Delivering for Best-in-Class Wholesaler-Distributors
March 8, 2017  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow
NAW-How Competency Models Give You a Competitive Advantage-Distributors in the Digital Era #7

Often the most important barrier for implementing a digital vision is developing the people skills required in your organization. Distributors might decide to hire their way to success, but bringing in outside people can be very disruptive, particularly when done in large numbers. Worse, incumbent employees may feel that they have been passed over. Developing current employees is a difficult task, especially if the required knowledge doesn’t exist in the organization. Even if it does exist, progress can be excruciatingly slow. One distributor offered the challenges it faced:

“We need to develop our people from start to finish if we are going to get results from our digital tools. We don’t know a lot about digital marketing. Our salespeople don’t know how to use data in their selling process. We’ve hired some analysts, but they are young and don’t know distribution. Our leaders didn’t grow up with digital tools and are uncomfortable about driving change. And this is just the start. We have a lot of work to do.”

To help address this need, we asked distributor leaders to identify their current methods for developing people skills. We found a mishmash of approaches. Some were easy to execute, but none were viewed as particularly effective methods for becoming a digital distributor. These methods included:

  • Job descriptions: These are necessary tools for recruiting new employees and they often carry forward to managing day-to-day activities while on the job. Job descriptions are not required for job execution, however. The language used to attract and screen applicants is not the same verbiage needed to guide specific behaviors required to achieve actual business results.
  • On-the-job coaching: In a perfect world, first-line managers would be skilled at coaching and committed to making coaching happen. Most are not, however, and companies seldom provide training. If they do, it is not sustained over time. Leaders do not walk the walk, providing coaching to their direct reports, and their managers follow suit.
  • Performance management: In truth, most employees look to their annual performance review to tell them how much their pay will increase or how large a bonus they will receive. Even when excellent performance feedback is given and received, it is after the fact — more about what you did and didn’t do, and only indirectly about what you should do going forward.
  • Functional training: When provided, training about one’s job perhaps comes closest among the approaches described here. Sales training is an example. But when provided by an outside company, translation may be required regarding what is required on the job. Or, it may only deal with part of an employee’s responsibilities. Or, it may be viewed as a distraction, a ticket to punch, and one that takes the employee away from real, day-to-day work.
  • Self-initiative: Motivated employees will seek out knowledge from books, industry events, and professional associations, and so on to help them advance. Again, this approach requires translation to your company’s specific expectations, but employees may bring back new and useful ideas. At worst, these activities are more about networking, pushing your employee to go elsewhere in search of rewards and fulfillment.

In our experience, none of these approaches have what it takes for communicating, in writing, the unique competencies that are required and the productive behaviors that will lead to the high-impact outcomes your company needs. But there is good news. In recent years, a tool designed for this specific purpose has come into use. It’s called a “competency model,” and we found a few distributors using it.  As one explained:

“We started looking at new approaches for value selling and stumbled onto competency models. We started with generic value-selling models and customized one for our approach. It helped. We are now creating competency models for all positions that are significantly changed by the use of digital tools. They work because we are clear about what is required for our people as we become a digital company.”

Competency models come in a variety of shapes and forms, but the best have several common characteristics. They list a manageable set of core competencies, typically between seven and 10. If they have too few, important competencies are left out. Too many, and they become a meaningless laundry list. Each competency is named with a word or two and comes with a definition of three to five sentences. It is important that the words in the definitions are the words you would choose for your company. This is where competency models become particularly valuable. Each competency comes with three to five behaviors that describe graduated performance outcomes – that is, specific behaviors for your company to achieve at good, better, and best levels. The results are extremely powerful and fill a huge gap in human capital management.

Competency models work because they combine experiences learned by companies that are more advanced than yours with the unique requirements your company needs to be successful. A good search, consultant, or recruiter can provide a list of competencies required for a digital positon. Gather lists from a few sources and this first step is completed. Then, identify the specific behaviors that are required by people in your company. In large part, this comes from thinking about the outcomes that your business requires as digital tools are used. Then, for each competency, identify good, better, and best behaviors. Again, this step comes mostly from your knowledge as you think about the basic requirements for success all the way through to those that deliver the most outstanding outcome for each competency. If these are not obvious, look to your top performers or network with distributors in your industry association.

The table below displays the framework of a competency model with a few details and descriptions.

Competency Model Basic Structure

You can create competency models for individual positions – salespeople, sales managers, digital marketers, customer service reps, and so on. There may be common elements that are important for all of your employees, but these should be kept to a minimum. A working competency model should help an employee from the first day on the job and throughout his or her tenure as skills and abilities (and performance expectations) develop. Competency models can be purchased, but the best are created organically, looking at your company’s requirements and considering the competencies and work style of your most skilled and productive employees. It helps to seek examples or the guidance of someone who has created competency models for others.

Once in place, competency models are highly effective tools used in a variety of situations:

  • Recruiting: A proven, in-use competency model is an essential input for writing a job description.
  • New employee startup: Competency models can provide excellent guidance for new employees.
  • Coaching: Competency models create better coaching through consistency and better communications. A manager and an employee may not agree on required competencies or on the employee’s strengths and areas for development. A competency model provides an independent, unbiased, and sanctioned tool for promoting better coaching conversations.
  • Self-assessment: Competency models allow self-starting employees to better understand their development needs and to seek sources for acquiring knowledge with an idea of how they will be applied on the job.
  • Online survey tools: Competency models can be put in an online survey form, with numerical ratings for assessment against performance. Comparison against an aggregated database can let any employee know where he or she stands. Managers can look at their team, see overall strengths and weaknesses, and develop an actionable development plan.
  • Job balancing: Competency models help define the transition from junior to senior job roles, and to align competencies across complementary roles that work together.
  • Workforce restructuring: When upsizing or downsizing, it pays to have a plan for retaining critical competencies and for placing employees against new roles and new expectations.
  • Post-acquisition convergence: Competency models can help an organization work toward common role definitions and execution of common processes, and help diminish the baggage that is carried forward in unspoken rules from previous organizations.
  • Becoming a digital distributor: The granddaddy of them all, competency models can play a critical role for helping your people develop the critical competencies for executing your digital vision.

Bottom line: Once you have created a competency model, use it. Through experience, you will make it better and better, and it will become engrained in your business culture as a tool for improving performance, launching each successive digital tool, and ultimately, competing on the strength of your people in highly competitive digital marketplaces.

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Business Innovation to drive awareness, advocacy and excellence for B2B innovation, and to enable an exchange of ideas between leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve go-to-market excellence across a wide range of industries in developed and emerging markets.

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