We noted that our competency assessment activities did not predict actual performance and, in questioning why, we discovered a world very similar to our experience in clinical testing. We found that, with careful attention to measurement design, we could detect incompetent performance and find improvement opportunities. This article explores several of the design principles on which one can build competency measurements. It also discusses the reasons why organizations should invest in this activity, which go beyond the most obvious reason--it is the right thing to do.