Do Competency Systems Produce Real Results?

We recently did a study to see if a Competency System we built for a client produced any measurable results, or if it was just a "nice to have" system that management preferred to use.  Our client is within a large pharmaceutical company and leads a sales force which sells to institutions and hospital physicians.  The primary difficulty you have in assessing the real impact of a pharmaceutical rep's efforts is that, outside the vaccine and medical device arena where sales can be tracked by order, it is very difficult to measure exactly what impact the rep has on prescription writing of any given physician.  There are so many factors that impact the sale that the direct linkage between rep activity and actual sales is a dotted line at best, particularly in the institutional or hospital setting.

The first issue we faced was how to design a survey process to gather sufficient valid data to determine whether consistent application of the competency factors actually resulted in higher sales, performance ratings, or customer satisfaction rates.  We deployed a survey process first to representatives, asking them to rate their own abilities in consistently demonstrating various behaviors within the competency model.  Next, we ask the reps' managers to rate the reps' performance in consistently demonstrating the competency behaviors.  After we had all this data, we compared the responses to actual sales results to see if in fact there were significant correlations between consistent demonstration of competency behaviors and higher sales results.

Those reps who rated themselves, and whose managers rated them, higher were significantly producing increased sales.  The conclusion then, is that if you create a competency system that is relevant to the factors that lead to success, and the factors/behaviors are consistently demonstrated in daily activity, you will get better sales results.  Here we were able to produce actual numerical correlations of the relationship between consistent demonstration of competency behaviors and higher sales results.

Everyone has felt that there was some sort of relationship between competency and results, but to actually measure this using individual ratings and statistical correlation in a very straightforward way has rarely produced significant results.  In our study, we have shown that it is the consistency with which the individual demonstrates the described behaviors which results in higher productivity and better performance ratings, as assessed by managers and by individuals.

We are just entering the last phase of our survey process, which is determining whether customers note the consistent demonstration of competency factors during their activities with reps.  We'll let you know if we find a correlation between the customers' perceptions of competency and actual sales results, once our survey results are in.

If you are interested in learning more about how TalentFirst can help you to measure the relationship between your performance management system and actual productivity of your people, give us a call at (908) 725-2500.  We'll be happy to speak with you further about the process.

 

Prudent Risk Taking and Other Such Terms

Consultants usually have their own jargon that they consistently use to describe various behaviors their clients demonstrate.  Over the years, TalentFirst has devised or adopted several of these terms.  The interesting thing to me is that as we work with clients for the long term, many of them begin to speak in the same terminology.

Here are some of the terms that we have used and that clients have adopted for their internal use.

• Prudent risk taking - this means that people are able to make decisions on the basis of limited information and that they will rely on their intuition or their gut reaction to choose a course of action.
• Act with urgency - this means that when opportunities arise, individuals with rise quickly to take advantage of the situation, particularly when their is an obvious gain at stake.
• Strong resiliency - this means that people are able to bounce back quickly when things go wrong.  They are able to move forward in the face of setbacks or challenges.
• High energy - this means people have the gas in their personal tanks to drive action consistently throughout the day.
• Low urgency - this means that people have less drive than may be needed to achieve success in an organization.

So where did these terms come from?  Most are adaptations from the scales within our assessment tool, the Behavioral Insight®.  Interestingly enough, as clients begin to utilize metrics, they begin to think in those terms.  Such tools provide an objective benchmark system against which to compare various individuals or groups of individuals within an organization. They become descriptors of the culture and enable team members to understand what good behavior looks like.

In a way, I suppose, this is a compliment to us and our work.  To me, it is also a way to know that we have made a positive impact on an organization and perhaps helped people to understand what the cultural expectations are.

Changing World of Competency Models

We've been preparing competency models for our clients for over 17 years.  As you recall, we define competency as skills, knowledge, and abilities applied for a specific outcome.  Only when we understand what the real outcomes of performance are can we build complete models that really help people perform their best.

Lately, we have been asked to align our competency models to various web based systems, generally covering two to three different levels of jobs within the same family.  Often these models will be used in combination with a more global statement of competency that is based on the company's value or vision statement.  I am still unsure whether this is a good approach or not.  But of course, we do as our customers ask and endeavor to establish clear expectations for performance within the broader context of a group of jobs.

Most of these broader models use a common group of dimensions and define those dimensions using various levels, such as Learning, Applying, Leading, and Expert.  The object here is to define the skill, knowledge of ability in behavioral terms, and to discriminate between the four levels using appropriate examples.  Here is one I am working on today:

Financial Acumen:

• Learning - Understands and can accurately interpret financial statements, such as income and expense, balance sheets, profit and loss, and accounts payable and receivable, to assess the state of business.
• Applying - Uses financial statements to identify trends and to allocate resources to maximize profitability and enhance growth.
• Leading - Can fluently discuss financial results based on the analysis of reports and tools in order to identify opportunities for increased profitability and evaluate performance of the business.
• Expert - Serves as a source of reference in the use and interpretation of financial data and analysis for others. Uses financial tools to develop and manage a profitable business, which maximizes the return on investment of resources.

As you can see, there are differences between the levels, and the primary advantage of such a model is that when the organization restructures, we don't have to redo all the models.  We simply edit the content, then create a new job map to establish the standards for each new role.  The job map shows what level of competency a particular job will use for each of the dimensions.

While this model does not include as much content as I am used to writing for a model, I will say that it challenges you to make sure that you write succinctly and that you cover the key points.  The thing the writer must avoid, however, is the inclusion of examples. While users like those, they can cause a model to get out of date very quickly.  Examples might be better handled elsewhere, such as in performance rating guidelines or behaviorally-anchored rating scales.

I suppose as we do some more analysis of the data to see what the actual correlation of demonstrating competency versus performance results, we will be able to see if the old way works better, or whether there really is no difference using this approach.  I'll keep you posted.