CompetenciesPerformance Management

Competencies – Build or Buy?

By 19th May 2011 No Comments

Buy off-the-shelf, build from new or take the middle road and customize existing content? That is the question facing many organizations looking to use competency models today. There are advantages to each approach and in some cases the route taken will be dictated by how unique the competencies are to the organization, how much budget is available and how quickly the project needs to be delivered.

In view of the value that competency models bring to an organization, it is essential that they are well designed and that they meet the specific needs of the organization.

There are a number of techniques that can be used to build competency models or even customize existing ones. These may include setting up Resource Panels, holding Executive and Behavioral Event Interviews, carrying out surveys, using external market research, observing job incumbents and leveraging existing documentation.

One approach is to hire an external consulting firm to undertake these activities and build the competencies from new. Experienced external consultants with well-defined processes and templates may increase the chances of the project being well run. In addition, there may be a perception within the organization that external experts, who specialize in this type of work, are more credible than internal consultants and their work will more readily be accepted.

So, hiring an external consulting firm to start from the ground up may sound like the ideal but it can be an expensive and time-consuming exercise. For instance, it takes time to organize numerous employees with varying schedules and commitments to participate in interviews while they are trying to fulfill the requirements of their ‘day job’. Allowing for the fact that the exercise will necessarily include the organization’s best performers, their participation in the competency building exercise and consequent absence from their job may impact the business.

If the project over-runs or places too much of an overhead on the business, there may a risk of losing sponsorship and budget.

Another option is to use off-the-shelf competencies. The advantages are obvious, the data has already been gathered and is in theory, ready to use. However, existing competencies are likely to be based on data that has been derived by aggregating the results of numerous organizations in the past. This approach may exclude competencies that are unique to the organization and which offer it a competitive advantage. Furthermore, using external content without any internal intervention can tend to exclude stakeholders and lose their valuable buy-in.

However, an approach that has worked successfully for many organizations is to use existing competency models and tailor them to their specific needs. The above mentioned data gathering techniques can also be used to customize existing competencies. With the right training, well selected staff can be deployed with good effect to do this work. Alternatively, even if you do decide to use external consultants, starting with existing content and tailoring it will reduce how much of their time you will need to pay for.

This hybrid approach provides the advantages of content that is fit for purpose – it can be used to capture the key characteristics of the organization and it gets stakeholders involved but is not as expensive or as time consuming as ‘starting from scratch’.

This article was first posted on the HR Bullets blog site: http://www.hrbullets.co.uk/unplugged/