What is the difference between a competency and a capability?

November 1st, 2011 by Sarah Green Leave a reply »

Increasingly Zircon Consultants are finding that our clients are asking for us to design Capability models rather than Competency models. So what is the difference? Ruth Sweetman our trainee Psychologist has done some research to understand the difference. We have found that the research is rather contradictory, while some authors use the two terms interchangeably others believe there is a real difference. We have therefore created a definition from our research and experience of working with clients in this area to help clarify the difference.

    Competency: – A competency model describes the behaviours and skills required to excel and succeed, in other words how an organisation desires their people to interact and behave. They enable mutual understanding of what effective looks like in order to help people understand their strengths and development gaps.
    Capability: – A capability model tends to measure organisational attributes rather than people attributes. Dave Ulrich defines these as “the firm’s ability to manage people to gain competitive advantage”. Capable people demonstrate the skills and behaviours required in the role, whilst at the same time having high levels of self-efficacy. They know how to learn, they work well with others, they are creative and, most importantly, they are able to use their competencies in novel as well as familiar circumstances. They demonstrate the behavioural competencies, whilst being capable in the role.

Indeed Blumberg (2011) and Myszak (2011) suggest that People Competencies should be defined in addition to Organisational Capabilities. Blumberg (2011) also challenges that demonstrating a capability does necessarily mean they have a high level of performance. We also need Key Performance Drivers (KPDs). KPDs to ensure that capable behaviour is valid and therefore has a positive impact on performance. High capability in areas not related to the KPDs do not therefore produce high performance. Blumberg (2011) therefore proposes the following model when defining Competencies or Capabilities.

Competencies -> Organisational Capabilities -> Key Performance Drivers (KPDs) -> Performance

Both competency and capability models therefore describe the factors that differentiate the best from the rest, however capability models go that one step further and describe the behaviour required beyond competence, it is therefore a more stretching and aspirational model than a competency model.

It must be noted however, that the most critical element of both competency and capability models are that they are future focused. Both models need to focus on the future requirements of the business, on change and how employees need to deal with these unfamiliar circumstances.

We at Zircon make sure that both our Capability and Competency models can measure future behaviour by conducting strategic visioning interviews with the business leaders at the start of the project. These interviews are designed to understand the strategy, goals, objectives and future requirements of the business and the way people need to behave; the skills they need to demonstrate and the knowledge they need to display to succeed and exceed in the future.

If you would to talk to our consultants about how to design either a competency or capability model, please contact Dr Amanda Potter.

Written by Ruth Sweetman and Dr Amanda Potter. October 2011.

Max Blumberg and Anders Myszak (2011). Linked in discussion, Accessible at:
Ulrich, D. Cited in Center for Creative Leadership & Vangent (2007). Executing Organizational Strategy: Achieving Success through Talent Management.
The Oxford Dictionary (2011), Accessible at: http://oxforddictionaries.com/

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  1. Amanda Potter says:

    Thank you James Allerdice from HSBC for his comment to this blog – in his view…

    Capability – Someone is capable of performing this task/activity/function either now or at a point in the future
    Competency – Someone has a demonstrable level of competence to perform a task/activity/function at a benchmark level

  2. Amanda Potter says:

    Thank you James Bywater for his comment:

    My take on this is that they are synonyms but capability has some advantages:

    1. More positive at the low end
    2. Avoids the debate in the strategy literature about business rather than individual core competencies
    3. Avoids the old competence vs competency divide
    4. The MCI (Management Capability Index) is newer and shinier!

  3. Amanda Potter says:

    Thank you Damon Herft for your comment via linked in:

    I Just wanted to feedback that this article was really helpful to me. I have sat through numerous presentations on this before and never really, truly, understood the difference.

    Your team’s clear concise explanation nailed it!

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