I recently had the pleasure of chatting with an incredibly esteemed group of guest speakers for North Highland's latest webinar focused on the most important employee competencies organizations must have in order to be Made for Change.
In our latest perspective, “Building Transformation Capability Through the Right Competencies,” we define competencies as a grouping of related knowledge, traits, skills, and abilities that give rise to the behaviors needed to perform in a given role. Strengthening your employees’ competencies will not only help your organization survive times of turmoil and uncertainty but will also power its overall change and transformation capability.
In our chat, myself, guest speakers Chris Gilchrist from Forrester, Pauline Miller from Dentsu International, and Peter Gibbons of 3M all agreed that at the end of the day, a focus on people is what makes this thinking successful – after all, we are talking about human competencies. As Pauline so eloquently put it, “Humans are the golden thread that runs through it all.”
Read more from the discussion below highlighting the speakers’ personal experiences developing the right employee competencies, from data, to DEI, and common missteps many companies continue to make in these spaces today.
Competencies and culture
We know employees have the ability to do a great job with the competencies they are taught, but if you want to maximize the value and impact of these competencies, it’s important employees feel they fit with your company’s culture.
I couldn’t agree more with Pauline when she said, “If people don’t believe in the vision, they won’t stay. People are key to continuing to drive a business forward with new ideas as well as basic principles. People are the “constant” between every industry and new talent are looking at companies’ values, culture, and how they react to issues. They connect personal values with the company values and don’t want to work for a company where their values don’t align.”
Ultimately, culture and competencies are part of one connected system, and leaders should approach them with a comprehensive perspective. The binding thread? Behaviors. Competencies give rise to employee behaviors—and those behaviors help to shape the organization’s culture.
Often, culture is left on the sidelines in favor of more measurable business imperatives. But just like competencies, culture is an appreciable asset in made-for-change organizations. It’s important to note here that culture—also like competencies—must evolve.
To manage the culture-competency system effectively, start by evaluating employee behaviors. Do they harden (or hinder) the culture you want to instill? For instance, if you’re pursuing a continuous-improvement culture, do employees exhibit informed risk-taking behaviors? If not, invest in competencies, such as learning agility, knowledge-sharing and more, that promote risk-taking and experimentation. Over time, those behaviors will help to develop the continuous-improvement culture you seek.
Value-capture versus value-conversion
In the industrial age, it was all about creating value out of efficiency. In the recent IT age, it was more of a value-capture model. Now, in an age of constant change, we’re moving to value conversion, where, as we heard from Chris Gilchrist, “Companies are trying to close the gap between the act of operating and act of innovating, and they must view these acts as mutually reinforcing versus mutually exclusive.”
As further context, as Chris discussed on the webinar, Forrester’s 2022 Research, co-authored by Chris himself, explains that a business model is a market growth architecture that delivers value through capture, creation, and conversion techniques. Value capture is a technique to generate growth by extending current markets. Value creation is a technique to generate growth by expanding new and larger markets. Value conversion is a technique to generate growth by transitioning from one technique to the other (i.e., capture to creation or creation to capture).
Businesses with the right competencies, such as digital dexterity and learning agility, will be able to flex seamlessly between these value cycles—value capture and value creation—with the same workforce. With these competencies, employees can apply knowledge and learnings to improve continuously as the business moves from value capture to creation, back to capture, and so on.
Change versus governance
As change continues to be a constant, we must be mindful of governance, or process. And as Chris put it, this idea is quite the paradox. Process implies rigidity; If you're aiming for competencies of flexibility and adaptability, how can processes enable that?
Most leaders approach change from the inside out, starting with process and structure or process driving competency. In reality, we need to flip this idea and take an outside-in view, where competency drives process and structure change.
Peter also shared that, “Leaders should allow competencies to absorb more and think about the possibility of what new processes can be. New behavior will adapt as new knowledge and data are brought forth, so ultimately you can use competencies and behavior (i.e., people) as a point of lift to imagine what a future structure could be.”
Skills have always been built around processes, and so, in this new age, we need to reverse engineer these ideas to ensure competencies are the driving factor, rather than processes.
Data’s role in competency development
While we know data-driven insights can make a huge impact on a business, as we heard from Peter, “Too often do we use data to measure people, but data doesn’t give context into the ‘why’ things are improving or declining. So, ultimately, data is not helping people know what to do.
“It’s a challenge. There is so much data that we’re trying to measure and track, but we’re not using it to drive curiosity or create a window of opportunity for someone to say ‘wow, this is how we can get better, sell more, or create more value.”
Chris also added that “Data is powerful because it can be a point of empowerment versus a point of control. Too often companies have the false reaction to organize their workforce around technology to get most out of it, such as by simply moving everything to the cloud.
“However, allowing technology to be a mechanism to get the most out of employees is far more beneficial because it helps people get better. Technology should be used to complement a person’s skills instead of being used to ultimately replace the person. This is a natural shift leaders have to start embracing. Leaders should think ‘How much can technology get out of people?’, not ‘How much can people get out of technology?’”.
ESG and the power of the “diversity” competency
2020 saw many commitments from organizations across every industry to drive social and environmental change. However, more recently, as a potential recession looms (or is already upon us, depending on who you ask), we’re unfortunately seeing many companies use this as an excuse to pull back on their previous commitments. So, how do we effectively build ESG competencies into a workforce?
Diversity continues to play a champion role here. As Peter shared, “Diversity powers solutions since it takes all types of people to move a company forward and through challenges.”
Pauline added that “Many companies make the mistake of bringing in one person as a DEI leader and expecting them to change the company. Additionally, we know that many issues are too complicated for folks to understand fully. But if you tie ESG measurement to compensation, this act will drive people to gain a better understanding of how they can make important changes in these spaces.”
A made-for-change organization’s greatest superpower
During closing thoughts, our speakers left us with their opinions on the one “superpower” (or competency) the workforce of the future should have. Here’s what we heard from each:
- Peter shared that “An organization’s superpower is actually the leaders who people believe people are the solution, or the way forward.”
- For Pauline, it’s all about storytelling. “Leaders should be able to share stories. Whether the stories are about where the organization is heading or about connecting the dots between an individual’s role and the company strategy, stories drive authenticity.”
- Chris noted that, “Organizations should look for people to connect the existing dots versus generating more. Find people with an appetite to learn. Train in curiosity to constantly challenge what you know in pursuit of something better for the company.”
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Alex Bombeck