Transforming into a skills-powered organization: A strategic change project 

While having the best data and technology is crucial for transitioning to a human-centric, skills-powered organization, achieving success hinges on transforming employees’ and managers’ hearts, minds and collaborative dynamics. 

One often-overlooked key to successful transformation is the change management required to orchestrate a comprehensive shift in how work is designed, how talent flows, how employees are empowered to grow and how leaders actively support the movement of talent. These are the differentiating factors between merely deploying technology and embarking on a transformative journey toward becoming a skills-powered company. Consider these recent experiences:

• A life sciences company initiated a technology deployment effort, but after four years, only 50% of its workforce had the necessary skills profile.
• A financial services company spent three years trying to implement a skills-powered organization within its IT function, hampered by inadequate change management support.
• A consumer goods company faced a nine-month delay in its technology implementation due to a lack of alignment between HR and the business regarding new ways of working.

What can we learn from these experiences? The key takeaway is that transitioning to a skills-powered organization demands a well-planned strategic change project as its foundation for success.

Accelerating skills-powered transformation starts with a mindset shift that considers the voice of the employee and focuses on building frictionless experiences before implementing technology solutions. Every aspect of the transformation must be aligned with the overall purpose to ensure it delivers value and keeps the employee experience at the center.

Whether you’re at the initial stages or several years into your transformation journey, a common stumbling block is a lack of alignment between the business and HR. Transitioning to a skills-powered organization isn’t just an HR, talent acquisition, performance management, or learning project — it’s a comprehensive business endeavor. This means embedding a skills narrative into every conversation, from career pathing and performance reviews to scoping projects. The focus shifts from tasks and work to the skills needed to achieve desired outcomes. In essence, skills become the fundamental language of work and individuals.

Equally critical to achieving success is gaining the commitment of business leaders to align talent flow with the organization’s highest priorities. This entails embracing change, such as allowing employees to dedicate one day a week to working on different aspects of the company, even if it doesn't directly contribute to business leader objectives. Although this may not deliver immediate results for the business leader, it greatly benefits employees who seek to learn and activate new skills through diverse experiences.

The reverse is also true; for example, business units may have unmet needs that existing resources cannot fulfill. Talent can seamlessly flow from one part of the company to another, eliminating the need for expensive freelancers and contractors. However, a fundamental mindset change is necessary to make this shift successful. It involves reevaluating the significance of upskilling and reskilling employees and understanding the impact of these initiatives on their career trajectories.

The optimal starting point is identifying business experiences that drive desired outcomes by creating a vision linked to your business strategy, aligning with HR and constructing a value hypothesis. Introducing a new system isn’t enough if you want people to change how they work. Demonstrating value through outcomes and quick wins is as crucial as proving the benefits for the organization.

Consider a quick-win scenario involving a workforce segment, like a blue-collar workforce facing layoffs due to insufficient upskilling/reskilling. Costs for severance, new hires and training can quickly add up, highlighting the importance of aligning skills with business needs.

Begin with a specific use case, whether it's talent acquisition, learning, gigs, etc., and create a skills-powered vision using a unified data set that supports all use cases. This enables a clear understanding of the desired change and experiential and functional requirements supported by necessary data requirements. Mapping skills to jobs can begin a reskilling journey for employees, ensuring their ongoing employability and marketability while reducing the need for significant investments in new hires.

The next step involves driving the digital HR strategy by prioritizing people. This entails establishing functional and experiential requirements that directly contribute to desired outcomes.

To achieve a successful skills-powered transformation:

• Align the vision — it serves as the foundation for successful transformation, taking precedence over technological considerations.
• Build a compelling value case to accelerate the process of securing funding and gaining buy-in from the business.
• Acknowledge that transformation is a journey to promote continuous learning and improvement.
• Lead with use cases, and adopt a human-centric design to ensure tailored solutions that meet the needs and experiences of individuals.
• Recognize that transformation is not an HR exercise. Involve the business throughout the process, and bring people on board early. 
• Recognize the link with performance and reward to help emphasize the significance of skill development.
• Shift the focus from individual technology tools to an ecosystem mindset to ensure a holistic approach to the transformation process.
• Establish a robust skills data foundation to enable its consistent future use for empowering ongoing skills-related initiatives.
• Implement effective governance mechanisms for job architecture and skills to provide proper oversight and guidance.

As you embark on this transformative journey, broaden your perspective beyond the current deployment. Consider what your future leaders will look like, and explore the distinction between leaders of work and leaders of people as part of the change narrative.

For instance, if there’s a growing need for data analytics across various functions such as HR, finance, procurement, marketing, and digital, owners of these functions might develop data analytics capabilities individually, whereas a centralized data analytics organization could serve everyone. In this scenario, a leader of people would oversee and support individuals contributing to the organization’s collective work.

Visualizing the future involves anticipating the required skills and capabilities and contemplating the organizational structure and leadership dynamics that best serve your company’s evolving needs.