Transformation Solutions Blog

How to Improve Your Return on Investment In Competency Models

January 29th, 2014

Management guru Peter Drucker once said, “Effective leadership is not about making speeches or being liked; leadership is defined by results, not attributes.” In its report “Developing Business Leaders for 2010” the Conference Board predicted “we will have an environment of extreme cognitive complexity in many industries, requiring extraordinary strategic thinking skills and the ability to make high-quality decisions quickly in the face of competitive pressure and uncertainty.” Leadership isn’t getting any easier.

Even with these increased expectations on leadership, many organizations continue to use competency models that consist of a list of rather generic terms to describe and drive leadership. These competencies are applied to everything from selection to performance management. It’s hard not to like the concept of competencies. After all, it generates a nice list of behaviors that are hard to argue with. They have been around for over 30 years and enough companies have them to drive one to conclude there must provide some value, right? But there are several problems with using these competency lists to drive effective leadership selection and progression. First and most importantly, it assumes that everyone who will excel in the same role will display the same behavioral competencies. This approach chooses to fight against the uniqueness that is inherent in each of us and drives toward a conformity that requires each leader to manage in the same way to be successful. Yet history has shown us that our most effective leaders possess very different traits.

Secondly, leadership is a balancing act – fraught with tensions and tradeoffs. Traditional competency models don’t reflect these paradoxical dilemmas as the list ignores the relationship among competencies.

Lastly, how do you know this is the right list? Competency models assume that most leadership roles tend to be similar in terms of the necessary skills and behaviors. Yet research demonstrates that leadership roles come in a variety of shapes and sizes requiring a variety of skills and behaviors.

So how can competencies add value? If you want to use competencies, they are more appropriately applied as a diagnostic for understanding why leadership results are low or high; and supporting communication of performance in new and different roles.

Defining and understanding what results leadership needs to achieve across the leadership continuum is critical for effective leadership assessment and development. Leaders who act without full knowledge of the results required may work harder but accomplish less. (We aren’t talking about annual goals here.) Despite similarities, there are a variety of significant differences in the results leaders need to achieve depending on the shape of the role, proximity to business results, and the level of operational or strategic focus. So as managers move upward, the complexity of work increases and the competencies demonstrated by effective leaders also vary.

A results-based definition of leadership provides the framework to bring clarity to generic competency models and drive more effective selection, appraisal and development.