Is your organization geared toward maximizing its returns on its leadership? Unfortunately, it is going to be an uphill task for several reasons.

Many organizations actually develop their leaders only after some time. Organic growth of companies force business owners to ignore human resource development. Many say that they value their human resources, but few actually give space and structure to the development of their people.

Leadership development in the organization starts from the ground up. However, not everyone believes that. It seems that leadership development is just for managers and above. Yet, when there is a crunch in capabilities, there is no clear succession plan – in the midst of the ever increasing difficulty in acquiring talent at the appropriate levels.

Leadership Development Begins With A Competence Based Structure

In many companies, developing competencies is never on their minds. It is a common belief that competency development is nothing more than tedious process of creating work for the HR department. Unfortunately, competency structures, especially for leaders, are necessary for a few reasons.

• Selection criteria become more specific and therefore, the organization will save money on recruitment of the appropriate talent.
• Specific criteria are available for existing employees to study in order for them to consider internal transfer, job rotations or even promotion prospects.
• Specific criteria can be put in place in order to evaluate performance and to maximize returns on performance.
• Training and development can be based on the competencies, thereby having a much clearer direction on the scope, duration and content of training; at the same time, such criteria make the training more directed and clear so that outcomes can be measured. In this case, your training and development partner should be able to construct empirical evaluations in order to assess the value of the training to your organization based on clear guidance from the company’s competency sets.

Difficulty To Convince Management?

Generally, to create a set of competencies, it is difficult to convince management about its utility. However, management needs to be clear on the following:

• Without a competency list, performance criteria cannot be objective. This will be detrimental to any organization because the workload an individual is expected to perform will become increasingly steep, with no end to the work in sight. Ironically, some Chief Executives believe that measuring a low employee turnover is sufficient to counteract this.  Sadly, employees that are not productive may not leave. After all, there’s no concrete way to justify their performance level. Social loafing can take place leading to lower productivity with the Chief Executive scratching his head to wonder why his employees apparently work hard, but the returns are limited.
• In addition, “loyal” employees may merely propagate old ideals and mindsets due to the entrenched culture that such HR practices have unconsciously created. People sink into complacency when performance criteria are not clearly stated and measured.
• If performance criteria are not in place, it is a clear sign that an individual role does not have a proper job description. Since the roles are not clearly spelt out, it may cause more friction for people who sign up for a job but end up feeling cheated that they are doing another task unrelated to what they signed up for.
• Likewise, clear criteria to describe the individuals range of performance ability will never be concrete. All performance appraisals will then be left to gut feel, and whether employee’s have a positive relationship with their immediate superior. This results in even greater unfairness, a drain on talent, and the desire to leave the organization.

Key Benefits Of The Competency Structure For Development Of Leaders

There are many benefits of having a good competency structure.

• Savings in terms of recruitment effort. You already have a clear job description and offer a job to a person talented to take on the job and still experience positive challenge and growth. It becomes a system, enabling people to be clear about what they are getting into.
• Fairness in the organization. When measured against clear criteria, such competencies will ensure that people are more motivated to learn from their coaches, mentors and leaders. Training programs directly associated with competencies that are measured will receive more positive response. It will be difficult to have double standards due to clear criteria.
• Being clear about the cost of losing talent. So, it seems that just as people are blindly proud of low turnover, the ostrich mentality is prevalent when people walk out their door. It’s simply: “oh, we can replace that person”. Rather than looking at the appropriate reasons why people leave and tightening HR recruitment and management measures, they brush it aside, thinking that there’s no cost for hiring a new person. If you’ve had a person in an organization for 3 years, there is a cost for talent drain. But if you’ve never measured it, you wouldn’t be worried about what you don’t know.  So, let’s not find out what we don’t know, so we won’t know what the cost is. Ironic, isn’t it? And we thought for a moment that top management was really interested in the impact of their efforts on their human resources.
• Performance management made objective. If one wants the organization to perform well, you need to know what the target it. Competencies can then give rise to clear achievement levels and lead the individual to strive toward their own level of success (and be compensated fairly for this). If a junior manager is able to determine what makes the 95% percentile in terms of performance, he can work toward it and know that his effort will be rewarded eventually (tying into compensation systems)
• Progressive development of talent. Too often, we promote people into incompetence (the Peter Principle). Why? Because we are not at all clear about the way that person has to function at the next level. When competencies are set up, employees can foresee the next level of progression, and learn the appropriate knowledge and skills at their present level and demonstrate some measure of potential. This will then ensure effectiveness of succession planning.

Is it tough to start a competency development process for your leadership? No. It’s definitely not as painful as not starting and waiting for your company to go to the 100s. That’s when it starts to get expensive and tedious. By starting early and involving the HR department in systematically identifying the jobs that are presently being done in order to maximize performance (even at a rudimentary level), it will give HR the ability to align selection and development processes to corporate strategy in order to yield positive returns over the long term.