TQ's 2024 Skills Research: 1. Early Insights

Since I began my #skills research in December, I have listened to the journey and experience of more than 20 global companies and their talent leaders. My research has taken me to New York where I was fortunate to meet and hear from HSBC, Novartis, Schneider Electric, Mastercard, Standard Chartered, Takeda, Omnicom Media Group, MetLife , Seagate Technology and Telstra. I've also spoken with various vendors and practitioners from Google, Randstad, Arcadis , Cisco, Gartner, GoFIGR, Talentsky and even NASA - National Aeronautics and Space Administration .

NASA has the coolest problem statement, "How do we ensure we have the skills needed to get back to the moon, so we can go on to Mars".

This monthly newsletter will provide you with the latest insights and opinions from experts as I progress my research, so this first edition provides an update on my conversations over the past three months, initial insights and early point of view.

TQ will be launching a series of roundtables to discuss with HR/Talent leaders the findings and their local application later this year, followed by a white paper that will be available to organisations so they can consider the relevance, and their readiness of becoming a skills-based organisation.

Research Background:

Back in December I was concerned that I, and the broader TQSolutions team, had swallowed the skills Kool-Aid without pausing to stress test the theory itself, nor had we critically evaluated the success drivers that are required beyond tech and data.

I had a nagging concern that the industry had been over-indexing on the tech and underplaying the 'human ecosystem' beyond skills. I suspected this tech focus was being driven by global consulting firms, innovative early-stage HR tech companies, and the VC firms bank-rolling their growth for their own commercial self-interest.

It is worth noting at this point that TQSolutions is vendor agnostic; we have no commercial relationships with HR tech firms, and we receive no financial kickbacks from any of our advisory work. We recommend certain vendors if we genuinely feel they are relevant to a client strategy or problem statement. Hence, we regularly attend product updates and roadmap sessions with the key vendors globally.

So my research set out to 'stress test' the skills strategy itself and understand the relevance of skills to various organisations. We did not set out assuming skills is the right thing to be doing.

Those Opposed:

There have been several people we have interviewed or met along the way who think skills is not necessarily the right thing to focus on, or that the strategy itself is flawed.

Dart Lindsley said it is a distant 'engineering' solution to the problem, and is another example of companies labelling or tagging people so they can 'do something to them'. Dart would much prefer to see 'work experience' as a product being designed for 'consumers' (talent) at a more 'proximate' level led by leaders.

Marc Effron released a summary paper of his research into #skillsbasedorganisations where he concludes that 'the juice is not currently worth the squeeze' pointing fingers at HR tech and large consulting firms for their overt promotion of the solution.

Aaron McEwan thinks skills is not the ideal focus, instead presenting a case for focusing on the work/tasks themselves and establishing a market for people to opt in (and out) of the work/tasks similar to the Uber model.

There are many more opinions out there, but my first call out is that this is not a universally agreed strategy, nor is there a clear view on alternatives.

Those in Favour:

Equally, I have met, listened to, and read about many people and companies already on the journey and seeing the benefits of becoming a skills-based organisation.

Josh Bersin released his 2023 research on 'Dynamic Organisations' which presents much of the why behind the strategy but also showcases the more than important role culture, leadership and ways of working plays in the ultimate success of the strategy. Josh shared this perspective at the recent event in New York which talks to some of my initial scepticism and hypothesis:

"Skills are a means to an end. They are not the end itself. Don't just try to become a skills-based organisation; instead fall in love with the problem you are trying to solve.

It's not technology. It's culture."

Many organisations are well on this journey, including NASA, HSBC, Novartis, Mastercard, Standard Chartered Bank, Schneider Electric, Metlife, Seagate and EPAM Systems.

From my early conversations with these businesses here are some of my key takeaways:

• Problems to solve: success is more likely when there is strong alignment to genuine business problems and potential business impact i.e. this should not be seen as a HR project or initiative. It is a business transformation to tackle very complex business and workforce challenges.
• Test and learn: most companies started small with lower-risk pilots before cascading more widely to the organisation. It is clear from my conversations that some business functions/department, regions, or cohorts within the business are more ready for this strategy than others. Most companies did not go 'big-bang' from the outset and most vendors actually suggest not doing this. That said the pilot does need to be relatively substantive to test the system, train the Ai and gather sufficient learnings.
• Ai evolution: the tech is smart, but it's getting smarter fast. While many people acknowledge the Ai algorithms have room to improve, they are continually becoming more sophisticated, allowing more personalisation and customisation at scale. Gen Ai has only been with us for 18 months so most of the vendor roadmaps in this space are heavily layering in the use of Gen Ai which will drive even greater user adoption through an uplift in experience.
• Change management: do not underestimate the quantum of change required to make this transition. I have coined the phrase 'the $1 to $5 ratio', meaning that you should budget $5 in change and comms spend for every $1 in tech spend. A lot of clients are not thinking this way, their business cases are focused on the tech and implementation spend, and change management is a small line item and this is the wrong approach. Every person I have spoken with or listened to has emphasised the criticality of change and comms within their organisation - it's a transformation to the ways of working after all.
• Human ecosystem: the success of this strategy rests at the feet of humans - the readiness of, and adoption by workers, the readiness of, and adoption by leaders, the availability and capacity of people to play in the ecosystem, the presence of a growth, rather than fixed mindset towards development, the fluidity and alignment of people policies and practices, and importantly the leadership seeing themselves as talent makers not talent takers. Humans trump the tech big time.

There are numerous other complexities and issues to dive into such as skill definition itself, proficiency ratings, validity of inference models, ways of working and organisational culture, use-case prioritisation and selection, and skills-based hiring.

I will save these topics for another day and leave you with my current point of view:

"Skills is a thing, it's worth exploring, but it's not for everyone."

In the meantime, TQSolutions will continue developing its consulting frameworks and methodologies to help companies deeply explore skills-based strategies and establish if, when and where, these may be relevant to them.

*This is the first edition of a monthly update I will give sharing my latest research and insights ahead of roundtables for industry leaders and a white paper later this year. Please share this newsletter with colleagues who may be considering their own transition to a skill-based organisation.

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