Companies need to reassess the way they organize themselves, and some are already doing so. While many organizations still place a strong emphasis on straight-jacket-type job definitions, there is growing pressure to shift toward a system that prioritizes skills and fluidity. This pressure is being driven by a range of factors, including changes in the economy, technology, and society. By understanding the reasons behind this shift, decision-makers in companies can see why it is crucial to start making this shift to a skill-centric organization, starting with defining exactly what that means and looks like for them.
Industrial Revolution to Information Age: In the past, jobs were organized in a way that divided work into small, repetitive tasks. This worked well during the Industrial Revolution, but in today’s world, where knowledge, creativity, and teamwork are more important, traditional job structures don’t work either. This is because these structures are too rigid and don’t allow for the kind of collaboration and innovation that is needed to keep up with the rapidly changing demands of the modern workplace.
Technological Advancements: The way we work has changed a lot because of advances in technology. We now have things like artificial intelligence, data analytics, and digital communication tools that help us do more than ever before. This means that companies need to be more flexible in how they allow the work to evolve and focus on developing skills in their employees to keep up with the changes.
Globalization and Competitive Dynamics: With the rise in global competition and the increasing need for innovation, organizations are seeking new and more flexible ways of working. One such model is this shift from jobs to skills, which helps organizations stay competitive and agile by aligning their employees’ skills with their overall objectives. By doing this, companies can quickly adapt to changes in the market and maintain their edge in the face of fierce competition.
Changing Workforce Expectations: As the world evolves, people’s expectations from their jobs are also changing. Organizations need to give their employees more freedom in how they do the work, supported by relevant and rich opportunities to learn and grow. Increasingly, instead of sticking to strict job descriptions, companies will need to focus more on strategically important projects with clear deliverables and outcomes, offering employees the opportunity to deliver value while also building their competency profiles. This approach not only gives employees more autonomy but also helps organizations achieve better results.
Continued Growth of the Gig Economy: The gig economy provides a sneak peek of what this could look like at scale. It has brought about a new way of working where people take on freelance, contract, and temporary jobs based on their skills and the outcomes they can deliver. Taking a cue from this, some companies are already using a similar approach to have internal ‘gigs’ run parallel to traditional jobs, allowing these companies to discover people’s talent beyond the artificial limits imposed by job titles and job descriptions. These models focus on leveraging the skills of people across a wide range of projects and tasks, making it easier to find the right talent for each job.
What is a skills-centric organization?
I like to see this simply as a model that prioritizes results and deliverables over labels and activities. Emphasizing deliverables and results automatically emphasizes skills and knowledge. While this is not a new idea at all, it is not easy to implement it correctly or consistently hence the continuing pursuit of ways to “fix the job”. When I say correctly, I mean ensuring jobs are defined by results and deliverables, not titles and activities; when I say consistently, I mean applying the same design principles to all jobs, from the most senior levels of organizational leadership jobs to the most junior levels of individual contributor jobs.
So, in a way, a skills-centric shift is simply fixing what’s broken with the way we have implemented what we are calling job-centric. Let me explain what I mean by trying to first summarise the differences between these two approaches and then maybe go a little deeper into how it is not what we do that needs to change but how we are doing it.
In job-centric models, the organization is structured around specific job roles and there’s a defined hierarchy with a clear path of reporting. The primary focus is on fulfilling the responsibilities associated with those specific job roles. Recruitment, training, and performance evaluation are all tied to these predefined roles.
On the other hand, in a skills-centric model, organizations are structured around the skills and competencies of individual employees rather than rigid job titles or descriptions. This model promotes a culture of continuous learning and development, where employees are encouraged to acquire and hone a diverse range of skills. The organizational hierarchy tends to be flatter and less rigid, promoting a collaborative environment where knowledge sharing is encouraged and innovation can thrive. In this model, resource allocation, task assignment, and performance management are all centered around the needs of work defined through projects and the skills and competencies of the workforce, allowing for a more dynamic and adaptable organizational structure that can quickly respond to changing market conditions and business needs.
Benefits of Shifting to a Skills-Centric Model
Effect on Organizational Performance, Innovation, and Inclusivity
The transition to a skills-centric model can have real implications for organizational performance, innovation, and inclusivity. By realigning organizational structures and processes around skills rather than fixed job roles, a skills-centric model can unlock a myriad of benefits that can significantly enhance the competitive positioning and cultural dynamics of organizations.
Enhanced Agility: The agile deployment of skills in response to evolving organizational needs and market dynamics significantly enhances organizational agility, enabling a more rapid and effective response to opportunities and challenges.
Optimizing the Deployment of Talent: By matching skills with organizational tasks and projects more precisely, the organization can optimize talent utilization, potentially leading to improved productivity and operational efficiency.
Cross-Functional Collaboration: The fluidity of roles offered by a skills-centric model fosters cross-functional collaboration, creating a conducive environment for idea exchange, problem-solving, and innovation.
Diverse Skill Application: Encouraging individuals to apply their diverse skills in varying contexts can lead to novel solutions and enhanced problem-solving capabilities, driving innovation and competitive advantage.
Valuing Diverse Skills: Skill-centricity places a premium on the diverse range of skills individuals bring to the organization, fostering a more inclusive environment where different skills and perspectives are valued and leveraged.
Reducing Bias: By focusing on skills rather than traditional job titles or hierarchical positions, organizations can help reduce biases associated with recruitment, promotion, and talent management processes, promoting a more equitable and inclusive organizational culture.
Integration of Underrepresented Groups
Skills-based models can facilitate the integration of underrepresented or marginalized groups within the workforce by prioritizing skills and capabilities over other potentially biased criteria.
Employee Engagement and Satisfaction
A work environment that values and leverages the unique skills and contributions of individuals can significantly enhance employee engagement and satisfaction, promoting a positive organizational culture and reducing turnover rates.
By prioritizing skills over traditional job titles, organizations can create a more dynamic, inclusive, and innovative work environment, thereby positioning themselves for sustained success in the contemporary business landscape.
How do you operationalize the shift to a skills-centric organization?
Developing Systems that Encourage and Enable Skill-Centricity
The shift to a skills-centric organization often hinges on nuanced alterations rather than monumental changes. Drawing a parallel, the inconspicuous mosquito often poses a greater threat than the conspicuous lion. The initial step is redefining how ‘jobs’ or ‘work’ are portrayed and communicated within the organization to the employees. Recalling a project from nearly two decades ago, an attempt to pivot frontline training from a lecture-heavy to a hands-on, practical engagement used the simple act of removing PowerPoint presentations as one of the ways to effect a shift in focus to interactive activities and discussions. Here we could start by exploring the impact of the simple act of removing job titles!
In this article, I am advocating this nuanced approach based on the idea that ‘the same actions performed differently can achieve very different results’. In this case, the same actions are some of the things we do that create the job-centric culture and reality, if we change how we do them, they can create a skills-centric culture and reality.
Establishing a Common Skills Language — How could we do our “competency or capability frameworks differently”?:
Standardization: Develop a standardized skills taxonomy that categorizes and defines various skills and competencies required across the organization and provides a way for everyone to easily talk about skills when talking about the work to be done. This taxonomy is one of the most important enablers of success. Clearly, this is not your traditional competency or capability framework, it is a ‘language of skills’ that has the power to shape how people think about and make sense of the work they do.
Accessibility: Make this common skills language accessible to all employees through internal platforms, ensuring that everyone can speak the language and, through it, has a clear understanding of the skills and competencies recognized within the organization.
Training: Offer training sessions to employees and managers on how to utilize and understand this common skills language, ensuring consistency in its application across different organizational levels and functions.
Integration: Integrate the common skills language into various organizational processes such as recruitment, performance evaluation, and learning and development, ensuring a cohesive approach towards skills-centric operationalization.
Articulating Job Expectations — how could we do our job descriptions (JDs and Job Ads) differently?:
Role Presentation & Responsive updating: Transition from conventional job-centric advertisements to skill-centric portrayals and keep job role descriptions updated to reflect the changing market or organizational strategy. Some high-level examples of role presentations below:
Original: “Seeking a customer service representative to handle customer inquiries and complaints.”
Updated: “Seeking an individual adept at digital communication, problem-solving, and maintaining positive customer relationships in a rapidly evolving digital customer interface environment.”
Original: “Looking for a marketing manager to lead marketing campaigns.”
Updated: “Looking for an individual with proficiency in digital marketing strategies, data analysis, and SEO/SEM campaigns, adaptable to the dynamic digital marketing landscape.”
Senior Executive-Level Position:
Original: “Seeking a Chief Information Officer to oversee the organization’s technology strategy.”
Updated: “Seeking an individual with expertise in leading digital transformation initiatives, cybersecurity risk management, and aligning technology strategies with evolving market trends and organizational goals.”
Continuous Alignment: Establish dialogue mechanisms, like digital platforms, where employees can discuss, review, and align on the evolving expectations of various roles and competency profiles based on the changing external context and dynamic skills required.
Consistent Communication: Ensure both initial and ongoing communications utilize the ‘new language of skills’ and focus on the value of diversified skills over rigid job titles. This could be reflected in internal communications, training programs, and performance evaluations.
Responsive Updating: Update job role descriptions to reflect the changing market or organizational strategy. For instance, as part of well-defined projects that are driving digital transformation, highlighting digital literacy as a key skill needed for assignable project results and deliverables.
Role Visibility: Create a digital platform where employees can view all roles within the organization, the skills required for each role, and the overlap of skills across different roles, promoting an understanding of skill demand and potential career pathways.
Clarity Across Levels: Ensure clear communication of skill expectations even in senior or less technical roles where job descriptions tend to be vague. For example, specify the types of decision-making or strategic planning skills required.
Evaluating CVs/Resumes — how could we do CVs/Resumes differently?:
Skill-Focused Assessment: Look for demonstrable skills in resumes, such as project management or conflict resolution, rather than merely years of experience in a particular position.
Automated Competency Profiling: Utilize technology to create dynamic competency profiles that update as employees acquire new skills through various projects and endorsement by the owners of the problem(s) solved, facilitating a real-time reflection of employees’ evolving skill sets. This means the projects themselves, along with the specific results and deliverables assigned to roles, have a skill profile that enables the automated update.
Redefining Learning & Development (L&D) — how could we do L&D differently?:
Proficiency and Mastery: Align L&D programs to emphasize achieving mastery in practical skills through hands-on projects, real-world problem-solving exercises, and applied learning rather than merely attending training programs and passing training assessments.
Reflective Practice: As a way to continuously and dynamically hone their skills, encourage employees to engage in reflective practices leveraging peer conversations, mentorship, or actively soliciting feedback, especially at the pivotal points before, during, and after working on specific projects.
Instituting Transparent Skill-Matching — how could we do internal mobility and job boards differently?:
Skills-Centric Work Requirements: Adopt a skills-centric approach in communicating work requirements using the same role presentation approach, for example, by articulating projects in terms of the skills required rather than the job titles traditionally associated with the tasks.
Internal Skill-Matching: Create an internal platform where employees can offer their skills for various projects, thereby fostering a culture of adaptability and continuous skill development. For instance, replacing or enhancing an internal job board with an internal gig marketplace where employees can view and opt into projects aligning with their skill sets.
Seeing the Organizational in a Skill-Centric Way
At the organizational level, the structure of the organization needs to also be viewed in a skills-centric way. The alignment of skills to organization strategy becomes one and the same thing rather than two separate activities. I’ll illustrate.
Industry & Industry segment
By being in a specific industry and segment, an organization already operates within a domain of knowledge and skills. The skills-centric relevance here is related to industry domain knowledge, customer needs (problems to be solved), types of solutions offered, and company strategy — what customers, what problems, what solutions at what price point.
By creating a specific type of department, an organization identifies and prioritizes specific types of deliverables and results that directly indicate specific domains of knowledge and skills. The skills-centric relevance here is related to the types of departments.
Business — achieve organization’s sustainable revenue goals — what customer, what problems, and what solutions well enough to achieve business goals, for example, various business lines in an organization.
Support — achieve organization’s profitability goals in a way that can be sustained — value, revenue, cost, and risk management, for example, human resources, finance, technology
Control — achieve organization’s risk profile and related costs — identify, mitigate, and control risks in business, support and control activities, for example, enterprise risk management, internal audit, legal and compliance, etc.
By creating specific job families within specific departments, organizations indicate the strategic importance of the specific deliverables and results within that department, for example, talent acquisition or L&D in Human Resources or Sales and Relationship Management in the Business Lines, etc.
Defining the jobs/work to be done beyond this point should be less about the results and deliverables because anyone operating in that job family should be involved in achieving the job family results and delivering the deliverables, and their role will only differ in what specific aspects of the deliverables they are delivering and the results associated with that aspect. These specifics will be determined by their proficiency and mastery, which indicate if they can be trusted with the accountability for those results and responsibility for the related deliverables. This is the first level of fluidity in that everyone operating in that job family contributes based on their skills, not a fixed and rigidly defined job role.
The next level of fluidity is that the idea of a “job” is constructed by combining various results and deliverables into what is expected of a single person at any point in time. What this means is that the job families become a building block, where a single person could be contributing L&D solutions along with Sales and Relationship Management solutions for a specific business line department problem; or Content Design solutions along with Business Continuity solutions for specific technology department problems.
This idea of a solution to a problem is key! The solution is what the person brings to the table, and the problem is the context that makes what they bring a solution. You need both. So the industry and the department are key because they offer context, and the job family is key because it offers solutions.
When an organization chooses to operate in a specific industry, that industry defines the problems that need to be solved. This, in turn, determines the knowledge and skills that the organization needs to possess in order to be competitive and successful. If the organization is successful, it means that at least one business line department has been established and that department has effectively delivered the required deliverables to achieve specific results. Even if the work has been accomplished by a single person or a few individuals, it means that a set of work results and deliverables have been achieved.
As the organization grows, these work results and deliverables become more explicit and distinct, often leading to the identification of job families and the creation of departments to house them. However, the work and identity of these job families should remain focused on offering effective solutions to business problems. As an employee of the organization, you should always know and be intentionally contributing to the results and deliverables of one or more job families that provide solutions for revenue generation (which often fall under business departments) or ensure sustainable profitability (which often fall under control or support departments).
If you think about it, when it was just one or a few people doing all the work drawn from across strategically important job families (i.e., the ones critical to success at that time and scale), it was all about being able to achieve specific results by delivering specific deliverables at high enough quality which made it 100% human. As the organization scales and more people are involved in ‘designing’ the work, we need to try really hard to retain 100% humanness in the work designed, which means ensuring the designed work follows the model of skill-centricity defined and adopted by the organization and the operationalization principles established.
Clearly, the shift to skills-centric models is not a tactical one, it’s not an agenda or initiative; it’s a fundamental shift in the organization’s dominant perception of humans at work as reflected in how it defines and pursues results and goals. None of this is new, though; it is simply going “back-to-basics” where the basics just happen to look different depending on the prevailing economic, societal, and technological context.
In simple terms, we simply need to keep jobs human, and they will automatically be skills-centric!
I’ll leave you with this, the greatest threat or obstacle to operationalizing a skills-centric model, which is also the most powerful enabler, is understanding how to apply the skills-centric model to non-individual contributor roles from supervisor to organizational leader, especially the top levels (see graphic below). If we can crack this, we’ll crack the shift to skills-centric models and access the fullness of the benefits that come from successfully shifting. I say this because these are the roles that “design” the work and the roles that are most challenging when applying a skill-centric model.
Companies are starting to realize that they need to change the way they organize their employees. Instead of focusing on specific job titles, they are shifting towards a skills-based approach. This means that employees are valued for their particular skills rather than just their job titles. There is growing interest in this new way of organizing companies, often referred to as Skills-Based Organizations (SBOs). The interest and the change represent a significant acknowledgment of the many different skills that workers have today and the need for companies to adapt their structures and procedures to match these skills. It’s all about making sure that the workforce and the way companies operate are a good fit for each other in today’s fast-paced world.
The purpose of this article was to provide a starting point and a roadmap of sorts for organizations contemplating the transition to a skills-based model.
If you’d like to have a conversation about this or anything else of mine you’ve seen or read that triggered your interest, please use the link below to find a time that works for you for us to have a conversation. I am looking forward to it.
This article incorporates text generated with the assistance of GPT, an advanced language model developed by OpenAI.