Problem: Need to improve business results, and have already identified that your people do not have the necessary skills.

Solution: Find appropriate course and send people on the appropriate course.

Will just sending your people on a course be enough to improve your business results? 

Well, you can send them but it’s unlikely improving competency will improve profits. Only improving capability will increase your profits. The best explanation of the difference between a competency and a capability is in the book Change Power by Professor Turner and Dr Crawford.

The book includes an example on visual merchandising—how you layout products in shops so people buy more.  They contrast the high personal skills of a manager Janet with the approach of another manager, Robert. Simply, when Janet left, the organisation lost all her skills and knowledge.

Before we understand what Robert did differently, let’s explore what happens after someone attends a course. For example, let’s consider sending someone on a course on Strategic Account Management (SAM). They return understanding the concepts and understanding what they need to do. In short, they need to treat some customers differently. Or more correctly, their organisation needs to treat some customers differently.

So, after the course the attendees try to do things differently. But, they soon realise that to implement SAM other people in the organisation need to change too. But nobody told the other people!

With SAM, these departments might have to start treating some customers differently: supply chain, procurement, accounts, service and customer service. Typically, people from these departments did not attend the course. So, how can we expect them to change? 

Clearly, giving individuals new competencies is not sufficient to give you sustainable profits. Let’s go back and see what Robert did differently when he wanted more sustainable profits. When Robert’s merchandising manager left, he did not lose the knowledge. First, because his organisation had documented the how and why of merchandising. Manuals with examples showing pictures and details of spacing and lighting for different departments (How). Each example also explained the reasons and principles that made this display effective (Why).

As well as documenting the information, Robert had processes to motivate, manage and measure the managers. His organisation held competitions for the best displays. The information and principles were included in training programs for all departmental managers. This combination of activities helped embed visual merchandising as a competitive advantage for his organisation.

So what’s the difference between competency and capability? Competency is something an individual has. Capability is something an organisation has. To put it mathematically:

Capability = Competency + Processes

If you want to turn a competency into a capability, then in your organisation you must create or amend business processes to use the competency. For example, to build a SAM capability you need to start by adding at least one new process—a 90-day account review. Every 90 days, the account managers and other departments meet to see what’s changed with the account and what the priorities are for the next quarter and the next 12 months.

Implementing is how you create capabilities. And capabilities will deliver sustainable profit. So, to improve profits don’t just send people on a course. Ask how will we build these new competencies into the processes of our organisation?