Ensuring that your firm has the required technical competencies now and in the future is key to the business surviving and prospering, writes Wayne Brockbank
Almost every industry is built on a small but essential foundation of technical knowledge and skills. Without such technical knowledge and skills, not only would individual companies not exist but entire industries would not exist. Technological evolution has been the foundation of industry and economic growth at least since the mechanisation of the cotton industry at the beginning of the industrial revolution, and continuing on through steam engines, railroads, electrical power, cars, planes, computers, telecommunications and biotechnology. Nearly all companies must excel at many activities, however, at their core are a small but essential number of technical competencies that they must have to survive and prosper. Examples include automotive designing and manufacturing engineering at Toyota, geology and petroleum engineering at ExxonMobil, actuarial science at Assurant and molecular biochemistry at Eli Lilly.
The importance of building such technical competencies is emphasised by the ongoing “war for talent”, as shown in the highlighted statistics. To be able to create and sustain technical competencies, it is useful to clearly define their characteristics and to differentiate technical competencies from cultural and behavioural competencies. Two attributes differentiate technical competencies from cultural or behavioural competencies. Whereas cultural capabilities (e.g. passion for speed) are unique to individual firms, technical competencies are unique to an industry (e.g. financial investments in the investment banking industry); whereas cultural capabilities are developed and reinforced by subtle and idiosyncratic practices, technical competencies may be developed by taking a course at a university.
To robustly target and develop technical competencies, four steps are necessary. The first step is to identify the two to three most critical technical competencies that your firm must have if it is to participate in your selected industry. Three questions help to identify your company’s required technical competencies:
- If you were to start a new company in your industry, what is the foundation knowledge and skills that are required?
- What technical competencies are most likely to serve as the fundamental sources of competitive advantage?
- Which technical competencies would you be most likely to never outsource?
Second, evaluate the gap in technical competencies relative to you competitors. I have found that applying a five-point scale is useful for this purpose: 1 = far below industry average; 2 = below industry average; 3 = industry average; 4 = above industry average; 5 = industry best.
“In today’s fast-moving environment of technological turbulence, even some of the world’s most successful companies perceive a noticeable gap in their required technical competencies”
Indicate on this scale where your business is today and where it needs to be in the next three to four years. The gap will clearly show if you have a technical capability problem. I am finding that in today’s fast-moving environment of technological turbulence, even some of the world’s most successful companies perceive a noticeable gap in their required technical competencies.
Third, determine the relative number of individuals in your company that need the prioritised technical competencies. Is it many, medium or a few? This is an important intermediate step that has direct implications for the HR practices that will be used to fill the gaps.
Fourth, determine the HR practices that need to be applied to fill the identified gaps. The most frequent alternative practices are recruitment, promotions, classroom training, on-the-job development and short-term consultant contracting. In most cases, two practices will have greatest impact on creating and sustaining technical competencies – one will be of primary importance and one will be supportive of the first. For example, if you need a few people with a given competency, it may be most effective to rely on recruitment and on-the-job development. If many people need the skill, using an external consultant to provide large-scale classroom training might be most effective.
By following these guidelines, you can identify, prioritise and determine the actions that you might take to ensure that your firm has the required technical competencies now and in the future.
Two keys to building technical competencies
- Line executives tend to like going through these steps as a group exercise quite a lot. It gives them clarity concerning which competences are most important for business success. It also gives them a clear agenda for building the most important competencies.
- Even while the war for technical talent continues, it is useful to be mindful that most leading competitors in a given industry will tend to have roughly the same raw technical talent over time. Therefore, the critical issue for most firms is not the talent they have but rather what they do with their talent once they have it. And that tends to be an organisational or culture issue and not simply a raw talent issue.
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