A Competency Trap

Topics: Strategic management, Learning, Skill Pages: 7 (2550 words) Published: February 4, 2009
A competency trap is the false belief that the same practice that led to a past success, it will necessary lead to a future one. Even though this term was introduced in management literature, "competency trap" is wide in scope and can be applied in different fields such as business, military and in the personal.

Competency traps derive from excessive specialization, "Competency traps represent a tendency to maintain existing and familiar technologies and routines (Levinthal and March 1993)."; and this focus on standardized rules do not motivate employees to experiment new things, "once a successful practice is codified, employees have no incentive to experiment further with actions that could lead to even higher performance (Lee and Van den Steen 2007)"In addition, competency traps are associated with core competences when they become core rigidities. This happens as a result of an overcommitment to a particular core competence. For example, in the 1980s and early 1990s, GM reinforced the mistaken belief that cars are status symbols and that styling is more important than quality. Consequently, its market share has been eroded from its Japanese competitors.

Competency trap is also called "myopia of learning", because "by simplifying experience and specializing adaptive responses, learning improves organizational performance, on average. However, the same mechanisms of learning that lead to the improvements also lead to limits to those improvements (Levinthal and March 1993)."In the military field, competency traps are dangerous as well, "An overly detailed, list-based approach could result in professional military education that is contrary to that which is actually needed." Beyond rules and specifications, personal judgment is always necessary in the field, "…we want leaders to be decisive, yet also contemplative. Such ambiguities and paradoxes are rarely captured in trait lists (Red and Bullis 20004)."In the personal field, competency trap may inhibit the success of top performers. This is because star performers get into a circle of confidence and they believe that "their insights are unique and rarely vulnerable (Jacobs 2005)." Consequently, the person can become arrogant in the process and fall into mediocrity.

On the other hand, competency traps give advantage to late entrants, "Being second gives the company a chance to modify and adjust the product or service offering according to market demands. A late mover can benefit from the market education the first mover has already carried out and learn from their mistakes. Financial risk and chance of failure can be reduced by the "wait and see strategy (Zamantılı 2005)."In summary, in order to avoid "the competency trap", it is important to understand that a "great strength can become a greatest weakness when circumstances change." Therefore it is important to take into consideration a continuous improvement approach in order to prevent any of these traps.

"Competency trap" is not only business term, but also applies to others fields. The following paragraphs summarize fifteen papers on which associate this term with several connotations:1) In the study, "Managing Know how", explains how codifying best practices may lead to a strong competency trap. This is because setting on stone guidelines discourages employees to experiment and come up with new practices that may result in higher performance. Therefore, according to the author, the dilemma between exploiting current best practices and experimenting are solved if the firm is able to control the flow of information. For example, communicating its "best practices" within one plant and letting other plants to experiment. Additionally, the paper also examines how changing environments impact the optimal management of the know-how. Therefore, in slow changing environments the success is given by just following the best practices; conversely, in fast changing environments, past experiences will become obsolete....

References: [1] Deishin Lee and Eric Van den Steen, "Managing Know-How" Harvard Business School (December 2006). Retrieved from: http://www.hbs.edu/research/pdf/07-039.pdf[2] Henrich R. Greve, "Organizational learning from performance feedback: A behavioral Perspective on Innovation and change" Published by Cambridge University Press (July 2003) (Hardcover)[3] George Red, Craig Bullis, Ruth Collins and Christopher Paparone "Mapping the Route of Leadership Education: Caution Ahead" (2004) Retrieved from: http://www.carlisle.army.mil/USAWC/parameters/04autumn/reed.pdf[4] John S. Carrol, Jenny Rudolph, Sachi Hatakenaka, "Learning from experience in high hazard organizations" MIT Sloan School of Management (2000)[5] Susan Yinghong, "Market orientation and successful new product innovation: The role of competency traps" (2006). Retrieved from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1260431[6] Rikard Lindgren, Dick Stenmark and Jan Ljungberg "Rethinking competence systems for knowledge based organizations" (2003) Retrieved from JSTOR[7] Daniel A. Levinthal and James G. March, "The Myopia of Learning" Strategic Management Journal Vol. 14 (1993) Retrieved from: JSTOR[8] Katsuhiko Shimizu and Michael A. Hitt, "Strategic flexibility: Organizational preparedness to reverse ineffective strategic decisions" (2004). Retrieved from: http://faculty.business.utsa.edu/kshimizu/Publication/Preparedness%20(AME%202004).pdf[9] Rebeca Henderson, "The Innovator 's Dilemma as a Problem of Organizational Competence" (2006) Retrieved from JSTOR[10] Richard Rumelt, "Inertia and Transformation" Kluwer Academic Publishers (1995) Retrieved from:http://www.anderson.ucla.edu/faculty/dick.rumelt/Docs/Papers/berkeley_precis.pdf[11] Chen-Yi Tsai, Lin, Julia L., Chen, Ching-Hsiang, "Core competence and core rigidity: Organizational memory perspective" (2005) Retrieved from JSTOR[12] Dianne Jacobs, "Paradox of success" Goldman Sachs (2005) Retrieved from http://www.gsjbw.com/Documents/About/DiversityEquality/ParadoxOfSuccess_Aug05.pdf[13] Dilek Zamantılı Nayır, "Advantage of followers in emerging markets" (2003) Retrieved from JSTOR[14] Spencer Johnson and Kenneth Blanchard, "Who moved my cheese" (1998) (Hardcover)[15] Fredrick Tell, "Strategy, capabilities and corporate coherence: Exploring some dynamics of learning" London School of Economics (2002) Retrieved from JSTOR
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