denotes premium content | May 22 2013 Feature
posted 1 Jul 1999 in Volume 2 Issue 10
Mind the gap
London commuters know very well the
often repeated announcement to mind the gap while getting on and off the
underground, but are managers minding virtual gaps in their businesses?
According to Freddie McMahon & Kelvin Moore, a growing competency gap exists
in companies which is accelerating investment failure. Here, they focus upon the
investment risks relating to strategic and tactical initiatives in most
organisations today. The objective of the assessment tool is primarily to
challenge readers and increase awareness of this emerging issue. Awareness of a
problem existing is half the battle towards solving it.
There can be no doubt that speed and
complexity in business is increasing exponentially. The knock on effect is that
people and organisations are struggling to keep pace. For most organisations,
the competency gap is also widening exponentially and so are their investment
risks as a direct consequence. By implication, the competency gap is widening so
fast that traditional training and development is no longer a sustainable
instrument in its own right. However, the situation is even worse than many may
first suppose.
Business process re-engineering continues to drive
down operational costs without due consideration to the loss and exposures caused
by knowledge walking out of the organisation. It has further compounded the
situation by creating a stress culture whereby the notion 'employability for life'
replaces 'job for life'. This means an organisation's people are now typically assignment
based with the pressure that a knowledge worker is now judged to be only as
successful as their last one or two assignments. Part of the reward for success
is yet another new assignment with new challenges that have little tolerance for
learning curves. Business process re-engineering has decimated the notion of
mentoring; thus removing one of the most effective ways of learning ever
devised. The competency gap for the average knowledge worker is now 40 training
days with the situation getting significantly worse year by year.
Internally within
organisations today, people issues are said to be the number one reason why
strategic and tactical investments fail to meet the original business
objectives. People have replaced technology as the prime culprit. Yet people
risks, quantified in terms of competency gap, are typically missing from
investment decision making. CEOs, CFOs and CIOs are jeopardising their
organisations by not managing their competency gap exposures in synchronisation
with their investments for transformation. There is an emerging trend that
stakeholders (who include, customers, partners, journalists, investment
analysts, shareholders and regulators) will demand greater visibility and
accountability in relation to the people risk exposure. They are likely to press
for its inclusion as part of the standard reporting.
Only organisations that achieve market
leadership in competency development will be able to manage their investment
risks to the satisfaction of all stakeholders. The following diagram illustrates
the growing strategic risks in relation to the market pace of change for
organisations that are leaders in competency management and for those that are
average.
PDF Download of Self Assessment
Tool
Do the
results show that competency risks are being well managed or poorly managed? Do
representatives from different functions assess your organisation's competency
risk management abilities differently or similarly? Do strategy, finance and
human resources speak with one voice or is there perhaps not even a conversation
taking place? Does the CEO/CFO/CIO believe the investment competency risks are
understood and being well managed?
If the results suggest you are a world
leader in competency risk management then hold on to your position and
capitalise on your good work and foresight. If you are a laggard then your
business may simply not survive without fast and effective remedial action.
Organisations
that fall between leaders and the laggards can draw little comfort. The market
is becoming less tolerant of mediocrity; the consequences of investment failures
are becoming just too big to ignore and will not be tolerated by
stakeholders.
What is the competency gap?
Put simply, this is the gap between
what the organisation's people can execute and what they must be able to execute
to deliver strategic and tactical initiatives both now and in the future. People
include everyone in the value creation process, and not just those directly
employed by the company.
Competencies comprise skills, knowledge, experience and behaviours, and
must be assessed and developed in the context of each organisation and its
market.
Are investment competency risks measurable and
manageable?
Yes they are but new techniques and business models must be involved.
Industrial era approaches are no longer sufficient. Organisations need to
understand and foster the intellectual capital imbedded in its people,
structures and relationships. It is no longer a matter of more and better
training.
Practical advice and solutions fall outside the scope of this paper and
form the core work of its co-authors working in collaboration with other
parties.
What are the next steps?
There is little doubt that
organisations will need to manage their competency exposures in such a way to
gain the confidence of external stakeholders such as customers, shareholders,
partners, journalists, investment analysts and regulators. Simply saying our
people and their training are important will soon not suffice. Outside forces
will demand hard evidence to show that an organisations' human capital portfolio
is increasing its value in line with market needs. External accreditation will
not suffice in its own right unless it reflects benchmarks against market
forces. Organisations that are unable to provide such evidence will attract
greater scrutiny and exposure. Potentially, this could seriously damage their
brand and position within the market place.
The meteoric rise in
internet e-commerce and its associated complexity and speed is compounding
investment risks growth. All organisations need to master the new associated
competencies if they are to survive. Managing internet e-commerce investment requires
an understanding of the breadth and depth of competency risk (see Futurelet 6 'A
competency guide to internet e-commerce').
Footnotes
What is
a © Futurelet?
Time is now becoming more scarce than money in knowledge based
businesses. With this in mind, a ( Futurelet provides a brief strategic insight
into a emerging problem with a guidance statement on the way©©© forward. It is
designed to provoke a line of thinking which stays with the reader regardless of
whether they agree or not with the analysis.
Other iqport foundation Futurelets
available as knowledge assets on the iqport trading exchange www.iqport.com are listed below.
©Futurelet 1
Do you
as an organisation blame your people for failure to deliver?
Why will this
excuse be soon no longer tolerated?
©Futurelet 2
Is there an emerging
new market for the trading of intellectual capital?
Why is the timing right to start
trading intellectual capital futures?
©Futurelet 3
Can intellectual
capital Investors help funding new business research?
Why is the timing right to fund
business research differently?
©Futurelet 4
Integrating knowledge
management into customer loyalty.
©Futurelet 5
A vision of a
knowledge exchange.
©Futurelet 6
A competency guide to internet e-commerce
Freddie McMahon is the
inventor of the global trading exchange business model and is a Director and
Chief Strategy Officer of iqport. Freddie is a thought leader in intellectual
capital and internet e-commerce, and his work is driven by a pragmatism and
desire to assist individuals and organisations prosper in the knowledge era. He
can be contacted at:freddie.mcmahon@iqportfoundation.com
Kelvin Moore is a
founder member of iqport and a Director of the operating company. He was one of
the first people to create a consortium MBA and mentoring programme for high
potential leaders representing blue chip companies from financial services,
accounting and consultancy, oil, telecommunications and from government. He can
be contacted at:
kelvin.moore@iqportfoundation.com
www.iqportfoundation.com
www.iqport.com
