Episode Transcript
[00:00:00] Hey, everyone.
[00:00:02] Today I wanted to make a video about a really big, important business critical topic that I think needs to be discussed. And I call it taking a pragmatic and business approach to becoming a skills based organization. And the reason I feel like I need to do this in video is this particular topic has driven me crazy for the last two or three years because we have this enormous interest in skills based hiring, skills based internal mobility, skills based development, skills based pay, all of which are centered on HR and HR initiatives, and HR technology and HR infrastructure.
[00:00:48] But in reality, if we're not focused on the business problem, we're not going to be successful. And we're now reaching a point where we have dozens of examples of companies that have done this in a pragmatic way and hundreds of examples of companies that haven't done it in a pragmatic way that I think are going to be frustrated. So let me give you some thoughts and put this onto a video so you can watch it whenever you have time. And hopefully send me a message if you have any questions.
[00:01:19] Now to get started.
[00:01:22] This is not a new idea.
[00:01:24] I graduated from college in 1978, and my original job interviews had to do with skills. So companies have been hiring and assessing people based on skills, forever developing skills. I mean, when I worked at Exxon, I had to go through a year of training on how to be a petroleum engineer in a refinery. Very, very detailed, granular skills that have nothing to do with any other form of energy except petroleum. You all have skills based programs for sales training, customer service, IT finance, HR, like ours, et cetera. And what you find out when you use the word skills to define development of human beings is that you have to put a framework about what the word skill means. Now, in most companies, nobody really knows what the word skill means. It could be something small, it could be something big.
[00:02:15] And sometimes the word skill is a technology or a platform, and it's not a skill on how to use it, it's the name of the platform. So it's a very problematic word. But given that it is a big amorphous space with a lot of data providers providing skills data, and a lot of AI providers inferring skills data, let's just assume that we're going to use the word skills. Even though I really like to use the word capabilities, because a capability is something that a business person understands, a capability on how to handle objections, or how to persuade a client to adopt a higher price product when they're looking at the lower price product. That's a capability that requires a bunch of skills, but I won't get into all that for now.
[00:03:03] Now, in the early days of discussing this, I believe the way the concept of skills became popular was in the learning space when companies like Pathgather, degreed and edcast created skills based learning search tools in their LXPs. And I very distinctly remember going to a bank in Pittsburgh and talking to the head of L D there, and she was a new user of degreed and very excited about it. And she said, we know all the skills that our company needs because we can just go into degreed and see what people are searching for. I mean, kind of a naive statement, but that's where we started. And I give degreed a lot of credit with promoting that idea, but it went in many, many different directions. Companies like Eightfold and Beamery built skills based recruiting systems. Companies like Gloat and fuel 50 built skills based talent mobility systems. Workday introduced the skills cloud, which really has nothing to do with skills. It was really just a data cloud collecting data from different parts of the workday system, which they're now turning into really a skills based platform. Vendors like techwolf came along and said, let's build a skills infrastructure layer cornerstone, which then acquired Edcast, started to build a skills fabric, and there's now skills in VNom isims. All of the recruiting tools have skills technology.
[00:04:31] Microsoft announced skills in Viva. And most of these systems are generic tagging systems, sometimes inferred by AI, where a bunch of words are associated with your name. Like, I can go into LinkedIn, and a lot of people have tagged me with different skills. I kind of know what my skills are, and other people think they know what my skills are. And so this little skills cloud is created, and that allows LinkedIn to recommend things to me, it allows me to find things that are relevant to my needs and so forth. So it's actually got a lot of goodness to it. And as the AI gets better and the level of inference gets more sophisticated, we'll have more complex understanding of what people's skills are. The newest of these is the hydric Navigator, which is an AI based skills platform for leadership development and technical and professional skills relative to leadership, which is obviously a flavor of skills that everybody cares about. So I'm not questioning at all this long term strategy of building skills infrastructure and using skills for all of these things, because this reduces bias, because without a skills based platform of some kind, we're relying on our own human judgment. Well, this person, I like them over the phone they worked for this person. They worked for this company. They worked on this project. So let's assume they have these kinds of skills, because you usually can't give somebody a test before you hire them or relocate them into a new role. And then there's this whole other category of skills where you do have to regulate and comply and validate the skills. If you're a nurse, I don't want you poking in my arm unless you know how to do it. If you're a doctor, if you're a repairman, if you're an oil drilling supervisor, if you work in an oil refinery like I did, I don't want people tuning the hydrocracker that haven't been trained on how the hydrocracker works. And you have those in your company, too.
[00:06:34] And you get to decide in many cases what is regulated and compliance oriented and what isn't is making a great cappuccino at Starbucks a compliance regulated certification process. It's up to them. I mean, maybe it is, maybe it isn't. I don't know. I wouldn't be surprised if it is, but maybe not deciding where to put the almond milk and how to keep it cool. So you get my point that we have these highly regulated, mandated, skills based programs, and then we have everything else. Now, given the complexity of this, it's even more complex than you think, because in any domain in it, in bioengineering, in sales, in marketing, in HR, there are hundreds and hundreds and hundreds of skills, thousands. And they're always changing. The company lightcast that does one of the largest providers of skills data, and they're out there scraping data and looking at resumes, or rather job postings, constantly has an API, and you can look at their skills taxonomy, and you can see every day skills that are changing. And the way they determine that skills are changing is by looking at the job postings people are putting on their company websites and what they're asking for. And that's a pretty good way to pick up the interest that people have in different skills. By the way, it's not really the only way, and it's not enough. If you're a scientist working at GSK or another pharmaceutical company, you want to know what's coming out of the R D departments of other companies. You want to know what's coming out of academia. You want to read technical publications, you want to know new science that's being invented that isn't in a job description yet. It's just out there.
[00:08:21] And by the way, if you're in the it domain. You want to know what products were released, what's hot right now, what technologies are hot, what platforms are hot. That stuff is essentially a new skill that you have to be aware of. Algorithms are new skills. Soft skills don't change that much, but the names of them change, like growth mindset didn't exist 1520 years ago, so things like that keep changing. So this is different from competencies in the sense that it's always changing. There's many granularities to it, and it has sometimes very important utility in the compliance area and important utility in everything else, but at various levels of priority. So let me get into the pragmatic part of this. So we're sitting around in HR and we're looking at vendors and we're having discussions about how we're going to assess skills and how we're going to tag them. We're going to have people tag them in all these platforms, and we're going to aggregate this into some database, and then all these magical things are going to happen.
[00:09:20] Well, that is a boil the ocean type of project.
[00:09:26] While it certainly makes sense in the long run, and I mean maybe very long run, given the dynamics of this space and the rapid change in the skills themselves, you're going to be much more successful with your infrastructure project if you focus on the problem. Now, you've heard me talk about falling in love with the problem before, but let me explain what I'm talking about when we talk about systemic HR. Building a skills infrastructure is falling in love with the solution, not falling in love with the problem. Why are you building a skills infrastructure? And don't just say, for recruiting, what is the very particular problem you're trying to solve? If you're United Airlines and you're about to get shut down by the FAA because you've had a bunch of maintenance problems, there are 11,000 people of that company, and that company has hundreds of thousands of people who do maintenance. That is a very important problem that they need to address. What skills do these people have? How do we figure out those skills? Right now they're working with Techwell, for example, to identify the specific skills and those 11,000 maintenance people through their maintenance records, through their maintenance histories, through their performance management, not just by going out on the Internet and scraping a bunch of job descriptions or postings. And that is a business critical issue for United, and it's going to allow them to determine what skills are missing, put people into the right situations to do the right work. Look at the trending of skills and build what we call a capability academy. When we started talking about capability academies three or four years ago, the whole idea of this was that your capabilities aren't the same as everybody else's. Coca Cola's capabilities. Coca Cola has a series of capability councils that they've built that are around Coca Cola's capabilities. They're not the same as the capabilities at Procter Gamble. They're probably not the same as they are at Pepsi either.
[00:11:26] So depending on where you are in your company's cycle of business problems, you focus on the one that matters. So another great example is we spent a lot of time with Chevron over the years. Chevron's got all sorts of things to think about, right? How to run oil refineries, how to drive trucks, how to deal with retail. They have these retail apps that are really cool. I mean, all that stuff's really important stuff. Well, at the time we were working with them a year or so ago, and I think this is still going on today, they're trying to plan the future of their engineering team to deal with alternative and new sources of energy. They've got to understand what the skills are in that domain. They're not going to find that on the job market. They're going to have to go into those science and R and d areas, or maybe academia, determine those skills, figure out who has those skills. By the way, people don't have job titles that refer to those skills. So that's a very strategic initiative for them, which they're doing, and they're using a skills based platform to do it. They're using, you know, another example is GSK, or most of the pharma companies or Moderna. Moderna is obviously mRNA. Gsk doesn't use mRNA, to my knowledge. They have other technology, other biotechnologies. Bayer has no other biotechnologies. They've got to go really deep in a new clinical area, or a new drug, or a new part of the body that they're trying to improve or fix or health area. And they need to understand the skills in Alzheimer's research or in cancer research or other things. You're not going to get that out of a bunch of job descriptions. They're going to have to go find that on their own. And if they do, and they can find the source of that data and the source of people that have that data, that is a massive, massive competitive advantage for them. Do they have to assess those skills? Probably not. If they can find people that have written PhD papers on the science that they're trying to achieve. They can interview those people and get to know them pretty quickly. They don't have to go through an assessment thing. So the point I'm trying to make is that a lot of the infrastructure decisions that we make in HR, as important as they are, usually can't be completely correct unless we are focused on a problem.
[00:13:42] Because ultimately, the reason, and by the way, that white paper on the skills based organization was very theoretical. I mean, it's one of these things that I won't mention who wrote it, that sort of consulting firms write to give people a concept of why they should hire this firm to do their work, but it didn't have really a lot of specifics in it. Now we're getting down to the point in most companies where we can pinpoint some very strategic business critical issues to address. I've talked about Intel's need to build AI chips. I'm sure there's a lot of skills, technology, and discussions going on in Microsoft about AI, in Nvidia, in Netflix. All of the great companies are doing this. They do it manager by manager. They don't have HR involved in the infrastructure. But that's where we need to put our.
[00:14:33] You know, if you are not sure what the critical business priorities are, that's okay. That's a workshop. And what we do all the time, and we're doing another one at the Alicia conference, is we do workshops with companies to help them understand their most critical business issues in hiring, in development, in redeployment, in sourcing, in capability development, and it might be in leadership. And then from there, we can apply the skills, technologies and tools, methodologies and data to address that issue. And I can guarantee you that when you do this, a, you're going to get a lot of help from the business, which is what you need. B, you're going to go down the learning curve of solving this problem very quickly, and you're going to figure out some things that were not obvious.
[00:15:28] And that is the benefit of doing this, is when you get into the depth of a problem of finding scientists or determining why the Boeing manufacturing managers are not finding critical quality problems, or whatever it may be, or why we're not selling product a, but we're selling product B to this market versus that market. You're going to learn a lot. Your line leaders are going to learn a lot. Your L D team is going to learn a lot. You're going to learn about the skills, and you're going to learn about where you have to go deep and where you can go broad and where you need to certify skills and where you don't, I don't think we can make. I've had a lot of conversations with companies I remember had this last year at workday where they said, well, what should be our skills assessment strategy? And the answer is that it depends. In some cases, nothing. I mean, there's no point in doing it. In other cases, it's absolutely business critical, and you don't need to make that decision in a vacuum. You should be making that decision with the help of your cross functional team working on the initiative. By the way, one of the things that comes out of this kind of work is the benefits of systemic HR. So when we first started writing about systemic HR and talking about it, the whole idea here was that most of the talent related problems in companies are multifaceted. There's never a problem that's only because of DEI or only because of pay. There's usually other correlating factors. So let's suppose you're doing the Chevron project, or you're doing something at Disney, and you're looking for a particular skill set for a particular technology that's critical, or whatever it may be, and you're getting into the skills and you're learning about what they are and where they are and who has them, and you suddenly realize, wow, some of the things we need are in other parts of the company, we have this skill somewhere else. Well, if you have a talent intelligence platform, you can do that. You can say, wow, now that we have a really good definition of this problem, and we know what the issue is with these 11,000 maintenance people over at United. Wow, there's some people over in logistics that have some of these skills, or there's some people over. I doubt there's any people in it, but there might be, or in facilities or in other places. And we can enrich the solution beyond the traditional approach to either recruiting or development, to perhaps job mobility, perhaps team based work, perhaps redesign of the organization to facilitate the utilization of these experts. We're doing a project, a really interesting relationship with a big aerospace company in the UK, and very successful business, been around for hundreds of at least 100 years, maybe more than that. Actually, I think it's more than 100 years. They make jet engines, they make missiles, they make nuclear subs, all sorts of stuff.
[00:18:25] So they have engineering expertise, aeronautical expertise, control systems, sensors, all sorts of technologies. And the stated problem from the head of engineering is it takes us two to three years to hire a new engineer because of this deep domain of skill we have pocketed into these project groups that is very hard for people to identify. So it sounds like a knowledge management problem and they're working with us and they're working with Sana and we're doing putting together something cool on this and I think we'll be able to talk about it, or they'll be able to talk about it at our conference in May. Well, I mean, once you start looking at that, you realize actually the problem might be an.org design problem.
[00:19:09] Should these independent project groups have certain shared services to develop these important, critical, fast changing skills? Is everybody going to have to learn about drone technology in every part of the company, in every initiative? Probably not. How about noise technology on how to make things quieter? Or how about heat transfer stuff? Right? I mean, those could be in Coes. That's kind of stuff I used to do in college. Or they can be within the project groups. We could have capability councils that cross connect leaders in those areas to each other, even though they're working in project groups to teach them about the things they need and to advance the state of the art. These are the kinds of things that create a dynamic organization. And so in addition to going through projects to understand the skills that are needed at a granular level, in one of these areas you can apply the principles of design, you can look at generational diversity that might need to be addressed. I mean, I've talked about this the last couple of weeks. I think we're in the middle of the beginning of a very big change in the demographics of our workforce. We're going to have a lot more young people. These projects over there in the UK that are led by people in their fifty s, sixty s and seventy s, those people are going to retire. So there's that issue. So as you get into these pragmatic, problem oriented projects, you're going to bring the whole richness of your skills as an HR function or as an HR professional, and you're going to be not just doing a skills project, you're going to be doing systemic HR, you're going to be actually bringing other ideas in to solve the problem.
[00:20:49] So I'm not going to get into too much more detail. Now, we do a lot of this one on one. We have a lot of material in the JBA about this. We work directly with clients on these projects. As far as the vendors, I love them all, but most of them don't think this way. Some do. They really want to sell their product so they do a good job of giving you case studies, how other companies are using it. But I think you as an HR professional or an IT professional, need to have a more consultative approach. And as you do RFPs and apply to vendors, make sure you're very clear on the specific use cases you're going after. The benefit of that is you'll have business counterparts helping you. You'll have an ROI clearly established. You're not going to have to go back and cost justify why people are not using this beautiful skills thing that you just bought. You'll be able to tweak and sort of rough down the edges, sand down the edges of the solution to figure out what features you really need and what features you don't need. And basically you'd just be adding more value to your company. And once we do one of these projects, the next one is much easier and the next one is much easier and so forth. Anyway, we're here to help you with this. We're going to be doing more workshops. We have lots of information in the membership and in Galileo about these different initiatives and how to do this. It also begs the question of your own education and keeping up on this. But I wanted to just make this video to just kind of make this clear and answer any questions that people have. And please reach out to me or to anybody in our company if you'd like to discuss your situation more. Thank you.
