Strategic Erosion & The Skills Cliff-Edge
The Skills Cliff-Edge
Whether we call it workforce resilience, capability development, or future-proofed workforce, all paths lead back to the same fundamental challenge; how do we create businesses that can access and utilise the quality of skills needed to execute ever-bolder business strategies? The answer to this is not easy, and to make matters more complicated, most businesses don’t have long to overhaul their skills management capability. Their future strategic viability is therefore approaching a cliff-edge.
Why Is Now The Time For Skills Strategy?
People have been talking about the concept of ‘war for talent’ for the best part of 25 years. Therefore, like many of the aspects of ‘human capital management’, the people challenges we face today are not particularly new. What is new is the realisation that we’ve entered a new technological era of the enterprise digital have’s and have not’s. This is creating a two tier and two speed transformation approach to the way work is designed, the tools that we use and the rate at which we mass-deploy. We've also seen an evolution in leadership, management and mindset, coupled with a realisation that new sources of value have to be created. The blend of human motivation, technology pervasiveness and skill prevelance was always going to be central to the positioning of each enterprise at the start-line of this new era. Furthermore, and with Covid-19 representing the official starting gun, there is a newfound sense of urgency and consequential jostling on the first out lap of this race for digital adoption. Leaders’ ability to mix technology with strategy, with operational control and with workforce production management has been thrust into the spotlight. Therefore, without the basic foundations of a skills-driven organisation and nor the enterprise resources needed to accelerate their creation, many of the runners are not going to be around to see the finish line.
How to Become a Skills-Driven Organisation:
When you think about the basic elements of capability required to become a skills-driven organisation - most companies just haven’t got there yet. Many are still struggling with table-stakes activities such as strategic workforce planning. Not least due to the difficulty in forecasting demand, the awkwardness of getting to really know what your people can do and the embarrassment of inadequate analytic simulation capability.
Yet the ‘nirvana’ of any organisation is to have the ability to control business outcomes and value creation. This can be achieved, far more readily than has historically been achieved through the measurement of other proxies for workforce performance readiness, by understanding how a collective skills profile supports the nature and orchestration of the work that needs to be fulfilled.
Consider for example how HR and leaders have focused on engagement as the key ingredient, and therefore golden measure, in driving more productive, sustainable organisations. But how many organisations have the ability to determine business outcomes based on engagement levels? I would go as far as to suggest - ‘none’. Engagement is not a strong enough proxy for overall business outcome, there are too many other noises in the measurement system. However, we have now developed the analytical capability to solve organisational challenges from a skills lens – with more objective means of measurement and correlative capacity.
So the key steps to be skills-driven are:
• Linking To Broader Strategy: Skills strategy has to link to a business strategy, and business strategy has to be turned into a work strategy, underpinned by an understanding of how that work is fulfilled. The flow of strategy to execution is often poorly constructed, with the key component of skills overlooked. But think about it.... why go and build a strategy if you know you haven't got the skills to fulfil it? So many organisations do that - start off down a road, then realise they haven't got the skills they need and can't find or afford the skills they want.
• Understanding the Nature and Dynamics of Skills: There is a lazy over-reliance on skill libraries and formal taxonomies, as if all we need is a checklist and clipboard to measure skills. Skills are things that live and breathe, they evolve, they move at pace and are influenced by the human’s intrinsic motivation to display and develop the skill. There is a psychology of skills to be mastered, rooted in the recognition of skills as fluid, dynamic, evolving constructs. Companies must accept that skills can only be measured, tracked and controlled by using sophisticated ontologies and analytics.
• Supply-Chain of Skills: What is the trade-off and what are the opportunity costs in your skills, locational and sourcing strategy? Optimising this means using skills as the centerpiece of all your strategic workforce planning, with a total-skills supply-chain management model.
With the new world of work no longer a curious, abstract exercise in ‘what if’ contemplation, but a hard and investment hungry requirement that has an exponential curve of criticality, the more time passes without minimum viable skills management capability the more strategic failure is inevitable. The skills cliff-edge is looming.