The world is globalizing, digitalizing and sometimes humanizing. What does this mean for the skills we need to develop? Since the interconnectedness of the world is increasing we see an abundance of competencies that need to be updated or completely renewed. We will discuss this from an individual, team and organizational perspective. One thing is for sure: we need to be able to function in worlds of contradictions. And if we do so we need to become more innovative and agile as a process.

The recruitment and selection of professionals and managers is one of the most significant and costly investments an organization can make. Risks can be high, and the cost of a bad hire can have a tremendous impact on time, money and company culture.

A competence and competency-based approach to recruitment and selection of professionals and managers can help your organization make it an effective and successful investment of time, money and expertise. Regardless whether we approach it from the individual, team or organizational perspective, it is very useful to distinguish competencies and competences.

According to Alder Koten (https://alderkoten.com/what-is-the-difference-between-competences-and-competencies/), such an approach will help ensure that:

• The organization is clear regarding the competencies and skill sets required by the job
• The selection processes encourage a good fit between individuals and their jobs
• Managers and staff have the required skills and competencies
• Individual competence and competencies are matched to the requirements of the position, the fit of the person with the immediate team, the overall cultural fit, and the particular challenge
• A good process can also support and sell the decision internally if it is determined that an external candidate is the best choice for the position

What is the difference between Competences and Competencies?

A number of confusions within the area of performance assessment with regard to the use of terminology, and differing interpretations, regarding competence assessment are existing. A significant difference between the US and UK approaches to performance assessment is identified. A particular aspect of this is its relevance to assessment based on behaviors and attitudes rather than simply on the results of functional analysis concerning a particular job. This has implications for the future direction of performance assessment, particularly with regard to identifying performance.1

A definition of competence is the capability to carry out a defined function effectively. Whilst a definition of competency is the description of the knowledge, skills, experience and attributes necessary to carry out a defined function effectively.

It becomes clear from above table that competence describes what people can do while competency focuses on how they do it. In other words, the former means a skill and the standard of performance reached, while the latter refers to the behaviour by which it is achieved.

It implies that there is an interface between the two, i.e. the competent application of a skill is likely to make one act in a competent manner and vice versa. The difference between competence and competency can be better understood by knowing and understanding their components. In short, a competence’s focus in on the what and the competency’s focus is on the how.

A gradual shift in attention from competence to competency

Because of the new challenges that digitalization, agile working and globalization have posed to us, we see an obvious shift from attention from the ‘what’ to the ‘how’. I remember vividly a client that asked us to see whether we could develop an app that measured the values of the participants and the values of the organization and see whether they would match. This value based recruitment approach was inspired by the fact that this organization experienced much more trouble in the how than in the what in making the organization more innovative. And skills are much more easy to assess than the behaviors we need to build a culture we need.

So how can HR Directors help guide their organization?

Well it is too simplistic to expect a straight journey down a single path. It is becoming clear that any single corporate culture has its strengths and weaknesses. At any given time, most organizations have a single dominant corporate culture that struggles with less dominant orientations. The organization life-cycle follows a series of transitions from one corporate culture to the next where each transition is prompted by a crisis. Each crisis arises when growth outgrows the current culture. Here we find frequently occurring dilemmas that must be reconciled in order to progress from one culture to the next. Each dilemma requires an innovative solution and a truly innovative organization copes successfully with each. And again, the how is more important than the what.

So, the prerequisite for an innovative organization is the reconciliation of a variety or organization cultures in order to face the changing dynamic world in which it operates. Cultures can learn to reconcile differences from values at ever higher levels ~ for example, so that better rules are created from a variety of exceptions that come with growth. But let’s follow the typical life-cycle of cultures.

A competence and competency-based approach to recruitment and selection of professionals and managers can help your organization make it an effective and successful investment of time, money and expertise

Creative entrepreneurship

Typically, organizations begin by the founders creating both a product (or service) and a market. As the organization grows, it exceeds the capacity of the founder to know everyone personally resulting in a crisis of leadership because management problems cannot be handled through informal processes.

From Invention to Intention: growth through direction

The solution is to appoint a strong paternalistic manager who can pull the organization together in a kind of family. Often a trusted relative of the founder is chosen who has to reconcile the original incubator culture with the developing family culture. Dilemmas manifest as team sprit versus individual creativity, and leading participative employees versus respect for authority. But later, people find themselves restricted by the cumbersome and restricted centralized authority. Their dilemma is now between following orders and taking initiative so creating a crisis of autonomy.

From intention to invasion: growth through delegation 

It is difficult for leaders who had been successful at being directive, to relinquish control and delegate and the lower level managers are not used to making decisions. The need to develop a Task oriented culture (that we caricature as a Guided Missile) becomes evident. But this gives rise to dilemmas of lord, servant or servant leader and tensions from asking how we centralize lessons from decentralized locations and finally social learning versus technological learning.  Innovative approaches are again required in which Leaders need to lead by giving service to others. And concerns for people have to be connected with concerns for productivity resulting in a reconciling socio-technical philosophy. In this way, the reconciliation of the family with guided missile cultures means the inventions have gained intention through the directive infusion of long term commitment with the support of loyal people. Furthermore, the intended inventions have obtained focus to the outside world and are ready for invasion.

From invasion to implementation: growth through co-ordination

Just when we thought all was well, top management senses that it is losing control over a highly diversified operation. So the crisis of control arises. Now we need more formal reporting systems and committees which results in a return to centralization. We caricature this as the rise of the role oriented Eiffel Tower culture. Dilemmas now appear between meeting financial criteria versus developing people, focusing on customers versus internal processes and whether we should meet benchmarks or transcend them. Standards and benchmarks become obsolete when we realize they are linear one-dimensional measures. So it is not simply if people have lived up to the standards, but have the standards lived up to the people! Reconciling internal orientations with customer focus can be achieved by involving customers in improving internal processes!

From implementation to inquiring: growth through collaboration

Most coordinating systems eventually gain a momentum of their own resulting in a crisis of ‘red-tape’. Now the organization has become too large and complex to be managed through rigid well prescribed systems. Procedures take preference over problem solving. So how do we sustain the innovation spirit of the organization now? We’ve given ‘intention to invention’, invaded the market, and implemented the right processes whilst fighting the crises of leadership, autonomy, control and red tape.  New dilemmas involve striving to be right first time or correcting errors quickly, learning explicitly or tacitly, and connecting the authority of sponsors with empowered teams.

From inquiring to innovation: growth through external connections

By reconciling the dilemmas characteristic of this phase, the infinity loop is finally closed and at the same time to go outside the organization.

The organization may now have exhausted what it can achieve from itself so growth now may depend on the design of extra-organizational solutions ~ such as buying a new small pioneering incubator that brings a fresh input of innovative ideas! This networking and alliance phase has more emphasis on the market than internal hierarchical concerns. The locus of innovation now shifts to networks and away from the individual firm.

Because of the new challenges that digitalization, agile working and globalization have posed to us, we see an obvious shift from attention from the ‘what’ to the ‘how’

CHALLENGES FOR HR

HR should be prepared to help the crisis of leadership with leadership development programmes focusing on the reconciliation of the following crucial dilemmas:

• Leading participating employees versus respect for authority
• Team spirit versus individual creativity
• Effectiveness of teams versus creation of cultural knowledge about these teams.

In the crisis of autonomy, the HR professional is responsible for facilitating the reconciliations between:

• Lord, servant, or servant leader?
• How do we centralize lessons reaching us from decentralized locations?
• Social learning versus technological learning

Effective levers to pull at this stage are processes in corporate learning and knowledge management. And the crisis of control can best be overcome if HR helps to resolve:

• The role of standards and benchmarks: should we meet or transcend them?
• Meeting financial criteria versus developing our people
• Focus on external customers versus focus on internal.

Traditional job evaluation systems, freezing the reality of ever evolving creative jobs, jeopardize innovative cultures. Programmes related with appraisal systems and customer orientation programmes can be the focal point for exposing these issues. For the crisis of ‘red tape’ the HR role needs to be broadened so that the following dilemmas can be resolved:

• Authority of sponsor versus empowered teams
• Lean processes versus client is king
• Should we strive to be right first time, or make errors and correct them quickly?
• Do we learn explicitly or tacitly?

The HR role supports the chief inquirer by becoming a consultant to make learning systems possible, job evaluation systems transparent and integrated (not ‘balanced’ scorecard to support this.) Finally, HR roles become crucial in helping the organization going external and assist with the following dilemmas:

• Internal versus external innovations
• Investing in research and development efforts versus cooperating with rival companies
• Hi-tech versus ‘hi-touch’ in virtual teams
• Systemic versus modular innovation.

Here the HR professional needs to connect to systems and partners outside the company and learn by connecting to alternative systems.

The challenge for ‘HR’ is not to think itself as human resource management but the management of resourceful humans. We need to reconcile competences with competencies, because we both need the what and the how

In perspective

In our consulting, we have captured, encoded and trawled through some 45,000 dilemmas with which organizations wrestle. Linguistic analysis and data mining shows this raw database can be reduced and clustered to a manageable series of frequently recurring dilemmas that embrace the life-cycle stages we have described. It is those organizations that successfully reconcile the dilemmas by developing the competency in making connections between different orientations that survive in the ever-changing world. HR has a key role to facilitate this mindset change.

Ultimately, people are still the unique and scarce entity. But the challenge for ‘HR’ is not to think itself as human resource management but the management of resourceful humans. We need to reconcile competences with competencies, because we both need the what and the how.

And that really would be innovation!

(The concepts described here are explored in detail in the recently published ’Riding the Whirlwind ~ Connecting People and Organizations in a Culture of Innovation’ by FonsTrompenaars and Charles Hampden-Turner.)