The warnings are dire. Even the biggest enterprises with astronomical valuations can no longer count on a maintaining their edge for even a decade.
It’s a “gale force warning to leaders,” Innosight says in its 2018 Corporate Longevity Forecast. At “the current churn rate, about half of S&P 500 companies will be replaced over the next ten years.”
Every corporation is at risk of becoming the next Sun Microsystems, the one-time powerhouse that quickly lost the vast majority of its value in a historic collapse. When Facebook took over Sun’s Silicon Valley campus, Mark Zuckerberg kept the Sun logo on the back of the big sign out front, giving his employees a daily reminder of what can happen to a successful company that doesn’t adapt quickly.
Today, the need to adapt lies first and foremost in the skills of the workforce. As McKinsey puts it, “The world of work faces an epochal transition.” Technological advancements may leave 375 million workers switching occupational categories by 2030. “The kinds of skills companies require will shift, with profound implications for the career paths individuals will need to pursue.” It’s “akin to coping with the large-scale shift from agricultural work to manufacturing that occurred in the early 20th century in North America and Europe, and more recently in China.”
There are “few precedents in which societies have successfully retrained such large numbers of people,” the McKinsey Global Institute said in a report. And even those few precedents took place over long periods of time. The speed of change today is unprecedented.
With digital disruption, the business landscape is shifting faster than ever. So the challenge businesses face in this respect isn’t just the large-scale reskilling--it’s doing so in an extremely compressed time frame. Developing your employees’ skills at a rate equivalent to the rate of change is the key to a sustainable competitive strategy.
How Businesses Are Adapting
Schools and governments aren’t going to solve this problem on their own. It’s up to businesses to lead the way. And top executives must be the ones to make it happen.
That’s why CEOs such as Randall Stephenson of AT&T are doing more than just asking, “Do we have the skills we need to win in our business?” Instead, their focus is on ensuring their employees develop ongoing skills through continuous learning.
As Stephenson told The New York Times, “There is a need to retool yourself, and you should not expect to stop.” He added that people who dedicate less than an ideal 5 to 10 hours a week to learning “will obsolete themselves with the technology.”
The company has described its own efforts as an “enterprise-wide skills pivot, which redefines jobs, roles, methods, and skills currently in use.”
Numerous companies, from Bank of America to Airbnb, are also taking proactive steps to upskill and reskill workers. The financial services company Visa, realizing the urgency and strategic nature of skilling its workforce, moved its learning function out of HR and into its corporate strategy division. This is a powerful sign that reskilling the workforce is being seen more strategically than just sending people to compliance training.
Tim Munden, chief learning officer at Unilever, is creating a strategy for upskilling and reskilling more than 161,000 employees around the globe, not as part of a separate learning strategy, but as one that is integrated into the company’s overall digital transformation strategy.
It’s a business strategy, not simply a learning program. Munden believes that “skills are utterly transformational in the 21st century. As organizations become networks--networks of people not just employed by you, but networks of people inside and out of the company--skills are what form the connections of the network. Networks form around what a person can do, and we employ people for what they can do, as well as their purpose in doing it.”
A Road Map for Skill Building
To engage in these efforts, business leaders and employees need a road map. Many CEOs don’t know the full makeup of skills they already have inside their workforce, let alone which skills they need. Most employees also don’t have a clear view of all the skills they have, and don’t know which they may want to learn to position themselves most strongly for the future.
The company Degreed has created an image that shows the questions people should be asking (shown above).
Collect Data at Four Levels
For corporate leaders, crucial answers to these questions can come from data and insights. Learning technologies, search data, and web analytics can provide lots of information. To get a complete picture, executives must seek out answers at four different levels:
- Industry Level--What are the most needed skills in your industry? What are the skills of your competitors, and how does your company match up? Collect data through industry benchmark studies and analyst reports.
- Company Level--What are the most important strategic drivers and metrics in the business? For example, say your customers' requests for expertise on data insights keeps growing. You’ll know that’s a strategic area of focus.
- Organizational/Team Level--What skills do your people have and what skills do your people need to stay competitive? Conduct assessments (skill self-assessments, 360 assessments, peer assessments, manager assessments). You may discover that you already have many employees with data insights skills, and just not know it. Or you may learn that your managers need more employees to have prioritization skills. You can then set that as a learning goal.
- Individual Level--What are your employees currently learning, and how are they going about it? Collect data about both formal and informal learning. At Degreed, we track this data regularly using our own product to see what skills we have within our organization. Then, when there is an internal opening that requires those skills, we have a good idea who is interested. And employees are excited when they see opportunities tied to the skills they’re developing.
The New Vital Skill Set
The set of skills you need, and the skills employees want to pursue, will constantly change. New technologies pop up constantly, and fluency in them can quickly become a necessity to remaining competitive in any industry.
That’s why today, above all else, the vital skill set for a workforce today includes the ability to learn new things quickly; collaboration and teamwork; perseverance; curiosity, and the ability to question the world around you. These give your organization learning agility. They’re the central ingredients for you to keep evolving.
If your staff isn’t ready and willing to learn every day in order to keep up with a rapidly changing world, it can’t and won’t be able to compete with the big companies and new startups vying for market share in your industry.
Building a Learning Ecosystem
The organizations that are doing best at this are creating environments in which learning can flourish. They use technology to make self-directed learning available. They help employees discover career goals and show pathways to learning the necessary skills. They provide platforms for employees to share their knowledge with each other. And they give their workers opportunities to practice their new skills and put them to use.
At first, some companies may combine multiple technologies to make all this happen. In the long run, though, companies should be thinking about creating a learning “ecosystem,” which seamlessly integrates best-of-breed technologies for the problems they want to solve.
These ecosystems are agile themselves. For example, if you are using a video content platform today and you’ve integrated it into your learning ecosystem, then later you find there is another video platform that suits your needs better, you can easily swap it out. You are not tied to a single component; your ecosystem keeps evolving as technology continues to evolve.
Ultimately, though, the technology is only useful if executives make clear that their commitment to workplace learning is real and pragmatic. Upskilling and reskilling take time--and that means not only allowing people time to reflect on learning during their work day, but to also incorporate learning into the natural flow of people’s job. In the short run, that can mean giving up a bit of immediate productivity. But in the long run, the benefits of agility far outweigh any costs.
It means putting trust in employees. We recommend letting go of the controlling cultures that have long defined businesses. It’s time to create cultures that empower creative, innovative, smart people who are given the freedom and autonomy to work in ways that makes them most productive--and to learn and develop along the way.
A culture that puts autonomy and learning at its core will get the best of what people can achieve.