The logic for what makes an effective competency model has shifted recently to include a greater focus on what makes leaders at your organization different than leaders at other organizations. By adding a critical set of differentiated leadership competencies that ensure customer loyalty and investor confidence in an organization’s quality of leadership, leaders are more likely to know and do work that delivers value to customers.
The implication of this trend is that an effective leadership competency model now encompasses two types of competencies:
1. Foundational Competencies are required of any leader in any organization to be effective. These are the Leadership Code and account for 60 to 70% of overall leadership effectiveness.
2. Differentiating Competencies are unique to your organization’s leaders. These competencies represent how your leaders connect employees to customers in order to ensure the desired customer experience. They account for the remaining 30 to 40% of overall leadership effectiveness.
At this point there are a couple of important questions you might ask yourself:
Does our competency model nail the basics?
You may find that you are over- or under-represented in certain foundational competencies. It is not uncommon to have blind spots or areas that have been overlooked to meet short-term demand. Also, competency models sometimes overemphasize certain areas based on the prevalent issues or theories at the time they were first created.
Does our competency model differentiate our leaders according to customer expectations?
A successful firm has a brand, or identity, in the mind of its best customers, that creates value. This firm brand should translate to the leadership brand by ensuring that leadership competencies reflect customer expectations. Competency models are important for building leadership depth. But if you have the wrong competency model, you are destined to waste a lot of time and money while also doing a poor job of preparing for the future. In turbulent times it is critical to build individual leaders who deliver the right results the right way as well strengthen your organization’s capability to deliver a leadership engine that increases stakeholder confidence in your future results.
What difference do leadership competency models really make?
It depends. A competency model by itself is not going to make a big difference. But a competency model focused on building leaders that deliver results your customers and investors care about is a huge source of intangible value. Leadership competency models are the strategic backbone of leadership development. They guide the assessment and development of leaders at every level. HR systems such as 360 feedback, succession planning, performance management, training, career planning, job assignment, and compensation should be congruent with this model. Leadership competency models are cornerstones for effective development but they need to evolve with changing conditions to optimize impact.