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The Wicked Company

Will skills-based organisations fail?

I listened to Deloitte’s podcast on Human Capital episode about the company Workday which provides a service to create skills-based organisations.

There is a lot to say about how new skills emerge when they become valuable and to whom; however, the podcast conversation felt oddly familiar. I couldn’t stop thinking of it just being an enterprise version of LinkedIn and its skill labels. LinkedIn skills never worked for me, and I am someone, who constantly learns new skills and discovers new tools.

So is the skills-based approach going to work for organisations and HR?

I believe it won’t, and here is why:

In over 25 years working in innovation, creativity and with organisations who want that flexible type of output, I saw some key challenges:

  • HOW: Organisations know they need to change but do not know how. The processes seem to be a significant hurdle. In every of my last three years of change and transformation projects, a new process and the skills it needed was needed from day 1. The execution of how to change has been eradicated for decades and the expertise is missing from organisations and often their consultants alike.
  • WHY: In the absence of knowing how to change, most organisations fall back no old habits of efficiency, which translates to polishing the outdated old. New skills like service design, creative technology, growth hackers, systems thinkers, behavioural scientists, etc. are brought in, but without the integration these need. The WHY is not about the skills, but the commitment and mindset needed to do them. Often, the new is only paid lip service. In one project I saw a company invest $2 billion on efficiency and not a single time, customer-centred research was mentioned. All was invested on upgrading old tech boxes.
  • WHAT: Organisations are struggling with giving labels to people. It creates silos, limiting what people can do with existing and hidden skills. At most projects I was involved in, I found people who had been sitting on ideas and had spent time getting into skills that their company didn’t know or never listened to. I could also name at least four skills that do the same thing. Service Design, Business Analysts, Enterprise Architecture, Change Management, Systems and Organisational Designers all work to improve internal and external processes and ecosystems. The LinkedIn labels is a messy system that takes too much time to organise and update. Ask any enterprise architect who has ever done a level 3 capability matrix. After about 15 years of updating and amending with no real value added, I ended up deleting mine down to three, just to make a point.

In short, I think organisations will struggle to create a skills system that works for them or that stays updated fast enough. There is also the tendency that skill labels give senior management the false belief that they know what is there and what isn’t. Current skills or capability systems or too abstracted from reality. Teams do know what they need and shouldn’t have to wait for senior management to have a steering committee meeting. It is not flexible enough, nor does it scale. At a transformation project at a large telco, I saw with my own eyes how incomplete or wrong skills can be. They could not show that a project manager in our team was an excellent researcher or that a designer was outstanding in building business cases.

The same is true for the magical skills marketplace. If you do not understand what team you need, how can you write the right skills and scope for the team on the skills marketplace? Garbage-in-garbage-out.

Skills are an abstraction of reality and a means to an end. There are many roads to Rome, and the same applies to skills. We need to abstract less, not more. We need to stop tracking every little thing, like being able to ask research level questions as a specialist capability. Too many of those can be learned within a day or two. Many of those have become commodities to use as a baseline. They are the 90% of value to maintain the status quo, but will not create new value.

So what to do instead?

After 25 years across too many industries and organisations to name, three aspects lead my approach today:

Outcome-based, effectiveness-driven

A business should be effective. It is a messy beast, which can never be perfect or efficient. A good outcome is defined by the right balance between Desirability (customer value), Viability (business value) and Feasibility (business capabilities) (DVF). A business that is not balanced on this will either lose money or customers or both. A great team strikes that balance in everything it produces. To produce a great team, you should have a balance within the team or support the team made out of those DVF aspects. As we have seen before many different skills can lead to the same output. Removing skills from it will make teams easier to gel, create more even conversations and will not create meetings where skills and tools lead to hours of discussions on who is right. And even balance of bias and open mind creates the best teams according to Google. Furthermore, we have all seen that if there is too much business value and no customer value, no customer buys it. If there is no business value, the business won’t survive, and if the company can’t produce the product or service, then, well… The less we are anchored in skill silos, the more we are producing real, de-risked value.

Wicked Problem Solving

I loved stealing Joe Pine’s brilliant graphic on the evolution of what organisations make margins with. From commodity to service, he added experiences over 20 years ago. Read it in ‘The Experience Economy’, essential reading! I am adding wicked problems. As an evolution to experiences wicked problems do not always require active engagement with the customer; think investment bots. They also keep evolving with the customer’s complex problem that they help solve. Think about ways to save money over 10–20 years. They are the new exponential margin you want to chase. Hire people who can look at these complexities across verticals and silos and are comfortable with them. These people often sit in the process prior to delivery. This is where the value is, so invest in that. Remove skill silos as much as you can. Removing silos will show the shortcomings of your skills marketplace.

Constructive Development Theory

Using Harvard Psychologist Robert Kegan’s adult development theory was an eye-opener for me. Across your organisation, people will align to any of the five stages. Depending what stage you belong to, you will have a different behaviour and mindset to change. It identifies early adopters and followers. For some teams, especially those flexible across projects and subject matters, you want people who do not need a manager. These will drive future profits most. It does not mean, everyone else is valued less, just that some people are better at certain things than others.

This video explains more of this.

Therefore:

Skills have too high an abstraction level, many overlap and create confusion, many create friction because of different language and tools that inherently do the same thing. Others aren’t worth mentioning anymore, like the ability to use word or excel. Updating them takes up too much time. Others have a short lifespan, or are new versions of old ideas. Skills are too abstract for the value want to create and they are not the solution. Invest in collaborative value mixing in teams, recognise bias on ideas and value of them, invest in people understanding each other’s benefits. In short, invest in an alignment of value and language that sits closer to the reality of market and customer rather than to abstract and silo your future options. Yes, that will increase resilience.

What do you think?

Are you planning to create a skill-based marketplace?

#nomoresilos #teamops

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Marcus Kirsch

Marcus Kirsch

Innovation, Service Design & Transformation specialist. Keynote speaker and author. Opinions are my own.