The term 'competency' is used in many different situations. Workers performing a role are considered competent if they are qualified to accomplish their assignments. American law considers defendents competent if they can understand the proceedings which they are participating, and can rationally deal with their counsel. Companies have core competencies, which characterize fundamental factors specific to the business's operational success. Each of these uses of the abstract term 'competency' involves a different interpretation for what may seem like the same idea. Upon closer examination, however, each is also highly dependent upon the context in which the situation is evaluated, the qualifications of the evaluator, and the implications of the determination. Further, the criteria for conducting these comparisons are often not well defined in advance; in such situations, this may cause the evaluation itself to be subject to evaluator biases and political considerations, which in turn may cause outcomes to be quite different than expectations - especially given the Dunning-Kruger effect, which explains why most self-assessment competency evaluations are so unreliable.

Strategic decisions that directly shape the nature of an organization and its key resources are obviously important to any enterprise. Competence-based approaches are widely promoted and are often cited as a best practice within organizations and industries. Having a trusted methodology to reliably perform assessments of alternative competence sources can potentially offer a group a significant competitive advantage over time. Alignment with such strategies are often seen as key to developing a sustainable competitive business advantage over time.

There are literally thousands of consultants who are anxious to come in and help you do a competency analysis using their framework. That's the real reason the word 'competency' is used so much - we all want to be sure we're counted as competent. Certainly, no individual or organization wants to be declared incompetent! But is there a well-formed and consistent understanding of the meaning of this concept of competency, which can guide its application and assure that its potential value is realized? Is there an adequate elaboration of the requirements under which competencies should be evaluated, so that people might perform the proper analysis consistently, and make appropriate decisions within that scope? Such questions can only be answered by exploring these underlying concepts in more detail, in the series of articles below.