Viewpoint

Competence at the heart of a safe organization
Achieving consistently strong safety performance through a competent and capable workforce

Effective competence management is a fundamental component of any safe organization. Good competence management
systems provide senior managers and executives with assurance that the workforce has sufficient skills, knowledge,and experience to undertake their roles and associated tasks safely. Weaknesses in these systems can mean that theorganization is vulnerable to incidents and accidents that the workforce could and should have prevented. Capable staff atall levels in the organization design and implement risk controls that deliver safe outputs. This Viewpoint poses key strategic
questions that business leaders should ask in order to determine if their competence management arrangements are robustand effective.

Competence management is a strategic risk
Competence can be described as the combination of skills,
knowledge, and experience an individual has that enables
them to perform a task or role safely and efficiently. How anorganization chooses to manage competence is a key strategic
decision with material consequences, yet it is common fororganizations to treat it as little more than an administrative task.
There exists a paucity of competence management strategies
across the high-hazard industries, with an associated stagnation
in innovation. A strategic approach is essential in providing a
coherent framework to support competence management in a
way that is optimal for the specific organization and responds tostakeholder needs. A competence management system (CMS)
is the collection of operational arrangements within a company
that are available to collectively manage competence and deliver
the competence strategy.

Consequences of poor competence management
Failure to effectively manage competence increases the risk ofincidents and accidents. A tragic example is the Grenfell disasterin which 72 people lost their lives when the London tower blockcaught fire in 2017. A review by the UK Ministry of Housing,Communities & Local Government, overseen by Dame Judith
Hackitt, identified a number of serious failings in competence
management that contributed to the disastrous compromise infire safety.
Alongside the potential human cost, such events are also
likely to incur financial costs from uninsured losses, diversionof resources, and increased supervision, among others. Anorganization may also be at risk of legal action, with a potential
to lose critical licenses and accreditations.
The benefits of a robust CMS extend beyond good safety
performance. A competent workforce is more likely to deliverwork that meets expectations of quality and schedule, forinstance, and thus protect reputation. More broadly, knowledgeof an organization’s competence profile can assist in recruiting
and retaining talented employees. An effective and strategic
approach links and aligns the CMS to business objectives.

“[A] whole host of circumstances may have contributed to the rapid fire spread and … failings in therelevant competences across all those working on higher risk residential buildings is likely to have beena key part of that mix.”
Industry response to the Grenfell disaster in June 2017

Viewpoint

Key questions in developing your approach
Executives and senior managers must have an appreciationof competence management as a strategic issue in order todevelop an understanding of how to deliver improvements. The
following five questions are designed to help an organizationassess its competence management arrangements anddetermine how appropriate they are for the business.

1. Does your approach to competence managementalign with stakeholder expectations and corporate
objectives?
The Human Resource Executive regularly finds “aligning people
strategies to business objectives” to be a key challenge in its
annual “What’s Keeping HR Up at Night?” survey. However, it
is a task that must not be neglected. This is the opportunity totranslate corporate objectives and stakeholder expectations intoactions and behaviors.

An increasingly recognized component of competence are
non-technical skills (NTS). These are the more generic skills
that enhance the way in which an individual performs a role.
Examples of NTS include decision making, problem solving,and knowing the limits of one’s competence.
Alongside core functional skills such as literacy, numeracy, andcomputer literacy, NTS combine with technical skills to moreaccurately reflect a role’s necessary competence requirements(see figure below). The concept of “capability” encompasses
this idea of traditional competence plus these additional skills.
The core components of competenceTechnical skills

Every organization exists in a unique operational environment
with its own risk profile. A generic CMS is likely to consume
a significant amount of effort without delivering the desired
outcomes. The competence management strategy is
the conduit to tailoring your CMS to your business, yourstakeholders’ needs, and your risk appetite.
Understanding stakeholder expectations is a key part of thisprocess. Who are your stakeholders? It may be useful to use
a method, such as a stakeholder needs analysis, to identify
expectations and review them periodically, as they are unlikely
to remain static. Sometimes, expectations are obvious andeasily tracked. For example, the UK railway industry’s Risk
Management Maturity Model (RM3) clearly sets out theexpectations of the industry’s economic and safety regulator.
However, the needs of your line managers, for instance, arelikely to be less explicit and more fluid.

2. Do your competence frameworks provide sufficient
coverage for the roles that your workforce undertakes,
and do they link to your competence management
strategy?
Many competence frameworks are designed based on risk
assessment of tasks. While sound in principle, there is a riskthat competence management regresses into a badge-collecting
exercise, with individuals attending disparate training courses
for competence “tickets” on a task-by-task basis. This kind of
approach overlooks the inherent nature of most work – tasks are
rarely carried out in isolation, but instead are usually undertaken
as part of a wider role. It is often more appropriate to take aholistic approach to defining competence profiles and training
requirements, taking into account the whole job role rather thanbreaking it down into distinct tasks.

2Competence at the heart of a safe organization

Non-technical skills

Functional skills

Source: Arthur D. Little analysis

In some organizations, such as in the military, the conceptof SQEP (suitably qualified and experienced personnel) isused to draw together role-based competences and NTS.
SQEP requires both professional qualification and significant
experience. Training is provided for the role, meaning NTS canbe easily incorporated, but competence does not end here.
SQEP recognizes the importance of practicing skills and only
awards full SQEP status when an individual has accumulated
the necessary experience.
Your CMS should:nOffer competences that are proportionate to the role.

nTrain staff for roles rather than tasks.

n

Cover non-technical and functional skills.

nManage capability.

nRecognize the importance of experience and practicing
skills.

Competence management is also useful when considering
succession and resilience planning. It is important to provide
coverage for current competence requirements as well as
those required in the future. There are benefits of competence
management to succession and resilience planning, including:ViewpointnPreparing individuals for the next stage in their career.

nPreparing for changes in the operational environment (e.g.,digitalization, increased working from home).

nEnsuring sufficient capability exists to mitigate extraordinary
circumstances, such as during COVID-19 or extreme
weather events.

Developing competences, particularly to a SQEP level, takes
time, so organizations must plan accordingly. These efforts
should also be reflected in their competence management
strategies.

3. Is your workforce capable of operating in degraded,
emergency, or irregular situations?
The ability to perform a role to a recognized standard undernormal working conditions is sufficient to ensure safe working inmost circumstances. But what if conditions change (see figurebelow)? How can you prepare your workforce for extraordinary
circumstances?
Competence development must span different types of situations

Classroomdemonstration
Can demonstrate thenecessary knowledge
and skills in classroom
or training setting

Everyday working

Can apply the knowledge
and skills under normal
working conditions,
gaining experience

Degraded conditions

Can apply knowledge,
skills, and experience inirregular or emergency
situations

Source: Arthur D. Little analysis

An important distinction between everyday working andworking in degraded conditions is the lack of opportunity topractice. In most roles, individuals regularly practice skills,
gaining experience and improving proficiency. This is not thecase for irregular working conditions, which may occur a coupleof times a year or perhaps only once in a career. Examples ofsuch situations include train operators who encounter fog, pilots
who must crash-land a plane, or police who are confronted
with terrorist incidents. While rare, it can be vital that these
individuals are competent in these circumstances.
It is possible to provide opportunity for practice by replicating
degraded conditions through the use of simulators and drills.
This type of practice is commonplace in some high-hazard
industries. Pilots, for example, are required to spend hours inflight simulators training for every imaginable situation, including
landing in fog, engine failures, and bird strikes.
While simulators may not be appropriate for the nature or thebudget of your organization, drills can be implemented across arange of situations for little more than the cost of the associated“downtime.” You can simulate irregular operating conditions oremergency situations through the likes of role play or “tabletop exercises.” Drills can be particularly useful in training teamleaders whose decision-making and people management skills
are likely to come under pressure in these circumstances.
Important strategic decisions are involved in determining
how realistic you want your simulation environments to be
and at what frequency they are used. A like-for-like scenario,
for example, is likely to be costly and has the potential forundue emotional stress on employees. Conversely, if yoursimulations are too unrealistic, you are unlikely to achieve thedesired outcome of practice under extraordinary circumstances.
You must also decide how often to perform simulations anddrills. These decisions will be linked to a risk assessmentof the potential situation (and thus expected frequency andconsequences) as well as your organization’s risk appetite.

4. Does your CMS provide assurance that membersof the workforce have sufficient skills, knowledge,
and experience to safely undertake their roles and theassociated tasks?
Your organization may have a CMS in place, but can you say withconfidence that your workforce is competent to undertake theroles that they perform? And can you justify this with evidence?
An outcome of the competence management process shouldinclude this kind of assurance.
Assessment of competence is an important contributor to theassurance process. As such, your process should ensure:nIndependence in assessment. Often, an individual’s linemanager is charged with performing the assessment,
which creates an inherent conflict of interest. A degree ofindependence should be integrated, such as sample checks
from a third party, to monitor the validity of this process.

nCompetence of assessors. Despite playing a vital role inthe competence management process, many individuals
who are responsible for assessing the competence of others
do not themselves hold formal competences as assessors.
The CMS should ensure that assessors are capable ofperforming their role.

nThe ability to fail. Many assessors can be hesitant to failan individual even when the individual’s performance issubstandard. Failure to award competence – or withdrawal
of a competence – has the potential to create additional 2
workload for many people. At the same time, the situation
also provides an opportunity for personalizing development
for an individual, with positive consequences for the wider
team as a result.

Competence at the heart of a safe organization

3

Viewpoint

5. Does your CMS operate efficiently, including
producing KPIs and KRIs?
An integral component of a CMS for medium and largeorganizations is a computer database of competence records
for the workforce. Organizations often underestimate theimportance of procuring appropriate software, with too many
settling for a suboptimal system. However, the opportunity
to find a replacement in the future may be difficult, and sowhat may feel like a small procurement compromise one year
becomes a long-term aggravation for many in subsequent years.
It is crucial to ensure that any software or database is easy to
use and minimizes administrative burden, encouraging properand effective implementation of the CMS from the workforce sothey see it as more than just additional bureaucracy.
A competence management database holds a wealth of datathat is often underutilized. Records of competence within yourorganization can easily be deployed to monitor the performanceof your CMS:nn

Key performance indicators (KPIs) track an organization’sperformance in relation to strategic priorities.
Key risk indicators (KRIs) provide foresight of potential andemerging risk, as well as current risk exposure levels.

Examples of such indicators include the number of expiredcompetences or competences close to expiry, the competence“gap” between the target and the actual competence profile, orthe number of drill exercises performed during a certain period.
Such metrics can enable your organization to identify areas ofconcern or areas to target through both lagging and leading
indicators. In most cases this data already exists, but are youutilizing it to its full potential?

Conclusions
Managing the competence of your workforce should not be
regarded as a bolt-on administrative exercise but instead berecognized as an integral and fundamental part of running a safe
and successful business.
Our research shows that few organizations have a competence
management strategy in place that aligns to stakeholder needs
and corporate objectives, leaving them vulnerable to safetyincidents and unable to capitalize on potential opportunities.
A well-motivated, productive, safe, and high-performing
workforce is clearly linked to sustained business success, anddeveloping an effective CMS is therefore critical.

Contacts
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Middle Eastvirag.bela@adlittle.com

merhaba.adnan@adlittle.com

Belgium

The Netherlands

vanaudenhove.f@adlittle.com

eikelenboom.martijn@adlittle.com

ChinaNorway

harada.yusuke@adlittle.com

thurmann-moe.lars@adlittle.com

Czech Republic

Polandsteif.jiri@adlittle.com

baranowski.piotr@adlittle.com

FranceRussian Federationbamberger.vincent@adlittle.com

ovanesov.alexander@adlittle.com

Germany

Singapore

doemer.fabian@adlittle.com

ito.yuma@adlittle.com

India

Spain

maitra.barnik@adlittle.com

mira.carlos@adlittle.com

Italy

Swedenmilanese.stefano@adlittle.com

kilefors.petter@adlittle.com

Japan

Switzerland

ito.yuma@adlittle.com

doemer.fabian@adlittle.com

Korea

Turkeylee.kevin@adlittle.com

baban.coskun@adlittle.com

Latin AmericaUKguzman.rodolfo@adlittle.com

teixeira.tom@adlittle.com

USAwylie.craig@adlittle.com

Authors
Hannah Marsden and Stephen Watson

Arthur D. Little
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