A new chapter begins

Skills-powered organisations Skills-powered strategies

What’s really needed for lasting transformation? 

Agility is no longer a project management philosophy; it’s the lifeblood of the modern organisation.

Agile began in software development. Teams would iterate new products incrementally, based on quick-fire customer feedback and roll out updated versions in a cycle of testing and learning. 

From there, the core values of agile were often applied beyond the tech department, finding another home in organisational design and workforce management. The need to react and adapt more quickly in an increasingly complex and challenging landscape ushered in numerous agile-inspired management philosophies including, but not limited to: Holacracy, flat management, sociocracy and teal organisations.

3 core values of agile:[1]

1

Prioritise individuals and interactions over processes and tools

2

Prioritise customer collaboration over contract negotiation

3

Prioritise responding to change over following a plan

For some businesses, agile is entering a new phase. As it has become an increasingly dominant term within organisational change, some organisations have found its implementation reduced to a narrow set of prescribed rituals and routines that risk becoming self-serving or disconnected from real business outcomes. Others are concerned that the hype surrounding agile (and the proliferation of endlessly reconfigured squads, tribes and pods) can leave employees struggling to maintain a sense of professional identity and sustained energy.

For businesses facing these challenges, language such as “adaptability” and “adaptive capacity” feel more aligned with their goals. This new emphasis goes beyond process and builds true organisational resilience by highlighting that navigating constant disruption and complexity hinges on the mindsets, behaviours and core skills of the workforce.

Are skills missing from the equation?

Another common reason agile transformation fails is that skills are not fully integrated into their new work design and workforce management. As economic challenges, increasing competitiveness and AI advancements accelerate in today’s polycrisis world, businesses cannot afford to get this wrong.
Improving workforce agility is among the top three business priorities for 2025. 

Mercer’s 2025 Executive Outlook

Transforming the workforce by shifting to an agile skills-powered model is one way to avoid getting left behind. By redesigning the work itself and replacing silos with networked teams and less hierarchy, talent can flow to work, maximising organisational agility. This is how organisations can keep pace with today's demands.

Designing for agility

Left Section (Pyramid Diagram):

  • The pyramid is segmented into three horizontal layers:
  1. Top layer: Labelled "Detailed instruction," representing the most specific and directive level.
  2. Middle layer: Labelled "Bureaucracy," indicating a more structured but less detailed level.
  3. Bottom layer: Labelled "Talent captive in silos," depicting isolated groups or units.
  • The pyramid is topped with a small triangle labelled "Top-down hierarchy," emphasising a hierarchical approach at the top.
  • At the base of the pyramid, there are three groups of circles, each group in a different shade of blue or green, representing different talent groups or silos.

Right Section (Circular Diagram):

  • The circle contains five smaller circles arranged in a circular pattern, each filled with clusters of small circles in shades of blue and green.
  • Surrounding the circle are four key points:
  • "AI coordinates the deployment of talent and supervision" (top)
  • "Work and development are seamlessly integrated" (right)
  • "Project-based structure to match skills to work" (bottom right)
  • "Leadership focused on coaching and development" (bottom left)
  • The overall design suggests a shift from hierarchical, siloed talent management to a more integrated, agile, and AI-coordinated approach emphasising seamless work, project-based structures, and leadership development.

Benefits of agility backed by skills

Talent mobility will grind to a halt if leaders and employees are constrained by traditional ways of thinking about jobs.[2] For example, an employee who still thinks in terms of what is within or outside of their role scope will not flow seamlessly to where their skills are needed. To avoid this, jobs need to be deconstructed so that it is skills, and not jobs, that are the currency of work. As a result, employees are seen as their whole selves with a unique combination of deconstructed skills, rather than as jobholders who satisfy designated job requirements.
Only 27% of executives believe their talent models are agile enough to pivot people from one area to another.

Mercer’s 2025 Executive Outlook

By putting skills at the heart of your agile transformation, you can unlock:
  • Greater speed in execution
    Agile teams often rely on “sprints”, where feedback is received on their work-in-progress for faster development. Agile’s built-in transparency, iterative planning and feedback loops give organisations a clear sense of critical skills and emerging gaps so they can be addressed in good time.
  • Improved productivity, sustainability and performance
    Agile teams pride themselves on their adaptability and prioritisation, focusing on the highest-value tasks to maintain focus. Often, reduced bureaucracy via a culture of open feedback also drives efficiency. 
  • Personalised, continuous learning
    Agile teams' test-and-learn mindset makes continuous learning a natural part of the workflow.
  • Continuous supply of relevant skills
    Agile organisations refuse to lose momentum on upskilling and reskilling talent, meaning that business-critical skills are continuously cultivated.
  • Seamless talent/skill deployment
    In an agile model, teams are often cross-functional and talent mobility is king. Employees are directed towards the highest-impact projects or tasks based on their skillset and availability (e.g., in an internal talent marketplace), meaning talent and skills deployment are much more fluid.

What you need to begin your agile transformation

1. Foundational elements: Tasks, skills and AI

The way we see it, there are three foundational elements to organisational agility: 
Tasks

The underlying units of work grow in importance as the deconstruction, redeployment and reconstruction of work becomes a perpetual need

Skills

The currency of the workforce and the foundation for connecting talent to work

AI

A work partner, insight generator and talent management tool (skills matching, human-machine teaming)

2. The right mindset, skillset and toolset

Whether you continue to think in terms of agile, or find the concepts of adaptability or adaptive capacity more fitting, an effective transformation is about mindset, skillset and toolset — not simply process.

  • Cultural shift towards agility, collaboration and innovation
  • Engaged leaders who foster internal mobility
  • Empowered employees who take ownership of their development
  • Understand the case for agile and desired outcomes

  • Continuous learning and development baked into the work experience
  • Organisation-wide capabilities in adaptability and agility
  • Feedback as a universal skill to foster learning and agility

  • Deconstruct jobs, redeploy tasks and reconstruct work with work design
  • Address changing skills demand with continuous talent development
  • Connect talent to work with seamless talent deployment
  • Human-machine teaming (including agentic AI)
  • Data-driven decision making across workforce management, talent acquisition and engagement

3. Agility enablers for lasting transformation

Finally, to fully embed agility into your organisation, these enablers need to work in tandem:

Leaders need to adopt and advocate agility. They can do this by supporting the shift to the new work operating system from jobs and jobholders to skills and work, and fostering internal development and mobility. Budgets and incentives should be aligned with the new structure so they don’t become blockers in the more fluid environment.

Introduce global guidelines for talent deployment, account for legal and/or local requirements, monitor success and define accountability for managing and updating the skills taxonomy. Increasingly, companies are establishing ‘Workforce Transformation Offices’ or ‘Future of Work’ teams that are responsible for such practice guidance and governance.

For internal mobility to take effect, employees must proactively engage with open jobs, projects and gigs as they emerge. To be sustainable, learning opportunities also need to be baked into the experience, so employees can commit to learning high-value adjacent skills and look for further opportunities to express acquired skills. 

The entire organisation must be on the same journey. Engage all stakeholders and co-create solutions to build the desired future. Creating a culture of skills-powered agility via flexible talent development and deployment is everyone’s responsibility.

As a key driver of this transformation, HR needs to be the centre of expertise, supporting leaders and managers with redesigning work. To ensure robust change management, HR leaders can pursue executive sponsorship that further champions the benefits of skills-powered agility.

The less exciting but essential part of transformation is compliance. Understand the required finance workflows, accounting and approvals, particularly for work done across business units or regions. Establish systems to ensure compliance-ready talent deployment within local market requirements across finance, IT and legal entities.

Understand the optimal combination of technology and AI platforms for your business. AI can reduce grunt work by establishing skill profiles, matching skills supply to demand or surfacing developmental resources to close skill gaps. 

A solid skills foundation encompasses a comprehensive skills taxonomy that includes both technical and soft skills, along with skills validation through proficiency levels and assessments.

As in any skills-powered transformation, embracing agility means embracing progress over perfection. 

Ready to dismantle what’s no longer fit for purpose? Discover more about embracing agility with Mercer:

    About the author(s)
    Ravin Jesuthasan

    Senior Partner, Global Transformation Services Leader

    Paul Habgood

    Workforce Transformation, UK & Europe

    Ephraim Patrick

    Partner, Workforce Transformation, Australia

    Brian Fisher

    Work & Skills Solutions Leader

    Kai Anderson

    Transformation Lead, International

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    [1] Jesuthasan, R and Boudreau, J.W. Work Without Jobs, The MIT Press, 2023

    [2] Jesuthasan, R and Boudreau, J.W. Work Without Jobs, The MIT Press, 2023