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Reskilling for a Volatile World

June 30, 2020 | FEE Content, FEE Posts

 

by Bob Leonard and David Ross

 

“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” – Alvin Toffler, futurist

 

This is the first in a series of articles concerning the needs to reskill to meet the challenges of a VUCA world and our imminent climate crisis. In subsequent articles we will dive deeper into reskilling for the effects and opportunities of climate change, reskilling for digital transformation, and reskilling for the evolved style of leadership required.

 

Our current business environment is volatile, uncertain, complex and ambiguous (VUCA). There is a need for an iterative, evolving corporate strategy that is agile and adaptable. The mother of all crises… our climate crisis, is literally on our doorstep. It guarantees a VUCA environment for the foreseeable future. That constitutes unprecedented challenges and unprecedented opportunities.

 

 

To manage teams in the VUCA age, you should be aware of the changes that this kind of environment can cause.

 

A VUCA environment can:

 

  • Destabilize people and make them anxious
  • Sap their motivation
  • Thwart their career moves
  • Make constant reskilling and upskilling a necessity
  • Require significant amounts of time and effort
  • Increase the opportunities for people to make poor decisions
  • Paralyze decision-making processes
  • Jeopardize long-term projects, developments and innovations
  • Overwhelm individuals and organizations
  • Take a toll on internal culture

 

The traditional strategic planning process is no longer viable. Leaders need to create organizations that are agile, innovative, adaptable and people-centric. Today’s dynamic, ever changing business environment needs a different style of leadership.

 

“We need leaders who are emotionally intelligent, and able to model and champion cooperative working. They’ll coach, rather than command; they’ll be driven by empathy, not ego.” – World Economic Forum Chairman, Klaus Schwab

 

Current Leadership Challenges

 

As disruptions accelerate, major challenges include:

 

  1. New technologies (e.g. 3D printing, AI, data analytics, robotics, etc.) are rapidly redefining some jobs, eliminating others and creating new ones… resulting in a major need to reskill and upskill workforces.
  2. Legislation in most countries has not yet caught up to dealing with the risks inherent in our climate crisis. These legislative changes are inevitable and should be anticipated and planned for.
  3. Widespread awareness of social injustice is causing close scrutiny of breaches in ethical boundaries and trust, impacting corporate governance and regulations.
  4. The current skill sets of leaders, resistance to change and mindset issues are slowing organizations, making them vulnerable to disruptive forces. The role of the CEO is to participate in the development of strategy with a focus on new business models, customer value enhancement and differentiation… and to successfully sell those strategies to stakeholders.
  5. Due to the rapid changes in both internal and external environments, company culture will change. If left to chance, it will likely devolve as the jobs of many change or are eliminated. Broadly held beliefs and assumptions that drive culture will require cultivation… a deliberate design of the desired culture.

 

Before organizations consider reskilling staff, it is important to inventory current skill sets and determine if existing skills are the right “fit” for external and internal environments. 

 

Traditionally, when organizations examined their external environment, they focused only on opportunities and challenges in relation to their market and industry. They determined the gaps in the market where they could provide new services and products, and then considered what skills and capabilities they would need to fill those gaps.

 

Filling market gaps is no longer enough. That approach was appropriate when the environment could be viewed as a mechanism that we had mastery over (though that was never truly the case). In a VUCA world, where we are grappling with extreme weather, constraints to freshwater availability, supply chain disruptions and more, external issues are no longer as simple. These issues have profound impacts on organizational reputation and trust as well as the long-term viability of companies.

 

Consequently, a more holistic view of the external environment should be considered with respect to determining desired skills. It is time to replace traditional methods that tend to support the status quo. Seasoned executives are more inclined to make incremental changes rather than radical steps that reflect the need for new market offerings and internal processes.  

 

There are significant challenges for organizations, creating real risks, but there are also opportunities. During COVID-19 several manufacturing companies worldwide have thrived because they pivoted and produced face masks or ventilators. Likewise, there are opportunities for organizations to reskill staff in preparation for what lies ahead. Opportunities exist to retrain staff for the challenges of our climate crisis… climate risk management and adaptation are two crucial areas for long-term viability. Climate mitigation via a shrinking of an organization’s carbon footprint, and the creation of products and services designed to minimize or drawdown emissions, have huge ROI potential.

 

The consideration of “fit” also needs to factor in internal issues, specifically the organization’s vision and strategy. What skills will be required to deliver the strategy? And of note, what skills may play a part in protecting a company’s competitive advantage? That is crucial.

 

One way to evaluate new skills required is Barney’s VRIO Framework. Though the Framework covers non-human capabilities as well, organizations can consider what skills they need through exploring four questions:

 

  • What skills will be viewed as valuable to customers and other stakeholders? 
  • What skills are rare or difficult to obtain within the industry?
  • What skills are inimitable / difficult to copy?
  • Can the organization successfully deliver those skills? Is their use embedded in a culture, for example, that is appropriate for dealing with VUCA issues?

 

A final key consideration is that in a VUCA world, an organization cannot always anticipate what skills will be critical even two years out. Prior to 2020, did you view the role of cleaning crew as critical to business continuance?

 

Evolving technologies and disruptions in the business world are a constant today. Hyper connectivity, unlimited sources of information and real time communication make the world a small and connected place.

 

The Way Forward

 

Frequent monitoring and evaluation of your operating environment is required to determine if the skills necessary for leaders and middle managers today will be those required in the next few years. Emerging skill sets are scarce and the talent market is tight, making it prudent to keep people even if they don’t currently have the right skills. Indeed, it’s often cheaper to retrain current employees than find and hire new ones, as the consequences of turnover (forced or not) can be felt at the bottom line: Forrester reports that each standard deviation increase in turnover results in a 40% reduction in profit. 

 

Time is of the essence when it comes to upskilling and reskilling. Upskilling your workforce is an imperative in the coming years – to win the war for talent, maximize productivity, successfully manage climate risks and continue to innovate. Hire for emotional intelligence and creativity – then train on the specific job skills needed.

 

It’s often more cost-efficient to retrain current employees than to find new ones. Many organizations are shifting from a buy to a build mentality and they’ll need adequate technologies in place to assist employees with the upskilling and reskilling transition.

 

Training and upskilling centered around the human experience brings the potential of increased employee engagement, retention, growth and profitability. To realize lasting value, organizations must place employees at the center of the upskilling experience. That lens creates awareness around expectations employees place on them, as well as the potential roadblocks to any employee enablement efforts.

 

 

 

 

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