Skills Framework & Skills-Based Organization Agility | Deloitte US has been saved
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By Michael Griffiths and Ina Gantcheva
Agility is the new imperative. Those organizations that view disruption as an opportunity rather than a threat understand the importance of agility when faced with uncertainty1. To survive and thrive in today’s business climate, you don’t just need to adapt, you need to adapt quickly and effectively. That requires keeping pace with shifting industry boundaries, rapidly evolving technologies, and unpredictable change1.
As organizations navigate turbulent times, they need a workforce that can do the same; an organization is agile only to the extent that its workforce is ready to handle any need or future scenario. Yet, many organizations today are not structured in a way that unleashes the superpowers of their workforce. Rigidity, slow incremental change, and poor execution create complexity and hamper the ability to move at speed. Being able to respond to change in a fast, agile, and innovative manner must be embedded in organizational design and operation2.
A skills-based organization (SBO) can change all that. A SBO provides an integrated system that ensures that the workforce is aligned, capable, effective, adaptable, efficient, and inspired by shifting from managing employment and supervising work done in jobs, to dynamically orchestrating and cultivating ever-evolving skills and work.
Architecting a SBO
To enable agility and maintain competitiveness, SBOs3 shift from understanding the unit of work in terms of fixed, static jobs, to reimaging it in terms of a dynamic landscape of skills that can be nimbly deployed to work as it continuously evolves. This new operating model for work and workforce places skills and human capabilities at the heart of operational design, fueling a wide range of talent and business decisions, creating continual adaptiveness, and unlocking the full potential of the workforce (see Figure 1).
Figure 1: Integrate Skills Through a “Hub” and “Spoke” Model
Strategies to architect a SBO turn talent management on its head4, redefining and reimagining every talent practice to be based more on skills than on jobs, and setting a new direction for the future of work. To design and develop a resilient and agile workforce, organizations need to move away from static, unidimensional competency-based talent management to dynamic, multidimensional skills frameworks, personalizing skills and capability development to rapidly deploy talent to meet critical business needs.
From static competencies to adaptive, predictive, and personalized skills
Traditional competency models were not designed for agility or Big Data, limiting an organization’s ability to analyze their workforce and adapt their workforce strategy accordingly. The combination of knowledge, skills, abilities, behaviors, and other characteristics aligned to job activities create a static, unidimensional picture of performance, making it difficult to pinpoint where talent skill and capability challenges and opportunities exist.
Skills are the tactical, technical, or scientific knowledge or expertise, and patterns of activity needed to accomplish tasks and deliver outcomes, within a specific context. Skills also include human capabilities like the ability to learn, emotional intelligence, and critical thinking. Unlike competencies (and competency models), skills are dynamic and rapidly evolving. When contexts change—because of new technologies, market disruptions, different strategies, etc.—so does the need for skills. A SBO is about continuously accessing and using the skills of the workforce at an atomic level–not by broad groups of jobs, but by the specific, enumerated skills that people possess.
Skills can be acquired through a variety of jobs or experience; focusing on skills opens-up access to the full capabilities of the worker, not just those in the current role. This centralized, transparent, and granular view of skills unlocks the potential of the workforce as a whole, and enables organizations to fluidly port skills across functions, disciplines, departments, and other traditional lines of business.
Skills frameworks: what they are and how they fuel the SBO
A number of skills frameworks can power the SBO, including skills clouds, taxonomies, ontologies, and graphs.
A skills cloud, also called a skill inventory or skill registry, is an internal database of all known skill terms – a single source of truth for skills that is used to feed skills ontologies, taxonomies, and graphs. By using a skills cloud, companies can scan external market trends to build the internal database of skills; mapping millions of skills based on advertised jobs, resumes, and social profiles. Organizations can match those evolving databases with data from their internal repository of resumes, performance reviews, and job descriptions to infer skills for the existing workforce. Skills curated from skills cloud technology are a ‘trigger’ to inform updates and changes to skills taxonomies.
A skills taxonomy is the hub of a SBO and is a system that classifies skills across the company into groups and clusters (see Figure 2). Skills taxonomies typically include the skills that are most important to the business goals, sometimes with definitions of skills as well. Having a skills taxonomy creates a common understanding and language that can be used to deliver effective workforce strategies that drive organizational agility.
Figure 2: Skills Taxonomy Structure
What a skills taxonomy contains and how skills are classified depends on the unique needs of the organization. A skills taxonomy will shift and change with the dynamic nature of a business and the workforce. Skills taxonomies should be designed to be updated quickly, as needed, to drive agility. Taxonomies can be high or low in complexity, but whatever the complexity or level of detail contained within a skills taxonomy, it drives the integration of skills through the “spokes” of various talent processes to include organizational development, job design, workforce planning and analytics, talent acquisition, career development and mobility, learning and leadership, and succession planning.
Skills ontologies simplify skills in the taxonomy; they create a common language of skills that may vary across different dimensions or platforms and enable an organize to define and measure relationships between skills.
Many organizations visually represent the skills ontology with a skills graph, which visually shows the relationships between skills and how they relate to role or other factors. Mapping the relationship between skills can enable Artificial Intelligence (AI) to make suggestions to workers regarding upskilling or mobility opportunities.
Figure 3: Skills Ontology Structure
The next frontier
Several technology developments are on the horizon that may make it easier to identify and manage the ever-growing diversity of skills in the organization. Several efforts5 are underway to create a common skills taxonomy across organizations, thereby enabling skills-based hiring, greater mobility and redeployment of workers across organizations, and the ability for learning providers to more effectively deliver training. This common language for skills will grow increasingly important as “skills passports” emerge – digital records of an individual’s verified skills and credentials that a worker owns and that can be shared with prospective employers.
Ultimately, making skills actionable and translating them into results is the raison d'etre of the SBO. Skills frameworks like taxonomies, ontologies, and clouds alone are not enough. But they are the infrastructure that powers the ability to create more dynamic understanding of people and work and unleash organizational and workforce agility.
1. Mallon, David & Davis, Timothy (2019). Designing Your Organization to Meet the Challenges of a Disruptive Future. Deloitte.
2. Mallon, David & Ratnu, Charu (2020). Designing for Adaptability: Encourage Workforce Growth and Mobility. Deloitte.
3. Griffiths, Michael, Cantrell, Sue, Strobel, Kari, & Weston, James (2021). The skills-based organization: Fueling the 21st century enterprise with skills. Deloitte’s Capital H Blog.
4. Cantrell, Sue, Pearce, Jonathan, Griffiths, Michael, Strobel, Kari, & Weston, James (2021). Skills: The new workforce operating system - Goodbye talent management, hello skills-based organization. Deloitte’s Capital H Blog.
5. World Economic Forum (2021). Building a Common Language for Skills at Work A Global Taxonomy