The grounds for competition are changing, with skills coming to the forefront.
The strategy consulting firm Boston Consulting Group (BCG) is doing some important work to help us understand the new imperatives of competition. See ‘The new logic of competition – winning the 20s‘ from the BCG Henderson Institute. They have identified five new imperatives for competition, with skills playing a critical role in each of these.
Let’s work through each of these and see the role that skills and skill management play as critical enablers.
Competing on the rate of learning
“[I]n traditional models of learning, the knowledge that matters—learning how to make one product or execute one process more efficiently—is static and enduring. Going forward, it will instead be necessary to build organizational capabilities for dynamic learning—learning how to do new things, and “learning how to learn” by leveraging new technology”
We learn in order to acquire skills and understand how to put them to work. It is the skills that lead and not the learning. Some of these skills will be held by humans, others will be the result of synergies between humans and tools, such as robots and AI applications. As part of this transition, skill management will supplant learning management as the dynamic place to integrate organizational capabilities and build competitive differentiation. The key point being that it is not enough to learn in the abstract, one must apply the learning as well.
Competing in ecosystems
Increasingly work is distributed across companies and teams are not only cross functional but cross organizational. Learning how to build and manage cross organizational teams is a new set of skills in its own right. Success requires a shift in values and behaviors as well. Companies that are focussed only on their own success will not be able to build long-term ecosystems that are creative, sustainable and resilient.
This does not mean that competition goes away. Value chains (or more accurately value webs) will compete between each other for market share and within the value web for profit share.
To support these ecosystems, skill and competency models need to be open and have touch points with other organizations. We are moving to a world where organizations share parts of their competency models and look for the integration points.
In the near future, we will see companies publishing the skills that are needed to successfully collaborate with them and exposing the skills of their people to collaborators. This in turn will require new rules about sharing knowledge and intellectual property.
Competing in a hybrid digital-physical world
Digital transformation has been a dominant meme for the past few years. With this, the world’s dominant companies have been digital. These trends may now be running their course, and over the next decade the key to success will be the seamless integration of the digital and physical world. There are signs of this all around us. Online retailers are opening physical stores, the Internet of Things has become commonplace, and a lot of innovation turns on understanding and interacting with the physical world, as with self-driving cars.
This has a lot of implications for how we understand and develop skills. We need to turn to the tradition of embodied cognition and the work of James J. Gibson on the ecology of vision to understand how skills, even sophisticated mental skills, rely on our experience of the body. This is one reason we have identified sketching with pencil and paper or on a whiteboard as an emerging critical skill.
Supporting the learning, assessment and application of embodied skills is going to be a big challenge for the talent management community, which has generally been content with lists of simple mental skills. We do not yet have the answer to this challenge, but it is something we are working on.
Competing on imagination
This is one of the most interesting of BCG’s points. The key to future strategy is the ability to imagine a different future and then take steps to bring your preferred future into existence. This requires many different skills and often asks that these skills be combined in new ways. Imagination often requires the ability to mash together different experiences to create something new. An example from popular culture is J.K. Rowling and the Harry Potter novels. Rowling brings together the English boarding school novel (think Enid Blyton) with classic tales of wizards and witches and blends in classic quest myths with the magic items that need to be collected to achieve a goal. The result is something new, that has now enchanted several generations of children, parents (and grandparents).
One way to go deeper into this is to apply Ian MacDonald’s ideas from his classic book Systems Leadership: Creating Positive Organizations. Competing on imagination is an example of Level of Work IV and above. It comes under the role of Systems Designer. MacDonald has a lot to say about systems design and has identified twenty critical systems design questions. The key is to approach each of these questions as a search for what may be possible. Imagination opens new possibilities and looks for ways to make these possibilities real.
We are currently looking at ways to weave MacDonald’s ideas into competency models to help people move from one level of work to another.
Watch for a future post on ‘imagination’ as a critical skill (see our Critical Skills series).
Competing on resilience
One consequence of all of these changes is more change, and change is not always for the better. In the 2020s organizations can expect to experience more internal and external shocks. The grounds of competition, collaboration and innovation will change quickly as boundaries shift. This makes resilience a core organizational capability.
Resilience has two aspects. The ability of a system to flex and then come back into configuration after a stress. The ability of a system to reconfigure (evolve) so that it can cooperate and compete in new value webs.
Reconfiguration almost always requires new skills and connecting existing skills in new ways (another reason why a simple list of skills will not cut it in the new world).
On our skill management platform, one way we enable resilience is by helping individuals and organizations identify their potential skills and to build their foundational skills.
Potential skills are those skills that people have or could readily develop that are not currently being applied (application comes in again). Our system enables this by suggesting skills to people and making it easier to find people with potential skills.
Foundational skills are the skills we use to develop new skills. Historically, companies have tended to over invest in applied skills and have assumed that people have or will invest in their foundational skills. This will not cut it in the 2020s. The need for rapid learning, imagination and resilience means that investment in foundational skills should be folded in with investments in specific business, technical, domain or tool specific skills.
Understanding the skills you have and the skills you need shouldn’t be so hard.
TeamFit can quickly and precisely give you the skill insights you have always wanted.
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