The term 'competency' is used in many different situations. Workers are considered competent if they are qualified to successfully complete their assignments. American law considers defendants competent if they can understand the proceedings in which they are participating, and can rationally deal with their counsel. Organizations rely upon developing and protecting their core competencies, which enable them to focus on the fundamental factors specific to achieving their business's operational objectives.

Consider the BP, the third largest energy company in the world. After the Deepwater Horizon Oil Spill, few would consider it competent; yet throughout its spotted history, its leadership claimed that financially, it was not only competent, but was one of the premier companies in the world. At the same time, it's environmental and human rights records were widely regarded as abysmal.

Hydrocarbon exploration is a high risk business; should a less than perfect record be considered incompetent? Many workers have criticized that BP's repeated emphasis on cost-cutting could have contributed to the accident, but such cost pressures are present in nearly all competitive businesses. As the results of investigations into the accident unfold, it is likely that multiple factors will have contributed to the disaster, though it is possible that the accident could have been avoided with the most basic of procedures. If the battery in one of the wellhead's dead man's switches had been replaced in a timely fashion - a routine maintenance operation that a competent organization should expect a competent worker to perform to avoid such catastrophes. In the court of public opinion, BP (and its employees) may never recover, all for the lack of a simple battery replacement.

Each of these perspectives of competency - corporate, legal, and personal - may initially seem like they are utilizing very similar ideas for somewhat different situations. Upon closer examination, the specific meaning for competency in each of these situations will actually be highly dependent upon the context in which the situation is evaluated, the criteria of the evaluation, the qualifications of the evaluator, and the implications of the determination. Further, since the criteria for conducting these evaluations may not be well defined in advance, the evaluation itself can be subject to evaluator biases, political considerations, and other factors which in turn may cause outcomes resulting from competency determinations to be quite different than expectations, and produce outcomes quite different from expectations. For example, the Dunning-Kruger effect by itself can explain why the results of most self-assessment competency evaluations are so often determined to be unreliable.

Strategic decisions that will directly shape the nature of an organization, and ultimately determine the choice of its key resources, are critically important things to get right. The real reason the word 'competency' is used so much in today's businesses is that we all want to be sure we're found to be competent when it counts. Leveraging a proven competency assessment methodology and evaluators to reliably perform competency assessments of individuals and organizations can potentially offer significant competitive advantages - but only when the areas these assessments lead us to focus on are the right ones!

Before heading down such paths, you must start by making sure there a well-formed and consistent understanding of the meaning of the term competency. Then, there must be an adequate elaboration of the requirements for evaluating competencies, so that evaluators can perform such analysis accurately, and make appropriate recommendations. Finally, evaluators must consistently perform a set of key practices which are essential to assuring that their results can be trusted. Each of these topics will be explored in more detail in the series of articles below.