How agile competence management succeeds in digital transformation – and why it’s no longer really about competences

The digital transformation has arrived in HR. Processes are being digitized to become more efficient. New concepts such as Holacracy or OKR are being experimented to become more agile. And the development of digital skills are discussed in order to make employees fit for the digital world, so that the organisation will still exist in the future.

It is therefore not surprising that HR managers are thinking about revising the competency model. The integrated competency model is at the heart of many HR organizations to manage competencies. However, hardly any integrated competency model unfolds in practice the effect that it promises in theory. It also sounds too tempting to be true. A model that is integrated into all HR processes and almost automatically ensures that all employees have the competencies they need.

I would therefore like to address the following topics in this article and take away my conclusion for quick readers in the figure below:

  1. Why the integrated competency model is already not working today
  2. Why the integrated competency model will definitively not work in the future
  3. Which common approaches to solutions are not thought through enough
  4. In which direction should be thought instead

agile competence management

  1. Why the integrated competency model is already not working today

I have already been involved in several projects to adapt a competency model. Practical experience has shown that the integrated competence model sounds good on paper, but is not adequate in practice. Among other things, it is possible to observe:

  • Too general: The competency model is often a compromise between different interests. This dilutes it to such an extent that it is completely arbitrary and generic.
  • Too complicated: Other use cases show that detailed competence profiles are created for function groups. This brings a lot of effort with a very small effect. Because the feedback from managers is homogeneous: For recruitment, assessment and competence development, the competencies specified in the functional profile are helpful to a limited extent in the best case.
  • Too little orientation: Competency models refer to competences. Logical. Competences are understood as the behavioral dispositions of individuals. A competency model should therefore show employees what dispositions they need to be competent. Be it to implement the corporate strategy. Be it to get ahead professionally. But for various reasons, there are probably only very few companies for which the competency model can assume this orientation function. Employees often do not even know that such a model exists. Not to mention that the model would give employees orientation to approach their own development in a self-directed manner.
  • Too little impact driven: In other HR organizations, competency models are developed that would deserve the best grades as a thesis at a university. However, the paper per se has no impact on employees. The focus should actually be on the benefits for the organisation and its employees. Not a theoretically perfect treatise.
  • Too overwhelming: There has long been a controversial debate in science as to whether competencies (as individual behavioural dispositions) can be measured at all. At the same time, managers with full calendars and without pedagogical training are expected to judge the behavioral dispositions of employees, which they can hardly ever observe due to the increasing project work.

 

  1. Why the integrated competency model will definitively not work in the future

These current problems are now joined by changes that question the principle of the integrative competency model. For example, critical scrutiny is required:

  • HR instruments in flux: How useful is it still to integrate the competence model into the familiar HR instruments if these instruments have hardly changed for decades and now urgently need to be adapted to the new world?
  • Recruitment in flux: How useful is it still to use the competence model for the requirements profile, the job description, the interview guide, the assessment centre, etc. if today’s recruitment is in the responsibility of a self-organised, heterogeneous team whose specific competence gaps cannot (cannot) be mapped by the competence model? And if these teams attach much more importance to a „cultural“ fit – after all, skills can be developed relatively easily.
  • Performance management in flux: How sensible is it still to use the competence model for the annual performance review, individual development planning and the development center if these instruments are increasingly being abandoned or replaced? For example, when OKR replaces traditional performance management.
  • Talent management in flux: How useful is it to use the competence model for potential analysis, the talent portfolio or personnel requirements planning if the job positions are then filled on a different basis anyway? Or increasingly programs are being introduced to simplify internal job changes.
  • Personnel remuneration in flux: How useful is it still to use the competence model for the functional landscape or function evaluation when functions are replaced by roles in agile organizations? Rolls that are flexible, individual and temporary to a large extent.

 

  1. Which common approaches to solutions are not thought through enough

Based on the problems identified, the integrative competence model is probably not the solution for future challenges. The following conclusions are particularly delicate:

  • Complementing or adapting the competence model with digital skills in the hope that this will adequately develop the employees and the organisation. However, the ineffectiveness of the integrative competency model will not change as a result.
  • Replace competencies with values in the integrated competency model. As Anja Mücke and Vanessa Hitz (2018) aptly point out, values are only part of competences. They, too, are an internal disposition of behaviour, which in the best case scenario are at least collectively anchored and thus offer a basis for a common culture. The basic problem here, however, is the same: the old is simply repainted. An integrated value model may be a step in the right direction, but it does not solve the above problems because it still remains too close to the status quo.
  • Leave the ineffective competency model in Pandora’s box and focus HR work on concrete problem solving. Even if I like this solution and it makes sense in the short term, it cannot be a sustainable strategy. If HR ignores the competency model integrated into all HR processes, certain side effects cannot be ruled out. Even if it is only that employees do not use time effectively. At the same time, HR misses the opportunity to lead the organization into the future.
  1. In which direction should be thought instead
  • Customer focus: HR is a service provider for the organization. In this way, HR is no different from other service providers who have to focus on customer benefit in order to be successful. The absolute focus must therefore be on increasing the benefits for the organisation and its employees.
  • Problem focus: As specialists, many of us in HR tend to think about our solutions first and then look for appropriate problems. In science this phenomenon is unpretentiously called „garbage can strategy“ (Cohen et al. 1972). However, this does not necessarily increase customer benefits. The starting question should therefore always be: Which problem needs to be solved first in order to help the organization and its employees the most.
  • Orientation focus: Due to the increasing dynamics, it is simply impossible for HR to develop such a complicated instrument as an integrated competency model. By the time this dubious product is introduced, it is already outdated. „Modern solutions must be agile. This means that they can be flexibly adapted both in terms of content and application. This is only possible if HR says goodbye to wanting to give the business all contents and processes, as in integrated competence management. HR can take on an orientation function. It can enable the business to do certain things and support it in the process. A competency model thus becomes more of an agile orientation model or a compass, as I have called it elsewhere (Krapf 2018a). This orientation model can then refer to competences – and/or other aspects (see below). In the application of this orientation model, it is then necessary to reflect in a problem- and customer-focused manner to what extent integration into an HR process or another HR instrument makes sense. This also means that integration into certain processes cannot be rejected per se. Rather, the mechanical, quasi-automatic and holistic adoption proclaimed in the textbooks as an integrated competency model is inappropriate.
  • Purpose focus: Agile organizations have something in common, they have a purpose (Laloux 2014). Such a „framework of meaning“ is important for agile organizations because it provides the necessary stability and configuration (Rüegg-Stürm and Grand 2014). In classic organizations, hierarchical top-down decision paths ensure that the various teams are more or less on the same line. This makes large companies correspondingly slow. Agile organizations are broken down into self-organized teams that are linked to form a network (Krapf 2018b). Networks can be configured to a certain degree by a common „Purpose“. Instead of a competency model, a „Purpose“ model could be developed which would be translated at organisational, team and employee level. However, this is not intended to suggest that an integrated competency model should now be developed in the style of an integrated purpose model. Rather, I see HR as a possible driver and supporter of such a „purpose“ model. For example, it is not the task of HR to develop a „purpose“ model for a team. But HR can help a team or individual employees to translate the organizational „purpose“ into their own context.
  • Action focus: Successful organisations do. Also in this context it is important to do things and not to freeze in the analysis. Focus of action does not only mean this inner attitude of HR during development, but also refers to the orientation model. Regardless of whether this refers to competencies, „purpose“ or something else. The focus should not be on an inner disposition as with competencies or values, since these can hardly be observed and do not necessarily lead to the intended collective behaviour which can also be described as culture in the sense of „how we do things around here“ (Krapf und Seufert 2017). Focus of action means that an orientation model describes, for example, intended behaviour (as a counterpart to values) or performance (as a counterpart to competence). On the one hand, this is directly observable. On the other hand, it is easier for employees to implement. Both promote the orientation function.

Conclusion

I am aware that these five elements do not yet constitute a „new“ competence management system. That is not and was not the aim of this contribution. The question is anyway whether the competence model can still be the solution for competence management. This is not intended to marginalize the development of competencies in organizations. On the contrary. However, as has been shown, HR should primarily be concerned with solving problems for (internal) customers. This is therefore also my main statement. The second statement is that there can still be something similar to a competence model that makes sense as an orientation. This model can refer to competences (or performances). Alternatively and for more mature agile organizations, however, it is probably more appropriate to focus on the „purpose“.

 

Literature

Cohen, M. D., March, J. G. & Olsen, J. P. (1972). A Garbage Can Model of Organizational Choice. Administrative Science Quarterly (17), 17–32.

Krapf, J. (2018a). Digital Fitness – Which mindsets and competencies lead to success in a digital world? https://joel-krapf.com/2018/03/21/digital-fitness-which-mindsets-and-competencies-lead-to-success-in-a-digital-world/

Krapf, J. (2018b). A framework for organizatinal Agility. https://joel-krapf.com/2018/08/07/a-framework-for-organizational-agility/

Krapf, J. & Seufert, S. (2017). Lernkulturentwicklung als Ansatz zur Steigerung der Agilität von Teams – Reflexion einer gestaltungsorientierten Forschung. bwp@ 33.

Laloux, F. (2014). Reinventing organizations. Brussels: Nelson Parker.

Mücke, A. & Hitz, V. (2018). Kompetenzmodelle als Kern eines integrierten Kompetenzmanagements. In A. Mücke & V. Hitz (Hrsg.), Kompetenzmodell in Schweizer Unternehmen. Status quo, Praxisbeispiele, Lessons learned, Alternativen (HRM-Dossier, Bd. 80, S. 6–19). Zürich: SPEKTRAmedia.

Rüegg-Stürm, J. & Grand, S. (2014). Das St.Galler Management-Modell. 4. Generation – Einführung. Bern: Haupt.

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