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Leadership can make or break an organization. Despite the enduring myth of the “born” leader, in most cases effective leadership is the result of a carefully crafted development process. In order to achieve sustained business success, companies must find ways to identify and promote vital skills and behaviors in their employees that will bring about consistent and measurable results.

A well-designed competency model is one of the most effective tools for establishing what characteristics an effective leader should possess. While they’re primarily used to guide hiring, promotion, and performance evaluations, competency models also provide a number of additional advantages. Here are a few ways these models can benefit an organization.

Consistency and Clear Expectations

Employees like to know what an organization expects of them. This is especially true of millennials, who are accustomed to receiving feedback regarding their performance and want to have a clear idea of how to advance their careers. A good competency model serves both roles by establishing very specific skills and behaviors necessary for success within an organization.

For this very reason, it’s often beneficial for employees to take part in the process of creating these models. By providing feedback throughout the model’s development, employees can provide a different perspective on what leadership skills are most effective and necessary. Being involved in the process also makes them more likely to buy into and use the model in the future.

A well-designed competency model has the advantage of being fair and reasonably objective. Employees know what criteria they must meet and the skills they must acquire if they want to advance their careers. This allows them to take ownership over their own development, which can be both empowering and reassuring.

Cultivate Leadership Strategies

If an organization is experiencing high turnover, frequent employee-related complaints, or poor business performance, it’s worth reevaluating their leadership competency models. In many cases, these problems can be traced back to leaders who aren’t prepared for their positions or lack the skills necessary to be successful. While it may be tempting to place the blame on a few “bad hires,” the reality is that most of these people were put in a position to fail by a flawed hiring or promotion process.

Organizations can take the first steps to resolving this problem by emphasizing what outputs they want get from their leaders. At their core, competency models must reflect the company’s overall strategic goals. When they do not align, leaders will struggle to find success.

Focusing too heavily on technical competencies, for instance, can produce leadership candidates who know how to perform a variety of specialized tasks, but lack the soft skills necessary to manage their teams effectively. There is a tendency to take these skills for granted, but ignoring them in the early stages of development can leave candidates woefully unprepared for leadership positions later in their careers.

A good leadership competency model should be aligned with the organization’s goals to continuously develop leaders who help to drive its mission forward. By identifying what successful leaders have done to achieve strategic results, they can develop a model of observable and measurable behaviors that can be integrated into existing systems for hiring, promoting, and evaluating candidates. While getting the right competency model in place isn’t a “cure-all” for a struggling company, it can go a long way toward identifying the reasons behind existing problems and laying the groundwork for developing long-term solutions.

Reframe Expectations

The process by which organizations hire and promote employees can have a tremendous impact on performance and culture. When business circumstances change, companies need to find ways to adapt with them in order to survive. But this process is rarely easy and institutional changes take time to implement. Employees become can become set in their ways, especially if they’re accustomed to working under a different set of expectations.

Establishing new competency models is an effective first step in reframing what an organization expects from its employees. Strategic changes often require employees to develop a different set of strengths and skills. Competency models provide guidance for the types of characteristics and behaviors needed for future success in leadership positions.

For example, when Pep Boys made the decision to shift to a more customer service-oriented company, one of the most important steps it took was to implement a new set of competencies that reinforced the cultural change. Rather than basing hiring and promotion primarily on mechanical skill, the company emphasized the development of social skills like communication and conflict resolution. By changing the expectations for employees and leadership, Pep Boys made a commitment to lasting change that would better position it for success in a dynamic industry.

Better Succession Planning

One of the major challenges facing organizations today is developing the next generation of leaders. Surprisingly, over 70% of executives don’t believe their leaders are ready to lead their companies into the future. As baby boomers in leadership positions age out of the workforce, the need for solid succession planning is more important than ever.

Since competency models play a major role in identifying and developing future leaders, it’s imperative that organizations establish the appropriate criteria for these candidates. A well-designed competency model that’s in keeping with an organization’s goals and values can save both time and money by helping to select and develop high-potential employees more effectively.

It’s important to keep in mind, however, that a competency model isn’t a foolproof method for producing the “perfect” leaders. Too much emphasis on creating a checklist of what makes a good leader can diminish diversity within an organization and inadvertently select for qualities that might not contribute to leadership success. Competencies should also not be treated as endpoints. They are skills and behaviors leaders need to develop on an ongoing basis rather than benchmarks to be met in order to qualify for a promotion.

With a strong leadership competency model in place, organizations can make sure they’re directing the appropriate candidates into the right positions and getting the most out of them after they’re in place. While starting out with the ideal competencies is a challenge in itself, the ever-changing demands of today’s economy require companies to revise these models periodically to make sure they’re still in line with their culture and goals. As a new generation of leaders move into positions with greater responsibilities, establishing good leadership competency models is more important than ever.