Why You Need A Capability Model Instead of A Competency Model To Drive Strategy


I’ve had a lot of conversations lately about building competency models. I’ve built a lot of them and frankly, I’m not sure I get the value-add, given some much larger, more concrete priorities, but here’s what I’ve been told when I asked why the company wanted to invest the time in building them:

  • ‘We need a consistent list of things employees are expected to work on’
  • ‘We need to be consistent at what we’re measuring our people on’
  • ‘We need to figure out what to focus on from a development standpoint’
  • ‘We need to make our job descriptions consistent’
  • ‘We need a way to evaluate our people’

The theme is consistency. Companies are seeking ways of identifying what employees should be working on and measured on in a consistent way. The question I have is: How do you know if you are being consistent about the right things? If we are consistent, but we still aren’t focused on what is really needed to drive the strategy, what good is that?Most competency models are so general, that you could argue things like leadership, communication and presentation skills are needed everywhere. So when you think about the work involved in building something that encompasses motherhood and apple pie, do you really need to invest in a competency model?

I believe the desire for a competency model is really hiding a much bigger issue: employees don’t know what capabilities they should be developing and HR doesn’t know how to help them figure it out. What I’ve discovered is that without a clear understanding of the capabilities the organization must deliver to drive their strategy, this question is very difficult to answer; with or without a competency model. I would also argue that a competency model that is NOT focused on driving the right capabilities will actually do more harm than good because it takes the focus away from what’s really important and distracts time and resources from business strategy.

So if you are asking any of the questions above, I recommend taking a step back. Invest your time first in building a capability model. This focuses on what kinds of things the organization needs to deliver to drive the strategy. This will challenge your business clients and it will sound strange coming from HR if HR has not been particularly strategic or business focused. It will also ensure that both you and the business are focused on driving the capabilities required to execute your strategy. Once you have the capabilities identified, assess them. Not all capabilities contribute the same amount of value to strategy. Some are enabling, but not strategic. Some are a ‘ticket to entry’ and some are differentiators. Consider how effective and efficient you are at each of them.

Once you understand which capabilities need work and what is most meaningful, build your priorities to focus on the ones that have a high value add or major strategic differentiators where you need work on efficiency or effectiveness. These capabilities should also provide insight into the competencies people should be focused on. Anything that doesn’t enable execution the capabilities required to drive your strategy is at best a low priority, at worse, a distraction. Align your competency model to your capability model to ensure that employee development and measurement is aligned to the strategy. Now that’s strategic!  Need help?  Call us.  It’s what we do everyday.

If you have questions about organizational capabilities, contact us. We can help.