Competence Management in Times of Digital Transformation

Active competence management: door opener for a successful future

Digital transformation places new and different demands on employees more than ever before. How can companies meet this challenge? Effective competence management is an important instrument that many companies still criminally neglect.

Whether it is the first industrial revolution or digital change: well-trained employees and managers have always been indispensable for companies. What has changed with the fourth industrial revolution is the fact that almost every industry is currently experiencing serious upheavals in an unprecedented dynamic. Artificial intelligence and information retrieval systems provide information within seconds, analyze facts and make forecasts faster than any human being can.

The knowledge-based society involves a change of paradigms. Pure technical and methodological knowledge is no longer sufficient to meet the challenges of the future. What is almost more important is what employees do with their skills, how they tackle problems in practice. Especially in complex situations, in which the known rules, old knowledge and skills are no longer sufficient to solve the problem, employees must be able to solve the unknown challenge themselves. And this is exactly what they need, the appropriate competence in several fields of action. This requires new learning spaces and new learning concepts through further training – and the introduction of systematic competence management.

Competencies are not “skills”

But: What exactly is competence management? Active and strategic competence management is an important tool to deploy employees according to their qualifications, to promote their careers and to pursue the competence requirements of the company which are necessary to achieve the goals they have set themselves.

The basis for competence management is a competence model that lists or respectively groups existing and required competences. A competency model consists of a set of key competences selected in accordance with a company’s business objectives. By way of example, these may include:

  • Professional competence: Specific knowledge, skills or abilities required to carry out professional tasks.
  • Methodological competence: the ability to tackle tasks and problems in a structured and effective manner. Learned working methods or solution strategies must be able to be applied and further developed independently.
  • Social competence: This is becoming increasingly important in the distributed world of work and self-organized work and includes all skills that are effective in relationships with other people.
  • Personality competence: This allows a person to act in a self-organized and reflexive manner. This requires the ability to assess oneself, to develop one’s own talents and to develop creatively.
  • Leadership competence: Developing organizational requirements, initiating change, guiding and enabling employees and teams belong in this area. This also includes reviewing performance and providing constructive feedback.

The last example shows that competence clusters cannot be viewed absolutely separately. Because a portion of social competence is necessary for constructive feedback.

Typical challenges, hurdles or errors in the introduction of a competency model are:

  • Identification of too many competences without comparison with the company goals.
  • Lack of or difficult identification of business-critical competences.
  • Confusion of specialist knowledge with competences or a one-dimensional focus on specialist competences.
  • No account is taken of competences that are not currently part of the job description or work organization, but will play an important role in the future.
  • Collecting competences without the participation of employees. They should know through their daily activities what competence they currently need for their tasks or what they are lacking.
  • No involvement of managers in the survey of the required competences.

Effective competence management: success factors

In fact, competence management reflects the corporate strategy. It is therefore essential that the company has a clear plan of what business goals it pursues, how it can achieve these goals and what competences it needs to achieve them.

Therefore, the analysis and definition of areas of competence and the definition of the concrete characteristics for tasks, activities and job profiles derived from them are indispensable. It is also important that the competences of employees are determined independently, comparably and reproducibly. In addition to the development of relevant competence profiles, it is important to install an independent competency assessment and assessment of the employees and to counter the results of the competence gap analysis with the development of programs that are suitable for closing these competence gaps. Those who do not have the necessary know-how in-house are well advised to call in external support.

Advantages of effective competence management

Conclusion: Effective competence management determines the current situation and a forward-looking inventory of the skills of all employees. By defining job roles and their associated competences, executives are able to identify strengths and skill gaps more quickly and thereby actively turn their attention on the employees’ performance drive. To this end, the company is actively counteracting the risk of a reduction in performance and reduced value added.

It makes sense to set up a competence management system as a strategic staff unit within the company. It can provide information on targeted learning opportunities for skills development with the aim of improving individual and organizational performance in order to achieve better business results. Training without added value for the company is a thing of the past, critical skills gaps are identified more quickly and actively closed. And: Experience has shown that effective competence management also increases satisfaction among employees and managers, which benefits the corporate climate, team motivation and thus productivity.

Tobias Kirchhoff
Tobias Kirchhoff