Talent Strategy 2021 - What are the key business questions?
Steven Forth is co-founder and managing partner at Ibbaka. See his skill profile here.
2020 was a challenging year for many of us, for our companies, our communities and personally. The combination of economic uncertainty, the need to develop new modes of working together and physical or social distancing put stress on people and systems.
But we learned from this too, and after passing through a phase of resilience, where our ability to flex and maintain operations was tested, we are moving towards a new normal.
Our experiences in 2020 reinforced what we already knew: people need to come first and that companies are, before anything else, systems of people working together. As we move into 2021, talent strategy needs to be at the center of business strategy.
At Ibbaka, we use Roger Martin’s strategic choice cascade to frame strategic choices. We have even customized it for talent and developed a free tool that you can download.
With many companies shifting from resilience to adaptation, here are the key business questions that your 2021 talent strategy should be able to answer.
What kind of workforce are we building to prepare for the future? (Winning Aspirations)
What skills will we need to differentiate ourselves from our competitors? (Where to Play)
What skills will we need to become agile and adaptive? (How to Win)
How can we use our existing skills to develop new potential? (Capabilities)
Does our current competency model support our need to adapt? (Systems)
What kind of workforce are we building to prepare for the future?
(Winning Aspirations)
Strategic planning begins with alignment on goals. Without this there is no strategy, just a tactical reaction to immediate pressures. Talent leaders need to work with other leaders in the organization to build a shared vision of the future workforce.
What role does the workforce play in building strategic differentiation?
What are the core skills that you must cultivate inside your organization?
How will you leverage the extended talent network or gig economy?
What culture will support the workforce you need for the future?
What skills will we need to differentiate ourselves from our competitors?
(Where to Play)
Successful companies build strategic differentiation. They find ways to provide value to customers (V2C) that are different than their competitors. This is true of product, service and solution companies. The path to long term prosperity is find your unique differentiation. Talent strategy must be part of this.
Look at your current skill inventory. Your skill inventory describes skills your company has, the level of expertise for each skill, the distribution of that expertise (normal, bimodal, skewed) and how those skills are being used. Classify those skills into three groups:
Differentiating - the skills that separate you from your competitors
Core (or table stakes) - the skills that companies in your industry must have
Routine - skills that are widely available and could possibly be outsourced
Many companies are not sure about their differentiating skills. But this is critical. You cannot have an effective skill strategy if you don’t know what your differentiating skills are today and what you intend them to be tomorrow.
Differentiating skills do not last forever. There is a natural migration from differentiating to core to routine. Skills that might have been differentiating in the past are now core. Artificial intelligence is an example of this. Eventually AI, or at least the current flavor of deep learning AI, will become routine.
What skills will we need to become agile and adaptive? (How to Win)
At Ibbaka, our hypothesis is that there will be a focus on adaptation in 2021. The time for resilience has passed. If you did not have resilience you likely would not have made it through 2020. But what got you through 2020 will not necessarily work in 2021.
According to our research, the skills needed for adaptation are quite different from those needed for resilience or effectiveness.
The critical skills needed for adaptation tend to be
Foundational (the skills used to build new skills)
Design (the skills needed to create new solutions)
Technical and business skills are also important, to implement the new designs and to evaluate them and build business models around them. But they play supporting roles.
Companies with strong business or technical cultures often underestimate the importance of design skills during a business cycle where adaptation comes to the fore.
How can we use our existing skills to develop new potential?
(Capabilities)
When organizations need to adapt and build new capabilities there can be a tendency to look outside and hire in new people. Sometimes this is necessary. But there are many other cases where the skills needed are already there, at least in terms of potential. There are three forms of potential skill that should be considered as part of 2021 talent strategy.
Skills that exist but are not being used, often because the organization is not aware they exist. A skill inventory that goes beyond the skills being used and investigates the full range of skills people have should be part of talent’s work.
Skills where people have the right combination of foundational and supporting skills to rapidly learn a new skill.
New skill combinations. Most innovation is driven by combining existing skills in new ways, rather than focusing on adding new skills, ask what new ways can we combine skills. This is often a faster way to adaptation then trying to bring in new skills. Quite often, the skills to be combined will be helped by different people. This is why new approaches to team building is going to be critical in 2021.
Does our current competency model support our need to adapt?
(Systems)
Competency models are an important talent management tool. They provide a lens that can be used to study the existing skills and find skill gaps and a way to introduce new capabilities into an organization. Many organizations are currently focussed on digital skills as a new set of core skills needed for success.
The problem with competency models is that if they are rigidly coded into a system and distributed in static formats they can prevent adaptation rather than enabling it.
There is an old joke about ERP (Enterprise Resource Planning Systems. “Your ERP takes your existing business processes and pours concrete over them.”
One can say the same thing about a competency model (or job architecture) that is locked up in a static format, be that a database, an Excel document or a PDF/ “Your competency model takes your current skills and pours concrete over them.”
Competency models have to be open systems. They bring together top down, bottom up and outside in views of the skills needed for today, and into the future.
Want to have a conversation about your 2021 talent strategy? Reach out to us at info@ibbaka.com.