Wednesday, May 16, 2018

Of values and competencies

“If we fail to clearly differentiate between values and competencies, we are devaluing the values!”, said the Organization Development Manager to the HR Business Partner. They were discussing the plight of the new hires in the organization who were confused by similar-looking names that they come across in the list of organization values and in the competency framework of the organization. Since this is quite a familiar situation across organizations, let’s try to explore the domains of values and competencies in a bit more detail in this post.

To begin with, let’s understand these two concepts more deeply. Competencies are a combination of knowledge, skills and attitudes that lead to success/superior performance (e.g. in a job, in a function, in an organization etc.) Values are the things that the organization ‘values’ (i.e. consider to be important) and hence values are deeply-held beliefs about what is most important.

Most of the confusion comes because we often don’t take the organization values seriously. In many organizations, they are an ornamental piece (i.e. they don’t really influence decision-making) and they harmlessly exist in the posters on the walls of the organization and in the slides of PowerPoint Presentations(typically in the elite company of the vision and mission statements of the organization).

To me, something should be called a value only if it is so important (so valuable and so core to the organization) that it would be exhibited even if it leads to competitive disadvantage or even a loss for the organization.  Since competencies (by definition) are linked to success, this clearly brings out the difference between competencies and values.In a way, competencies are about how to win and values are about how to live, and winning has to be done within the overall context of living!

The difference between values and competencies are evident in the typical manner in which they are arrived at. Competency frameworks are ‘designed’ where as values are ‘discovered’ or ‘crystallized’. In a way, competencies are more a matter of the mind where values are essentially a matter of the heart!

Typically, values are identified at the organization level (i.e. there is only one set of values for the organization) where as competencies can be defined at job, function and organization level (based on what leads to success at each of the levels). Competencies are developed whereas values are aligned! Addressing competency gaps in the employees is much easier as compared to addressing lack of alignment between the values of the employees and the values of the organization.

The competency frameworks are often revised much more frequently (based on changes in business environment and strategy) as compared to the values for the organization. It is interesting to note that the organization values are often a reflection of individual values the founding members of the organization. While the values of the organization can be shaped to some extent by the members of the organization and by significant events that shape the organization over a period of time, values remain relatively more stable as compared to competencies. The relative stability of values is also because the fit between the individual values and the organization values (the so called ‘culture-fit’) is often a criteria in the selection process! In a way it make sense, as inculcating values is a long process!

It is interesting to note that while the same thing can be a competency or a value, the implications are vastly different. For example, if ‘customer orientation’ is a competency, we will probably understand customer needs deeply and meet the needs better that what our competitors do so that the customer is willing to pay us more. But if ‘customer orientation’ is a value, we would meet a commitment made to the customer even if it leads to a loss for the company (even when there are ways to wriggle out of the commitment). So while values might look nice and innocuous, they definitely need skin in the game! Competencies should be exhibited in the context (spirit and boundary conditions) provided by the values!

Yes, deeply-held values can guide behavior when no one is looking (and even shape how we experience and interpret the world) and values can be a great culture-building tool (In a way, culture is encoded in the DNA of values!). But if there is a disconnect between the espoused values and the enacted values, it would lead to confusion and loss of trust that can be very damaging to the organization culture. Technically speaking, it can be argued that values are 'value-neutral' (in the sense that what defines them is their supreme importance to the group and not their correctness according to some external ethical standards). But we must remember that each group is part of a larger society and there are some basic standards of ethics that are largely accepted by most of the current human populations!

So,  what does all this mean? I am all for leveraging the power of values so long as the values are really valued. That is, we should include something as a value if and only if it is so important to us that if required we would be prepared to take a a hit to the business for it.

Identifying the values is only the first step. After that entire chain of activities including clearly describing the values and articulating why values are so important, creating and communicating representations/examples of how each of the values play out in the various parts of the business, ensuring that the leaders visibly demonstrate the values/are role models in living the values, conducting values workshops across the organization to enable the employees to understand what exactly each of the values mean in the context of their jobs so that they can live the values more completely in their jobs, collecting and celebrating/recognizing outstanding demonstrations of the values across the organization, measuring the actual experience (of lack of it) for the values across the organization and taking action to reinforce the values where needed etc. begins! Of course, we must validate that the policies and processes in the organization are in alignment with the organization values.


How strongly a value is held decides the extent to which it influences decision-making. Also, if there are multiple values, how strongly each one is held becomes the deciding factor when there is a situation where the values are in conflict (i.e. where we have to prioritize one value over the other). Since values usually ‘goody goody things’, often we don't even consciously think about the relative importance of the values to us, unless we are forced to choose between values (and hence the importance of doing an exercise like 'value auction' that forces us to prioritize the values  as part of value clarification/crystallization sessions)
 
Hence, while values are very powerful and useful they also involve hard decisions and hard work! So, 'handle with care'!!

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