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Why Competitive Success Depends on Competence and Competencies

July 25, 2022 Leadership
Dr. Steven Sherpard
By Steven Shepard LinkedIn

As businesses get back to a semblance of work normalcy — and it is indeed a semblance — they find themselves facing a handful of unanticipated challenges. HR professionals talk about the Great Resignation, the Great Reckoning, and the Great Disruption, but in truth, we can see all three occurring simultaneously.

Between trying to get back to the business of business with less employees (The Great Resignation), dealing with somebody blowing up the railroad bridge on the way into town (The Great [supply chain] Disruption) and the dawning of just how different things are now from a competitive positioning and alignment perspective (The Great Reckoning), companies discover that they have become more “unwittingly reliant” than they realize on two things: competencies and competence. While the terms sound similar, they are different, they both matter, and either fails without the other.

The Difference Between Competence and Competency

'Competence' and 'competency' have different meanings, driven largely by the world of human capital. Both are nouns, and both speak to behaviors related to specific performance criteria. But, they have different, interrelated connotations.

Competence refers to a person’s ability to do something successfully or efficiently. It is synonymous with ability, proficiency and expertise. Most employees, for example, are competent at things that have nothing to do with work — skills related to hobbies, for example.

Competency, on the other hand, describes how and at what level of proficiency certain tasks, functions or individual responsibilities must be performed to demonstrate competence in a given job or task. The degree to which an employee meets or exceeds the success characteristics of a set of defined competencies is a measure of their ability to successfully do their job.

The implications of this difference should be obvious: a set of clearly-understood, well-articulated competencies must be identified, developed and codified in the organization, aligned with every job responsibility, accepted by all employees, and coached by managers and leaders, if an organization is to be seen as competent by its customers. 

Related Article: Have Skills, Will Travel: Address Workplace Blind Spots Before It's Too Late

Scratching Below the 'Competent' Surface

Here’s an example. An employee in a large IT organization manages a group of highly-technical employees. They work in a data center, and include system operators, hardware engineers, software support professionals and operations support specialists.

The manager of the group is considered highly competent by her own supervisor and by leadership in general. System uptime is on-target, users give the organization high marks for application availability, escalations are at reasonable levels, and the data center is running slightly below OPEX targets and on-target for CAPEX spending. Clearly, this is a valuable, competent employee whose business practices serve the organization well.

However, there’s more to the story. If we look behind the scenes, we find that while the manager’s numbers appear very good — and they certainly are, from an operational and financial point-of-view — trouble is brewing, and her performance is less stellar in other, equally important areas. As it turns out, data center performance numbers are high, but one reason for this is a tyrannical leadership style that relies on fear to motivate employees to exceed performance expectations. As a result, key employees are nearing burnout, individual performance is on the brink of faltering, and there is growing dissatisfaction in the ranks.

There is also a communication problem, not yet easily visible, that will soon become a serious issue. Because of her personal communication style, the manager has created growing levels of frustration between her own data center personnel and the third-party contact center professionals who provide customer support for applications delivered from the data center. She is not providing adequate feedback to contact center management about the changes taking place in the application environment, which makes customer support increasingly difficult and which will ultimately be reflected in customer feedback.

Let’s be clear: The manager, the data center professionals who work for her, and the contact center staff are all competent. But by what measures? The problem is that leadership is only assessing one facet of the performance matrix, and failing to develop the skills required for this employee to be a fully competent manager.

Related Article: The Talent Marketplace: A Skills-based Revolution in HR

An Area Only Growing in Importance

As organizations shift their thinking from a focus on Human Resources to a focus on Human Capital — that is, a shift from a resource that is to be consumed, to an asset in which we invest — the waters between competence and competency grow murky. Yet they have never been more important to the competitive success of organizations of all sizes as they are today, as companies face the triple threat of pandemic recovery.

About the Author

Dr. Steven Shepard is the founder of the Shepard Communications Group in Williston, Vt.

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