Imagine a scenario in which you’re interviewing a candidate for a business development team lead role. On paper, this candidate looks great. They an expert at closing deals, and as a result, they’ve brought in tons of revenue over the years for their current employer. On top of that, they’ve got an insatiable drive to accomplish more, to increase their stats from the previous year, and on and on. But you also notice that what they have in terms of a stellar background, they also lack in big-picture thinking. You can tell from a single conversation that they just don’t have the capacity to zoom out and gain perspective, something you know is essential for a team lead role. What you’re noticing is the difference between skills and competencies, and discounting this difference could seriously backfire in the long run.

We hear talk of skills and competencies constantly in the leadership development and sales training worlds. Surprisingly, however, these terms get thrown around as if they were completely interchangeable. While at a first glance this might not seem like cause for much concern, the reality is that conflating these terms lays the foundation for poor hiring and promotions, especially when it comes to filling key leadership roles.

Let’s break down the key differences between skills and competencies:

Key Differences

The difference between skills and competencies might be compared to someone looking at an object through a microscope versus a magnifying glass.

In a sales context, skills really refer to the tasks you complete or the processes you follow to achieve your desired outcome. This is comparable to skills on a football field: catching, throwing, punting, running or blocking. Or in sales, it’s building compelling value, prospecting, presentation, closing and timely follow up, among other things. We’re really thinking on the micro-level at this point.

Functional leaders often give greater attention to this area because their primary goal is to enable employees to accomplish a set of tasks, for example, increasing sales. If someone on your team struggles with finding qualified leads, the sales process stops in its tracks. The functional leader will want to ensure this process works like a well oiled machine. The downside here is that they also run the risk of neglecting the other side of the coin: competencies.

Unlike skills, competencies require us to take a few steps back. These are whole person-oriented attributes. Think of things like personal accountability, being an objective listener or the ability to engage in conceptual thinking. When we’re identifying competencies, we’re painting with much broader strokes; they’re the internal qualities employees bring to the table that drive their success with various skill areas.

Learning and development (L&D) leaders tend to focus more heavily on competencies, and there’s a good reason for that. Empowering effective employees and leaders remains foremost on their minds, and effective leaders simply cannot become overly involved in the details of an employee’s daily processes. Thinking primarily on a strategic level enables them to make prudent decisions and pivot when necessary. Meanwhile, becoming too bogged down by details can impair this important work.

Being skilled is a wonderful thing, but combining skills with a lack of key competencies will leave you with abysmal results. Take self-awareness, for instance. This competency, which suggests a regular state of mindfulness about how one contributes to the team’s success or failure, is essential for the effective application of skills. It’s much like a skilled driver. When they’re calm and self-aware, they drive safely. They monitor their speed, check their mirrors and are cautious when the light turns yellow. But this same driver, in a state of emergency loses that all-important self-awareness. They speed without a second thought, weave in and out of traffic and blast through intersections as the light turns red. In short, they override their driving skills because of their mental state. The point is that while skills are important, so are competencies. It’s when these two come together that the magic really happens. That’s when we start to see positive momentum forward.

What Now?

The question that remains is this: How can we better develop employees’ skills and competencies? Here’s where to start:

1. Identify the competencies you need for success in your organization. Every company is different, so you need to dig deep and look at your organization’s core values. For some, they might value teamwork. For others, it might be competitiveness or perhaps strong negotiation. Whatever values you identify, remember that this organizational introspection goes well beyond the functional level, so really think it through.
2. Identify the key skills you need for each role. Begin by considering what outcomes each role should achieve. Then work your way backwards to uncover each step in the process. For example, key skills for selling might include prospecting, questioning or presenting.
3. Assess where people are. To effectively chart your path, you’ve got to discover your starting point, or rather, your baseline. Then you should use those assessments as part of your hiring criteria. This essentially enables you to begin hiring into the office culture the kinds of people that actually fit, which is a major boon for retention and ultimately your bottom line.
4. Begin individualized and group training/coaching to improve those deficient areas. Since there are a host of learning styles and needs, you must diversify your modes of delivery. Some things can and should be handled on a one-on-one basis, especially things like the refinement of job-specific skills. But some contexts, topics and audiences will require group engagement. If you’re not up to the challenge, outsourcing this work could be beneficial.

Coming back to that opening example. You’ve got a highly skilled candidate for your business development team lead position sitting in front of you, but they lack the necessary ability to wrap their minds around the bigger picture. Do you hire them? If you continue confusing skills for competencies, you might. You also might regret that choice. The most important considerations are these: Are they teachable, and can you coach? Their success may ultimately come down to your competencies.