Using competency to source future leaders

By Fitri Dianasari & Yodhia Antariksa

JAKARTA (JP): Rudy, a CEO at a leading company, is facing a dilemma as one of his marketing executives will retire soon, and he has to find someone to replace the aging executive.

While going through a list of his managers, Rudy realizes something else: Many of the executives in top and middle-level management are over 50 years of age and close to their retirement.

Yet his company does not have any system in place to identify people as potential successors. Rudy's problem could have been resolved easier had he utilized a competency model as a basis for human resources decisions.

What is a competency model?

To answer that question, we must first understand the definition of competency. In its narrowest sense, competency can be defined as the abilities a person must possess to be effective on the job. It takes the form of skills, knowledge and even the values that will distinguish a performer from a nonperformer, and this is demonstrated in terms of tangible and observable behaviors.

On a broader scale, it can also refer to the extent of a person's mastery of the skills required for a job. A competency model can therefore be defined as the combined set of knowledge, skills and attributes that are needed to perform tasks successfully.

There are some useful benefits of using a competency model for the company and employees as well. For example, by adopting competency modeling, a company is able to establish expectations for performance excellence. It will also increase the effectiveness of training and professional development programs by linking them to the success criteria (i.e., behavioral standards of excellence). Lastly, a competency model can also provide a common framework and language for discussing how to implement and communicate key strategies.

For employees, a competency model will also provide meaningful benefits. It can help them identify the success criteria required to be successful in their role. In addition, a competency model will also provide them with development tools and methods for enhancing their skills.

Considering such significant benefits, many companies have been implementing competency models over the past decade. For example, a study conducted during the U.S. Leadership Development Conference in June 2000 found that competency modeling was used by almost 75 percent of all companies as a tool for leadership development. The same study also showed that 69 percent of the development initiatives of mid-level managers were using competency models as a basis for developing training programs.

Furthermore, a study conducted by Arthur Andersen Worldwide found the majority of companies had applied competency models in the area of training and development. In particular, they responded that competency models were extremely beneficial in the process of creating development programs. By linking development programs to the success criteria that competency models require, these companies have been able to create effective programs to prepare and create capable leaders.

Had Rudy known about the competency model, he would not have had the problems he did whenever one of his executives was retiring. He can use the competency model as a benchmark to find a suitable person to fill the position of a marketing executive. With this model, he also can create and develop effective programs to prepare potential marketing leaders. That way, he can ensure that the company would not lose its executives, and he can develop his middle managers to their utmost potential.

The writers are consultants at Arthur Andersen Business Consulting Jakarta.

(logo of Arthus Andersen to be placed here - bsr)