I am often asked “what’s the difference between skills and competencies?” I define the term “competency” and break it down into its key parts: knowledge, skills and abilities.
Competencies define the abilities, skills, and knowledge that are needed by employees to be successful. The term “Competency” is broad as it encompasses all three elements.
Let’s first understand the different types of competencies. There are two main types, commonly referred to as: “soft” competencies or “behavioral”; and “hard” competencies or “technical.”
Behavioral competencies include cognitive and personality characteristics while technical competencies include learned expertise such as Project Management.
Behavioral competencies involve the “abilities” element of the definition, such as analytical thinking, interpersonal ability, and initiative. Abilities rely on natural or inherent behaviors as opposed to learned. Although abilities can be honed to some extent, the majority of what constitutes ability cannot be learned.
Technical competencies involve the knowledge and skills elements which are learned through study and practice. Skills are the application of knowledge in work or leisure, in a trade or profession. For example, keyboarding skills involve applying knowledge of the symbols and functions of a keyboard.
The combination of the three elements – abilities, knowledge and skills are critical to effective performance in any job. While almost every job entails some knowledge requirements, having knowledge of how to do something does not necessarily mean you are capable of carrying out the task. Take hairdressing for an example; keeping a steady hand while cutting hair is ability, the techniques you learned in a hairdressing course are knowledge, and cutting hair in an attractive way is skill.
To succeed, employees need to demonstrate the right mix of knowledge, skill and ability. A Negotiator can’t be effective without a combination of:
- knowledge of the topic, the opposing party and negotiation techniques.
- skill in using this knowledge to formulate a compelling argument.
- ability to listen and communicate persuasively.
Altogether, these elements form competencies and the right combination of competencies is used to define a Job Profile, or what it takes to be successful in a particular job.
Specific Skills and Knowledge – where do they fit? Many organizations need to identify the specific and discrete skills and knowledge associated with jobs. This is normally needed for highly technical jobs such as those in Information Technology or Engineering. Take for example a Programmer; we define the competency “programming” in a generic way that can be applied regardless of the technical environment, we do not list the specific software languages or platforms involved. This is because the specific technology will change depending on the product or job involved. We address the need for very specific knowledge and skills by including a separate list or inventory to complement the competencies. This inventory, in combination with the competencies, provides more complete information needed by the company to recruit the candidates with the best fit, to identify training needs, and to plan for transition.
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Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
Headlines of the week
Midstream & Downstream
Global liquid fuels
Electricity, coal, renewables, and emissions
2018 was a year that started with crude prices at US$62/b and ended at US$46/b. In between those two points, prices had gently risen up to peak of US$80/b as the oil world worried about the impact of new American sanctions on Iran in September before crashing down in the last two months on a rising tide of American production. What did that mean for the financial health of the industry over the last quarter and last year?
Nothing negative, it appears. With the last of the financial results from supermajors released, the world’s largest oil firms reported strong profits for Q418 and blockbuster profits for the full year 2018. Despite the blip in prices, the efforts of the supermajors – along with the rest of the industry – to keep costs in check after being burnt by the 2015 crash has paid off.
ExxonMobil, for example, may have missed analyst expectations for 4Q18 revenue at US$71.9 billion, but reported a better-than-expected net profit of US$6 billion. The latter was down 28% y-o-y, but the Q417 figure included a one-off benefit related to then-implemented US tax reform. Full year net profit was even better – up 5.7% to US$20.8 billion as upstream production rose to 4.01 mmboe/d – allowing ExxonMobil to come close to reclaiming its title of the world’s most profitable oil company.
But for now, that title is still held by Shell, which managed to eclipse ExxonMobil with full year net profits of US$21.4 billion. That’s the best annual results for the Anglo-Dutch firm since 2014; product of the deep and painful cost-cutting measures implemented after. Shell’s gamble in purchasing the BG Group for US$53 billion – which sparked a spat of asset sales to pare down debt – has paid off, with contributions from LNG trading named as a strong contributor to financial performance. Shell’s upstream output for 2018 came in at 3.78 mmb/d and the company is also looking to follow in the footsteps of ExxonMobil, Chevron and BP in the Permian, where it admits its footprint is currently ‘a bit small’.
Shell’s fellow British firm BP also reported its highest profits since 2014, doubling its net profits for the full year 2018 on a 65% jump in 4Q18 profits. It completes a long recovery for the firm, which has struggled since the Deepwater Horizon disaster in 2010, allowing it to focus on the future – specifically US shale through the recent US$10.5 billion purchase of BHP’s Permian assets. Chevron, too, is focusing on onshore shale, as surging Permian output drove full year net profit up by 60.8% and 4Q18 net profit up by 19.9%. Chevron is also increasingly focusing on vertical integration again – to capture the full value of surging Texas crude by expanding its refining facilities in Texas, just as ExxonMobil is doing in Beaumont. French major Total’s figures may have been less impressive in percentage terms – but that it is coming from a higher 2017 base, when it outperformed its bigger supermajor cousins.
So, despite the year ending with crude prices in the doldrums, 2018 seems to be proof of Big Oil’s ability to better weather price downturns after years of discipline. Some of the control is loosening – major upstream investments have either been sanctioned or planned since 2018 – but there is still enough restraint left over to keep the oil industry in the black when trends turn sour.
Supermajor Net Profits for 4Q18 and 2018
- 4Q18 – Net profit US$6 billion (-28%);
- 2018 – Net profit US$20.8 (+5.7%)
- 4Q18 – Net profit US$5.69 billion (+32.3%);
- 2018 – Net profit US$21.4 billion (+36%)
- 4Q18 – Net profit US$3.73 billion (+19.9%);
- 2018 – Net profit US$14.8 billion (+60.8%)
- 4Q18 – Net profit US$3.48 billion (+65%);
- 2018 - Net profit US$12.7 billion (+105%)
- 4Q18 – Net profit US$3.88 billion (+16%);
- 2018 - Net profit US$13.6 billion (+28%)