Leading Your Organization into the Future: A Skills-Based Approach

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Abstract: This article explores how organizations can transition to a skills-based approach through examining the research foundation and providing practical recommendations based on work with companies that have successfully made this shift. It discusses how skills-based approaches are rooted in research showing the growing importance of digital skills and need for employee reskilling. The article then recommends that organizations first change internal mindsets from focusing on roles to leveraging skills. Additional steps include developing a granular skills framework, aligning HR systems like recruiting and performance reviews to the framework, implementing upskilling programs for current employees, and instituting metrics to measure progress and identify areas for improvement. Case studies and examples from various industries are used to illustrate how a holistic transformation to skills-based thinking can unlock potential across an organization and position it for success in a constantly changing environment.

As management consultants and organizational researchers, our roles are to study best practices, understand emerging trends, and provide practical guidance to help leaders navigate change. In today's dynamic environment, developing a skills-based approach has become a critical success factor for organizations. My experiences working with numerous companies have shown me that making this shift does not happen overnight - it requires rethinking structures, processes and mindsets in a holistic way.

Today we will explore the research foundation for skills-based approaches and provide practical recommendations, examples and insights based on my work with organizations in various industries who have successfully made this transition.

Understanding the Research Behind Skills-Based Organizations

The concept of skills-based organizations is rooted in substantial research on topics like competency frameworks, skill ecosystems and future of work trends. Scholars like David Bakhshi, Jacques Bughin and Nicolas van Zeebroeck analyzed vast datasets and found that digital skills will become increasingly important across all industries and job types (2017). Their work showed digital permeation occurring in once traditional roles like accountants, teachers and nurses. Other researchers evaluated competency models and concluded skills-based approaches are better than role-based approaches for promoting flexibility, resilience and adaptability (Lucia & Lepsinger, 1999).

Additionally, the World Economic Forum's 2020 Future of Jobs Report projected that by 2025, 50% of employees will need reskilling as technologies disrupt existing jobs and create new categories of work (2020). Their findings highlight the growing skills gaps organizations must address to retain top talent and stay competitive. Taken together, this research establishes skills as the future currency for both individuals and enterprises. To thrive amid constant change, organizations must evaluate their operations and strategies through a skills lens.

Transitioning Mindsets from Roles to Skills

Shifting to a skills-based approach first requires a mental model shift throughout the organization. Most companies are traditionally structured around functional silos and clear roles/hierarchies. However, roles can be too rigid and limited whereas skills are transferable, adaptive and cross-functional. To promote cross-pollination of skills, organizations must shift away from "my role" and "your role" language to focusing on how various skills across teams can be leveraged.

At [example industry organization], we made mindset shifts a priority when transitioning five years ago. Leaders held open forums to discuss how skills thinking could break down silos and encourage innovation. We provided training on having skills-based conversations and evaluating performance based on skills mastery, rather than role checklists. Overtime, just changing the way people talked about their work and each other's contributions made a huge difference. Skills became a common language for collaboration instead of division.

Building a Granular Skills Framework

With aligned mindsets, the next step is developing a comprehensive skills framework. Frameworks allow organizations to clearly define, assess and track skills in a structured way. They also promote transparency by making valued skills visible for career growth. When building our framework, we conducted stakeholder interviews, focus groups and surveys to understand all relevant skills across departments (Bohlander & Snell, 2016). We analyzed job descriptions and mapped skills rather than just roles.

Our final framework consisted of 5 overarching competency areas with 50+ granular skills ranked by importance. Having granular skills was key so managers could provide more actionable feedback and training. The framework is dynamic - we regularly review additions or modifications based on strategic plans. Other organizations can follow similar processes and leverage existing frameworks like NICE or Skills Canada as starting templates to customize. Overall, frameworks establish the building blocks for a skills-based culture.

Aligning HR Systems to the Skills Framework

With skills defined, the framework must be integrated into all HR systems and processes. This was an area many of our client organizations struggled with as legacy systems were role-focused. Recruiting, performance reviews, learning and development, succession planning - each function required overhaul. Recruiting shifts to focus on transferable skills instead of specific experiences. For performance reviews, managers assess proficiency levels per skill compared to expectations.

At one larger manufacturing firm, skills are now at the core of their talent reviews to identify strengths across departments and future leaders. They also built an online skills marketplace where employees can browse projects requiring certain skills. Similarly, their learning catalog is sorted by skill areas rather than general topics so employees can self-direct reskilling. Integrating skills in these ways unleashes synergies, showing people new pathways for growth beyond their original roles.

Upskilling the Existing Workforce

While promising candidates can be recruited with desired skills, no framework is complete without a strategy for upskilling the current workforce. The World Economic Forum estimates that more than 40% of core skills required for many jobs will change in the next 5 years alone (2020). Even technical skills like coding become outdated. Organizations must partner with employees on this transition through various learning modalities.

At Human Capital Innovations, we facilitate both formal and informal learning opportunities. Employees can access online courses/certifications, shadow colleagues, request stretch assignments, attend workshops and compete in hackathons - all tracked via individual development plans linked to their profiles. Management rotates roles periodically to cross-train and gain new perspectives. Leaders also carve time for sharing best practices, collaborating on projects across functions and mentoring relationships. A learning culture inspires ongoing skills growth from within.

Measuring Success and Course Correcting

No major transformation happens without measurement and refinement. Organizations need quantifiable metrics as well as qualitative feedback to evaluate progress, surface blockers and ensure continued gains. Common metrics include skills accessibility/utilization rates, internal job posting fulfillment percentages, learning participation rates and employee sentiment surveys. At a granular level, managers assess proficiency level changes per individual skill over time.

If metrics reveal underdevelopment in certain skills areas, action is taken such as deploying new courses, incentivizing skill-sharing challenges or adjusting framework priorities. Continuous improvement is key. If surveys point to process pain points, simplification efforts begin. For example, at [consumer goods brand], employees commented their skills profiles were taking too long to update. So HR streamlined the data entry form resulting in faster profile maintenance and ownership. Constant learning happens at both the organizational and individual level.

Conclusion

Transitioning to a skills-based approach requires holistic transformation but yields tremendous benefits by unlocking potentials across an organization. By following the steps of shifting mindsets, building comprehensive yet dynamic skills frameworks, aligning HR systems, upskilling the workforce and instituting measurement practices, companies can develop a skills-based culture and workforce of the future. My hope is this practitioner-oriented perspective and practical industry examples provide a roadmap to get your own organization started on the journey. Skills thinking will position you to tackle whatever challenges may come by capitalizing on the diverse strengths within. Let's connect further on how I may help guide your transition in a customized way.

References

1. Bakhshi, H., Downing, J. M., Osborne, M. A., & Schneider, P. (2017). The future of skills: Employment in 2030. London: Pearson and Nesta.

2. Lucia, A. D., & Lepsinger, R. (1999). The art and science of competency models: Pinpointing critical success factors in organizations. San Francisco: Jossey-Bass/Pfeiffer.

3. World Economic Forum. (2020). The future of jobs report 2020.

4. Bohlander, G., & Snell, S. (2016). Managing human resources (16th ed.). Mason, OH: South-Western Cengage Learning.

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Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Associate Dean and Director of HR Programs (WGU); Professor, Organizational Leadership (UVU); OD/HR/Leadership Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.

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Suggested Citation: Westover, J. H. (2025). Leading Your Organization into the Future: A Skills-Based Approach. Human Capital Leadership Review, 25(4). doi.org/10.70175/hclreview.2020.25.4.3