Issue 15 winter 08

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PDF Downloads This article All articles in issue 015 Create 'My eIQ' Email send via email Contact EIRMA send us a message Diagrams Comparing two views of business strategy – by markets or by competences

An innovation architecture links strategic technology platforms to strategic business fields

An innovation architecture helps identify opportunities and gaps

Innovation architectures used to define innovation roadmaps

A skill cluster matrix shows which combinations of skills are used in the most products

Links Evonik Degussa EIRMA round table on competence mapping Gold Fire InnovatorArcelor Mittal inno group OcéSKF IBM IBM Professional MarketplaceBax & Willems Consulting Venturing Competence map of the research capabilities of the Abruzzo region of Italy

What defines a company? Accountants use categories such as tangible and intangible assets to write down the value of a company’s facilities, equipment, brands and intellectual property. As competition has increased, companies have introduced schemes to manage the knowledge locked up in their people and processes. They’ve redefined staff as ‘human resources’, to emphasise how much of a company’s value rests with its employees. What many companies have yet to do is to define their competencies, the sets of knowledge, skills and resources that distinguish them from competitors.

Competence mapping gets companies to focus on their differentiating value

Competence mapping does this, by asking companies to catalogue their technical capabilities and the skills of their employees. Doing so has two effects. First, companies have to work out which skills and capabilities they most value, in order to decide what to map. Second, mapping those competencies enables companies to think about their availability and distribution, how each is changing, and whether some skills are best accessed through partnerships. In short, competence mapping gets companies to focus on their differentiating value.

Maps for management

Dr Manfred Stickler, senior vice president of innovation management for chemicals at Evonik Degussa, told an EIRMA meeting earlier this year that competence mapping enables companies to profile themselves, compare their capabilities with competitors’, as well as guiding innovation strategy and helping to identify business opportunities.

His key competitors, such as 3M, Sumitomo, Rohm and Haas, have made very public commitments to see core competencies as their key company drivers. These commitments are part of a wider discussion about whether companies are market-led or competence-led: Stickler argues that this defines whether a company adapts to a market, or helps shape it.

“Core competencies provide superior long-lasting benefits for customers and sustainable competitive advantage,” he said. “How do you identify core competencies? It’s a question of the value, the rarity, the suitability and the organisation. If all these factors are good, then they become a core competence.”

Evonik Degussa has created a structured process in which competence mapping becomes part of the development of an overall innovation strategy.

“Strategy is like a flag that people can move behind. If you have no flag, people will move in different directions,” Stickler said.

The company now thinks about its skills using an innovation architecture, expressed as a diagram that shows how a set of competences underpins a hierarchy of technology clusters, functions, products and product systems, which address known market needs and define areas for innovation.

If an organisation can describe itself in the terms defined in the diagram, it can then see how its competences fit with its innovation architecture. Such an analysis can then drive an innovation roadmap.

Evonik Degussa also uses competence mapping to help understand its business. In one analysis, it looks at its most important combinations of skills, by creating a matrix listing the number of products that use each combination of skills. This reveals opportunities for optimisation.

Evonik also uses a software tool called Gold Fire Innovator to do a semantic analysis of its patent portfolio. The tool clusters patents with similar keywords into groups, which are displayed on a 2D map. The analysis can reveal gaps within a patent portfolio, as well as enabling analysis of competitors’ patent portfolios.

Arcelor Mittal, which serves 10% of the world’s steel market, has also used competence mapping to look at its processes, products and customer needs as well as at transverse competencies such as support, management and languages.

“Our analysis has shown up some important factors,” said Daniele Quantin, HR, quality management, Arcelor Mittal. “We can see that rare competences are in things such as acoustics and refractory materials. Medium skills are in things like furnaces and durability and core skills include metallurgy and rolling technology.

“The analysis also allowed us to see the balance between process skills and product and customer support.”

It has enabled Arcelor Mittal to define a business vision in terms of strategic competencies

It has enabled Arcelor Mittal to define a business vision in terms of strategic competencies, such as managing manufacturing, and other competencies, such as in composites, where it may need to find partners to keep up.

“This allows us to position ourselves with our competitors and work out how we want to evolve our competences, and whether we want to increase or decrease particular skills in the organisation,” said Quantin. “It also shows us the sorts of things we can be outsourcing or sharing, for example in the process area.”

The project had other benefits, too.

“Competence mapping is very useful for anticipating recruitment needs. It can also be used to identify links between competencies,” said Quantin. “But it should be an iterative process.”

Tools and techniques

So how do you build a competence map?

“There’s no competence mapping without a database,” said Jean Marc Bournazel, CEO of inno group, a regional and business development consultancy that has used the technique. He says that a competence mapping database should conform to five principles: global accessibility, simplicity, standardisation, automation, and innovation. But the real challenge is defining what sorts of information the database should hold, in other words, its ontology (or classification system).

An ontology is a way to organise knowledge

“An ontology is a way to organise knowledge and the main thing about competence mapping is designing the ontology, creating the initial structure,” said Bournazel. “The second thing about competence mapping is to keep using that ontology.”

The ontology is important because it defines the factors that a company cares about and so, indirectly, the way that processes are developed, products are designed and people behave. For example, if your ontology says that people who have worked abroad are more valuable than those that haven’t, expect a flood of applications for international assignments.

That’s why the process of defining the ontology is so delicate. The ontology expresses so much of the company’s strategy and values that getting it right is vital. It also needs to draw on consistent measures: there’s little point in trying to record someone’s ability to lead teams, for example, if you’re not using a common way of defining those skills that is appropriate in all contexts.

“For any organisation, defining the ontology is two thirds of the work,” said Bournazel. “The value of all the work [of competence mapping] is in the ontology.”

The good news, though, is that the analysis is so profound that its value does not need to be limited to defining the fields of a database.

“You can take the ontology out of the database and put it elsewhere.”

Any database implementation of a competence map should offer multiple views

Bournazel recommends that any database implementation of a competence map should offer multiple views, so it can be queried on the basis of subjects, experts and organisations.

Once an ontology has been expressed in a database, it needs populating with entries by appealing for information from experts within the company, using questionnaires and existing assessment information, or by reworking information in other databases.

Bournazel emphasises that once the competence map has been generated, it’s vital to see it as a management process rather than a static project: otherwise its value is declining from the moment the final database entry is made. He also says that the process of developing a competence map can be a two-faced effort, one looking inwards at the organisation, and another looking outwards to see what competencies customers most value.

Mapping people

Competence mapping can make companies rethink how they innovate, what their priorities ought to be and their relationships with partners and competitors. But it is probably most widely used to document the skills of its workforce.

Océ introduced a competence management system in 2001, using a matrix approach in which people were assessed in terms of their functional skills as well as their impact, their ability to influence, and their maturity.

The competence-mapping project was undertaken with existing and new staff, to give them a good understanding of the company’s competencies and also to help new staff find their feet in new roles. The exercise also helped people understand what they needed to do in order to progress within the organisation.

Christine Lebreton, competence centre manager at the Océ facility in Creteil, France, said other benefits of the process included the fact that people understood what was expected from them and that the company found gaps in its skills, which drove recruitment. It also helped cut the length of appraisals by managing expectations, made it easier to fill new roles, improved communications with the human resources department and helped to define and solidify new roles.

“It’s also useful for critical resource mapping, in which you look at many programs within a company, look at the competences that they need and that are available, and see the fit between the two,” she added.

SKF employs 42,000 people across 120 sites and 24 countries. Its revenues are €5.8bn.

According to Josselyne Spanjers, HR manager, SKF Engineering and Research Center, the company is trying to build a group competence-management expertise by creating a process to identify and develop its competencies by 2010.

This means creating a common process with common roles and competence profiles, and a common system for competence development.

“Everyone wants to be special but you have to combine roles,” said Spanjers. “You can’t have 42,000 competency profiles.”

SKF has defined around 60 job roles, each representing the set of competencies needed to perform the role. Although this makes it clear what each person should do in each role, it hasn’t regularised all the job titles. People can be performing the same role under different titles, because titles tend to depend on local cultures.

“This has led to a clash of ontologies between departments that needs to be resolved, ” said Spanjers.

SKF now has a common system for competency development that is web based and includes individual development plans with targets, career wishes, competency profiles and development actions. This is helping it develop in line with its overall strategy. The trick is to keep the effort going.

“What I need to do now is to define the behaviour that will make it run: collaboration, teamwork, organisational awareness etc,” said Spanjers. “One effort has already been made, to introduce a career tree for technology professionals to overcome stagnation.”

Arcelor Mittal has made a similar effort to map the competencies of its employees, creating an online job market and a ‘Yellow Pages’ global directory of competences.

“Our target is to analyse the present availability of competences in R&D centres, as well as seeing what partners think and want in terms of competences, and then synthesising the results,” said Quantin.

Each researcher at Arcelor Mittal is given a ranking in up to five competencies, starting with learning a subject, and moving up through mastering a subject, having a deep knowledge and professional approach, and then becoming a specialist.

The company also analyses its partners’ competencies, so it can assess how useful they could be as partners in short-term projects as well as whether they will become leaders in each competency.

The Arcelor Mittal competence management project had analysed 381 employees by the end of 2006, enabling the company to create an Excel spreadsheet that could show the mix of skills by country or lab. But it hasn’t been easy – and the ontology appears to have been at the heart of the problem.

“It’s difficult to have a common vocabulary and to move to a common understanding,” said Quantin, highlighting the problems of effective sharing across multiple cultures.

She also reinforced the point others had made about keeping the competence map alive by making it an iterative process, and extending its value by doing cross-analyses between roles and disciplines.

Big Blue’s big Marketplace

IBM’s very strong corporate culture may make it easier for it to develop a common understanding of the terms and measures used in its online competence map, which it calls the IBM Professional Marketplace. But it is certainly a challenge: the company has 380,000 full-time employees spread across 195 countries, and has some form of employment relationship with 600,000 people.

The IBM Professional Marketplace is intended to provide information about IBM staff to help resource contracts and proposals, as well as acting as a way to manage the creation of job roles and hiring. Employees put information about their education and skills on this internal website using a common set of tools and formats. The information is then accessible using search and navigation tools.

The result is that IBM now has an internal marketplace for skills, with ‘buyers’ looking for skills to service their projects, and ‘sellers’ looking to progress their careers.

Hans Hoffman, manager of human resources at IBM Research Zurich, looks after 350 of IBM’s 3500 researchers. He says a number of roles exist to help the Marketplace function smoothly. A staffing manager helps identify suitable candidates for an unfilled job. A deployment manager helps put the chosen candidate into the job. A market manager helps manage the open job requests, and an IT expert maintains the data in the source systems that feed the Marketplace.

There are more subtleties to the process than this, but the outline is as above: project managers bid for personnel resources in a market managed by a group of intermediaries. Individuals present themselves as attractively as possible in order to be offered the most interesting opportunities.

The Marketplace is new to IBM. It remains to be seen whether it will make for a more dynamic company, or whether those who manage the market will become a focus of dissatisfaction as IBM’s stability is challenged. As with any market, there is also the possibility that people will work with the Marketplace in ways its developers had not intended to gain temporary personal advantage. There’s also employee opinion to consider.

“People in research think it is not necessary to have such a system so they have to be persuaded to use it,” said Hoffman.

Other uses

Competence mapping can also be used for competitive analysis

Competence mapping can also be used for competitive analysis.

For example, Bax & Willems Consulting Venturing, a Barcelona-based consultancy, has used it to help an automotive industry client that wanted to use long-fibre carbon-reinforced plastics in cars.

“If they can be used in the floorplan it would halve its weight, but currently they are too expensive,” said Laszlo Bax, managing director. His company’s job, therefore, was to find a partner for the automotive client that could help develop a lower cost way of using these fibres.

The first step was to create a profile of what the client wanted to know, starting with constraints such as the maximum distance between client and partner, the preferred size of partner, and its track record.

The first phase of the search involved looking at 500 written sources. The second phase involved choosing the key players and interviewing them by phone. In the third phase the company did face-to-face meetings with a refined list of potential partners, usually with the client present.

The output was a competence map in a database, plus an interpretation, expressed in management terms, of which company Bax & Willems thought the client should work with.

“The consultant’s value is in combining technologies from many sources and presenting them for board-level people,” said Bax. “The consultant should also offer technological options of what the client might do with the recommended partners, as well as scenarios to work on, such as the cost learning curve for carbon fibre or the energy impact on production.”

It is important to ensure that the competence map is treated as a live, rather than static, document

Bax also emphasised the importance of ensuring the competence map is treated as a live, rather than static, document: “You should try to make it more like a wiki, by allowing competence holders to enter and update their own profiles.”

Bournazel takes a similar line to Bax about competence mapping, arguing that the most vital stage of creating a successful map is to make it widely available. Inno did a competence map of the research capabilities in the Abbruzzo region of Italy and found that the area was home to more than 1000 researchers, 23 research centres and three universities, representing a broad range of competencies. The most important part of the mapping work was expressing that information in a database that could be viewed by theme, person organisation through a public website.

Conclusions

Bax added a warning about competence maps: if you spend too much time worrying about finding out what your organisation and the people within it can do, it’s easy to forget that what companies usually need, above all else, is find a way to get something done.

“You need to consider accessing the ability to get something done rather than insisting on hiring a person,” he said. “This is an open-innovation mindset change.”

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