Competency Matrix & Portfolio Scoring

Executive summary#

• Competency matrix operationalizes the three-axis model at portfolio scale — tracking 50-500 people across 5-20 capabilities
• Four interconnected views: Capabilities (requirements), People (assessments), Gaps (supply vs. demand), Decisions (staffing actions)
• Key metrics: Delivery-ready score per capability, utilization by competency level, gap FTE by horizon
• Most firms track headcount only; competency matrix tracks capability readiness, which predicts delivery success better
• Use this framework for quarterly planning, weekly staffing decisions, and hiring prioritization

Definitions#

Competency Matrix: Portfolio-scale tracking system combining capability requirements, individual competency assessments, and availability to calculate organization-wide readiness.

Delivery-Ready Score: Composite metric combining competency score (Technical × Business × Agency), complexity fit, and availability to predict whether someone can successfully staff a project.

Gap Analysis: Comparison of supply (current competency inventory) vs. demand (project requirements) to identify hiring, upskilling, or partnering needs.

What this includes: Structured data model, scoring formulas, decision rules for staffing and investment.

What this does NOT include: Performance management, compensation decisions, or career pathing (those use different systems).

Key distinction: This is a planning and staffing tool, not an HR system of record. It answers: "Do we have the capability to deliver this work?"

Why this matters#

Business impact#

Competency matrix enables:

• Better staffing decisions — match people to projects based on competency, not just availability
• Proactive gap identification — spot capability shortfalls 3-6 months early
• Investment prioritization — know which capabilities to hire for vs. partner
• Risk visibility — flag projects at risk due to competency-complexity mismatches
• Improved skill coverage — track proportion of required competencies adequately staffed across the portfolio

Without competency matrix:

• Reactive staffing — "who's available?" instead of "who's capable?"
• Surprise gaps — discover capability shortfalls mid-project (too late)
• Wasted hiring — hire for wrong capabilities or wrong levels
• Hidden risk — assign work to insufficient competency, discover failures in delivery

ROI of competency tracking#

Organizations using competency matrices report:

• 15-20% improvement in project margins — better competency-complexity matching reduces rework
• 30-40% reduction in emergency hiring — proactive gap identification prevents scrambling
• 20-25% improvement in utilization — optimize allocation of high-competency talent
• 10-15% reduction in client escalations — fewer competency-complexity mismatches

The Framework: Four Views#

canonical_block: data_primitives
version: 1.0.0
concept_id: framework.competency_architecture
updated_date: 2026-02-16

system_name: "Competency Matrix"
description: "Portfolio-scale system tracking capabilities, people, gaps, and staffing decisions"

data_model:
  capabilities:
    description: "Required competency profiles by capability"
    fields:
      - capability_name: "string"
      - required_technical: "0-4"
      - required_business: "0-4"
      - required_agency: "1-5"
      - required_complexity: "0-4"
      - classification: "Core | Strategic | Contextual"

  people_assessments:
    description: "Individual competency evaluations by capability"
    fields:
      - person_id: "string"
      - capability_name: "string"
      - technical_score: "0-4"
      - business_score: "0-4"
      - agency_score: "1-5"
      - complexity_experience: "0-4"
      - availability_fte: "0.0-1.0"

  computed_scores:
    description: "Derived metrics from assessments"
    formulas:
      - name: "agency_norm"
        formula: "(agency_score - 1) / 4"
      - name: "competency_score"
        formula: "(technical * 0.5) + (business * 0.2) + (agency_norm * 0.3)"
      - name: "complexity_fit"
        formula: "MIN(1, complexity_experience / required_complexity)"
      - name: "agency_gate"
        formula: "IF(agency_score >= required_agency, 1, 0)"
      - name: "delivery_ready_score"
        formula: "competency_score * complexity_fit * agency_gate * availability_fte"

  capability_summary:
    description: "Aggregate readiness by capability"
    calculations:
      - name: "total_ready_fte"
        formula: "SUM(delivery_ready_score WHERE capability = X)"
      - name: "average_competency"
        formula: "AVERAGE(competency_score WHERE capability = X)"
      - name: "utilization"
        formula: "(allocated_fte / total_ready_fte) * 100"

How it works#

View 1: Capabilities (Requirements)#

Define required competency profiles for each capability.

Example: Cloud Architecture

Example: Project Management

View 2: People (Assessments)#

Assess each person's competency per capability.

Example: Sarah (Cloud Engineer)

Calculations:

• Cloud Architecture Competency Score: (2 × 0.5) + (1 × 0.2) + (0.5 × 0.3) = 1.35
• Complexity Fit (Cloud): MIN(1, 2/3) = 0.67
• Agency Gate (Cloud): IF(3 >= 4, 1, 0) = 0 ❌ (Fails agency requirement)
• Delivery-Ready Score (Cloud): 1.35 × 0.67 × 0 × 1.0 = 0 ❌

Interpretation: Sarah has decent technical skills (2) but insufficient agency (3 vs. required 4) for Cloud Architecture roles. She's better suited for DevOps work (scores 2.03).

View 3: Capability Summary (Portfolio View)#

Aggregate readiness by capability.

Example Portfolio

Insights:

• Cloud Architecture: 18.5 ready FTE, 95% utilized → only 0.9 FTE bench → under-capacity, hire urgently
• Project Management: 8.4 ready FTE, 85% utilized → 1.3 FTE bench, but PM is contextual → over-invested, reduce internal team
• Data Engineering: 12.2 ready FTE, 88% utilized → 1.5 FTE bench → healthy capacity

View 4: Gap Analysis#

Compare demand forecast vs. supply.

Example: Q2 2026 Demand

Actions:

1. Cloud: Immediate gap → engage partners, activate stash
2. Data: Short-term gap → partner for Q2, consider hiring if demand stays high in Q3
3. Security: Chronic gap → hire 1 FTE, establish partner relationship
4. PM: Surplus → phase out 2 internal PMs over 12 months

Example: CaseCo Mid#

{
  "canonical_block": "case_scenario",
  "version": "1.0.0",
  "case_ref": "caseco.mid.v1",
  "updated_date": "2026-02-16",

  "scenario_title": "Quarterly Competency Matrix Review at CaseCo Mid",
  "scenario_description": "CaseCo Mid (500 people) conducts quarterly competency matrix review to identify gaps and prioritize hiring.",

  "current_state": {
    "total_billable_headcount": 350,
    "capabilities_tracked": 8,
    "people_assessed": 350,
    "quarter": "Q1 2026"
  },

  "capability_summary": [
    {
      "capability": "Cloud Architecture",
      "classification": "Core",
      "required_profile": "T3-4, B2-3, A4-5, Complexity 3",
      "current_supply": {
        "total_headcount": 25,
        "ready_fte": 18.5,
        "avg_competency_score": 2.65,
        "utilization": 95
      },
      "q2_demand_forecast": 22,
      "gap": -3.5,
      "recommendation": "URGENT: Hire 2 senior architects (chronic demand). Partner for 2 additional (immediate need).",
      "investment": "$400K/year (2 FTEs) + $180K (2 partners × 4 months)"
    },
    {
      "capability": "Data Engineering",
      "classification": "Core",
      "required_profile": "T3, B2, A4, Complexity 3",
      "current_supply": {
        "total_headcount": 18,
        "ready_fte": 12.2,
        "avg_competency_score": 2.40,
        "utilization": 88
      },
      "q2_demand_forecast": 14,
      "gap": -1.8,
      "recommendation": "Partner for Q2 (2 FTEs). If Q3 demand stays high, convert to hiring.",
      "investment": "$88K (2 partners × 2 months, then reassess)"
    },
    {
      "capability": "Project Management",
      "classification": "Contextual",
      "required_profile": "T1, B2-3, A3, Complexity 2",
      "current_supply": {
        "total_headcount": 12,
        "ready_fte": 8.4,
        "avg_competency_score": 1.85,
        "utilization": 85
      },
      "q2_demand_forecast": 6,
      "gap": 2.4,
      "recommendation": "Over-invested. Phase out 2 internal PMs via attrition. Establish PM partner bench.",
      "investment": "-$200K/year (reduce 2 FTEs over 12 months)"
    }
  ],

  "portfolio_actions": [
    {
      "action": "Hire 2 senior cloud architects",
      "priority": "P0 (critical)",
      "timeline": "Post immediately, hire by end of Q2",
      "investment": "$400K/year"
    },
    {
      "action": "Engage cloud partners (2 FTEs)",
      "priority": "P0 (critical)",
      "timeline": "Immediate (within 2 weeks)",
      "investment": "$180K (4 months)"
    },
    {
      "action": "Partner for data engineering (2 FTEs)",
      "priority": "P1 (important)",
      "timeline": "By mid-Q2",
      "investment": "$88K"
    },
    {
      "action": "Phase out 2 PM FTEs",
      "priority": "P2 (optimization)",
      "timeline": "12 months via attrition",
      "investment": "-$200K/year savings"
    }
  ],

  "portfolio_outcomes": {
    "net_investment": "$468K (hire + partner - PM reduction)",
    "capability_alignment": "Shifted $200K from contextual (PM) to core (Cloud)",
    "gap_resolution": "Cloud gap closed in Q2, Data gap monitored for Q3 decision"
  }
}

Action: Competency Matrix Implementation#

Implementation Checklist#

Phase 1: Setup (Month 1)

• Define 5-10 key capabilities
• Set required competency profiles per capability (T/B/A/Complexity)
• Classify capabilities (Core / Strategic / Contextual)
• Build spreadsheet or database schema

Phase 2: Assessment (Month 2-3)

• Assess 50-100% of billable team (start with revenue-critical roles)
• Calculate delivery-ready scores
• Identify assessment gaps (people not yet assessed)

Phase 3: Analysis (Month 3)

• Generate capability summary (ready FTE, utilization, avg competency)
• Forecast demand for next 2 quarters
• Run gap analysis
• Prioritize actions (hire / partner / upskill)

Phase 4: Operationalize (Month 4+)

• Quarterly portfolio reviews
• Monthly utilization tracking
• Weekly staffing decisions use delivery-ready scores
• Continuous assessment updates (new hires, promotions, skill development)

Spreadsheet Template (Google Sheets / Excel)#

Sheet 1: Capabilities

Sheet 2: People_Assessments

Sheet 3: Computed_Scores (calculated columns)

Sheet 4: Capability_Summary

Pitfalls#

Pitfall 1: Assessment theater (collect scores, never use them)#

Early warning: Competency matrix exists, shows green/yellow/red, but staffing decisions ignore it ("Bob is available, put him on the project").

Why this happens: Matrix seen as compliance exercise, not decision tool.

Cost: Wasted effort building matrix, staffing decisions still bad, competency-complexity mismatches persist.

Fix: Make delivery-ready score mandatory input to staffing decisions. Require justification when assigning someone with score < 1.5 to a project.

Pitfall 2: Stale assessments#

Early warning: Assessments are 18+ months old. People have grown (or left) but matrix doesn't reflect reality.

Why this happens: Initial assessment effort was high, no process for ongoing updates.

Cost: Matrix loses credibility ("this is wrong"), people stop using it.

Fix: Update assessments:

• Quarterly for high-turnover capabilities
• Annually minimum for all capabilities
• Immediately after major projects (skill growth) or role changes

Pitfall 3: Over-indexing on single axis#

Early warning: Staffing decisions based only on Technical score, ignoring Business and Agency.

Why this happens: Technical is easier to assess and feels more "objective."

Cost: Projects staffed with technically strong, low-agency people → delivery bottlenecks, client frustration.

Fix: Delivery-ready score must incorporate all three axes. Flag anyone with Agency < required, regardless of technical strength.

Pitfall 4: No gap-to-action connection#

Early warning: Gap analysis shows -5 FTE shortage in Cloud. Months pass, no hiring, gap persists.

Why this happens: Analysis doesn't trigger decisions. No owner for gap resolution.

Cost: Identified gaps don't get fixed, revenue opportunities lost, delivery risk remains.

Fix: Every gap must have an action owner and timeline. Review actions monthly: "Gap identified in Jan, what's the hiring/partnering status?"

Next#

• Competency Model — Understand the three-axis scoring framework
• Complexity & Experience — Match complexity to competency
• Core vs Contextual — Classify capabilities before investment
• Staffing Gate — Use delivery-ready scores in weekly staffing decisions

FAQs#

Q: How often should I update the competency matrix?

A: Quarterly for portfolio reviews and gap analysis. Monthly for utilization and allocation updates. Continuously for new hires and departures.

Q: Should I track non-billable people (sales, ops)?

A: Track them if they have delivery-adjacent capabilities (e.g., pre-sales architects, technical account managers). Skip purely administrative roles unless you need workforce planning visibility.

Q: What if someone has no assessment for a capability?

A: Assume delivery-ready score = 0 for unassessed capabilities. Don't staff them on projects requiring that capability until assessed. Exception: if you can shadow/pair them with assessed person.

Q: Can I use this for performance reviews?

A: No. Competency matrix is for staffing and planning, not performance management. Someone can be assessed as "Technical 2" (appropriate for their level) and still be a high performer. Mixing staffing and performance creates incentive to inflate scores.

Q: What's a "good" delivery-ready score?

A: 1.5-2.0 is solid for most mid-level roles. 2.0-2.5 is strong senior level. 2.5+ is excellent (principal/architect level). Scores < 1.5 indicate competency-complexity mismatch (risky to staff).