There's a world of difference between "competence" and "competencies" but we often confuse the two. It's as if the words were cursed by the gods, and some mythological being clouds all understanding of the terms among mortals, whenever and wherever they are used in business.
(I'm specifying business here, because education uses competencies in many practical ways and they don't seem to experience the same level of mayhem.)
Why does it matter? Because so many of us continue to use competencies in our performance management and career development efforts. And as these processes are put online, with databases of competencies to speed us along, the meaning of "competencies" seem to get even more diffuse and confused. So here goes -- one tiny mortal's attempt at some clarity.
"Competence" and "competencies"
Merriam Webster defines "competence" as "The ability to do something well." BusinessDictionary.com defines "competence" in business as, " A cluster of related abilities, commitments, knowledge and skills that enable a person to act effectively in a job or situation."
There are times in our work when we want to know how "competence" is defined. When we're hiring, for example, we want to know whether the person will be able to act effectively in the job. When we're creating development opportunities, we need to analyze "competence" so we can help incumbents develop the knowledge, skills and abilities they need. Not to be cute, but sometimes, "competence" is described in the form of "competencies" (more on the distinction in a minute).
The thing is, we often need to look at "competence" from a different angle when we address performance management.
Here's the traditional definition of an employee "competency:"
The combination of observable and measurable knowledge, skills and abilities that contribute to enhanced performance that results in organizational success.
Most who understand "competencies" would not include personal attributes in the definition. Personal attributes are aspects of ourselves that we bring to the party (e.g. diligence, curiosity, open-mindedness and so on). They aren't reliably observable or measurable, except by experts. You can improve them, but it takes a personal journey and a lot of focus for most of us to evolve from being closed-minded to open-minded, for instance.
Knowledge, skills and abilities, on the other hand, are more observable. We can see how employees' demonstration of them help or hinder the work at hand. Once we know the knowledge, skills and abilities that will make someone successful in a job (no small feat), we can figure out how to improve them relatively quickly and turn our attention away from doing things that have little impact.
But the $64,000 word in the definition of "employee competency" is "enhanced." This is where the distinction comes in between the meaning of "competence" and of "competencies." When we are coaching employees through performance planning, we don't make a laundry list of all of the "competencies" needed to be "competent" in the job. Instead, we think strategically and help employees focus on the "competencies" that are needed to achieve the business results established for the year.
How do we know what those business priorities are, and which employee competencies to focus on? There is a seminal 1980 HBR article, "The Core Competence of the Corporation." In it, the "core competence" of an organization is described as (hold on here), "a harmonized combination of multiple resources and skills that distinguish the firm in the marketplace."
"Distinguish the firm in the marketplace" seems to mean on the face of it, "the stuff we're really good at." But that's just the half of it. We do need to know the stuff that we're good at, but the writers point out that we really need to pay attention to a subset of the list. One that singles out the SKILLS AND RESOURCES THAT ARE DIFFICULT FOR COMPETITORS TO IMITATE.
In other words, what differentiates Coke from Pepsi, Apple from Dell, Uber from San Francisco's Fog City Cabs -- the areas of differentiation that add up to your company's "sweet spot."
What does this wordplay mean for you?
When you select employee competencies, don't be guided by, "what we are, or should be, good at" but by the critical subset that describe, "what distinguishes us from our competitors" and what we need to work on to distinguish us over the next three years. This distinction may seem nuanced, but I doubt it will turn out that way if you really work at it. Talking your company's "core competence" over with executives is the best place to start to make the distinction clearer and to be able to identify the key subset of employee competencies.
And when you identify the employee competencies to highlight, don't worry if they are somewhat aspirational. Effective competencies help managers and employees learn to shift their skills and abilities from where they are today to what the future has in store.
Eager to sharpen your competencies and move up in your career? Get yourself a copy of Everything You Do (in Compensation) Is Communication @ www.everythingiscommunication.com, the convenient website where you can grab our popular eBook. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, Margaret was a Principal at Towers Watson.