This includes the behavioural indicators for the individual competencies, the competency profile for each job group and the structure of the in-house competency development system.

The handover covers the competency model and the competency development system. So that the system continues to run without external support, internal performance consultants are trained. They are able to update profiles, assess competency levels and derive development measures from them. This makes measurable the benefit of training and further education that the model promises people development.

For project planning, all steps are recorded in an overview with participants, time required and date, and tracked as done or not done. Across all steps, the effort comes to around nine working days, which can be spread over several months. The management and the key players are involved in the strategic steps, the functional focus groups in the profiling. This distribution ensures that the model is backed from the top and filled with content by the specialist departments.