Building functional competencies can help in making a more competitive organization and gear up for the upsurge
Bertram Construction Company Limited (BCCL), a large EPC company, has in its over 40 years of existence established itself as a leader across Power, Roads, Railways and Refineries construction. BCCL successfully operates in India, Middle East, South East Asia and Latin America.
However in the last 3 years, it had been facing an increased pressure on its top line as the number of infrastructure projects dwindled (due to the economic squeeze). The bottom line was also under attack due to increased input costs. For the first time in a decade and a half the company was faced with the prospect of negative growth.
The Assignment: The Chief People Officer at BCCL, a firm believer of limitlessness of human potential, started exploring solutions to the problem from the people perspective. He discussed the situation with Potentia, a long standing consulting partner of BCCL. Two things were evident to Potentia, first that the materiel procurement formed anywhere between 60-65% of the project costs across domains. Second, the variance between planned procurement costs and actual procurement costs were a factor that lead to increased buffers being inbuilt in bids (this can not only make a bid uncompetitive but a bigger problem is that it can lead to a false sense achievement of targets during project execution).
We saw, out of all the opportunities, the biggest one was in building functional competencies in the purchase/ procurement team at BCCL.
The Journey: At the outset we understood the business strategies. This essentially helped in identifying the present and future needs of the organization. The strategic needs of the organization as a whole and also the procurement function, both the present and the future were necessary for the purpose of drawing up a robust model of competencies, which were future proof.
In participation with a cross section of the procurement function team members, we then identified, a basket of key functional competencies (e.g. Cost Management, Rate Analysis, Delivery Follow Up and Expediting…) along with the knowledge, skills and behaviors associated with each of the identified competency. We also evolved the level wise indicators of the knowledge, skills and behaviors required for each competency. Each competency was classified into four levels of proficiency: Novice, Intermediate, Advanced and Developed **
Each unique position in the function was associated with the required competencies by level and the criticality listed against it. This was the Competency-Position Grid. The levels of criticality being Vital, Important, and Less Important*. This was done based on job roles and studying the success factors for each role through one to one discussions with the team members and key stakeholders.Fig.- Competency-Position Grid
It was imperative to have an understanding of key business processes and deliverables of the function by studying the activities required for the execution of the deliverables along with understanding the organization structure of the function, sub functions.
The whole exercise involved a series of one to one interviews, focus group discussions and facilitated workshops with the key members of the function and other functions including a cross section of project directors. This ensured an internal client view of the function as well.
This was finally followed by one of the most important stages in the exercise, assessment of key functional team members against the competencies required for the position he/ she was holding basis the competency-position grid. While, assessment can use tools and methods ranging from Computer based & other tests to case studies to expert panel interviews to in-tray exercises, we used expert panel interviews as a basis for assessments at BCCL. The expert panel was constituted of functional experts from the industry, a business leader from within BCCL and was facilitated.
The gaps between the required competencies and the assessed competencies formed the basis on which the training and up-skilling needs of the procurement/purchase team members were identified.
The training needs were many, hence prioritization of the training needs was done basis the criticality of the competency as displayed in the competency position grid. Gaps in competencies Vital for the position were given the highest priority followed by the Competencies listed as Important for the position.
Another, interesting twist that Potentia gave to the exercise was that each assessed person was given a business relevant project that either had a financial benefit associated with it or a process benefit leading to robustness in the procurement for the projects.
This twist ensured that the results / payoffs from the exercise were quick and visible. The employee engagement and enthusiasm generated through this exercise is not easily measurable but is a major outcome.
Conclusion: Functional Competency building in organizations can lead to a disciplined and robust jump in organizational capabilities to compete in today’s tough market place, while keeping employees engaged as they continue to add value to themselves. This also provides a basis for career progression and learning which is unbiased and can form one of the building blocks for career progression for employees.
|Novice:||:||Someone who can do the task when there is somebody to help / guide / lead him/her.|
|Intermediate:||:||Someone who can independently perform tasks related to the competency|
|Advanced:||:||Someone who can help/ lead/ guide other people in the tasks related to the competency|
|Developed:||:||Someone who evolves and pushes the boundaries of the competency through path breaking actions / adopting new methods / approaches|
|Vital (V )||:||Competencies which are vital for successfully performing the job/role, absence of which (competencies) directly impacts the results. (These are competencies if there is a gap, needs to be bridged on (top) priority)|
|Important(I)||:||Competencies which are necessary for carrying out the job; but may not directly impact immediate performance. Gaps, if any, should be bridged|
|Less Important(LI)||:||Competencies which may not directly impact the performance of the job, but the knowledge of which could be beneficial – it can be viewed as a Add on Competency. Gaps can be bridged based on the organizational need|
Note - Some details and names have been changed to maintain confidentiality without impacting the actions and the outcomes discussed in the article