HRTech Interview with Craig Friedman, author of Enterprise Skills Unlocked

Welcome to HRTech Cube, Craig. To start off, could you please share your professional journey and what inspired you to write Enterprise Skills Unlocked?
In the wake of the release of The Talent-Fueled Enterprise, we started working with clients more extensively on skills-based talent strategies. I noticed a lot of confusion in the marketplace about what skills-based talent management is and is not – a large gulf between the marketing literature available online and the reality of implementing skills-based talent solutions in practice. I started blogging about it in an attempt to demystify the topic. Over time we supplemented the blogs with a benchmarking study, a maturity model, a literature review, and hundreds of client interviews. That become the basic outline of Enterprise Skills Unlocked.

You describe skills-based talent management as a transformational strategy rather than just a trend. Why is this shift so critical for organizations today?
Skills-based Talent Management is Industry 4.0 talent management. It reflects the needs of talent management processes to respond to agile development processes, project and gig-oriented work and more autonomous organizational structures that respond to the accelerating pace of change. Companies are facing the operational challenges of keeping up with the increasing pace of technology and market changes, and the people challenges of talent scarcity in critical workforce segments. In the longer run, they are facing the operational need for greater business agility and the talent implications of so called “Future of Work” trends.  Increasingly, companies are scrambling to keep up with tech advancements, new ways of working, and fierce market competition. Gone are the days when we can park people in static jobs, hierarchies and work processes for decades. AI is far from the last change that will push organizations to reinvent themselves, it is just the latest. New methods are needed to draw talent from larger talent pools, leverage scarce skills more flexibly across the organization, develop talent far more quickly and discretely, and offer employee value propositions that are more enticing to attract and retain talent.

Fundamentally, skills-based transformations are data-driven Talent transformations. As is often the case, talent transformations tend to lag behind forward-facing operating areas, so data-driven talent transformations have only started to gain traction more recently as AI tools to manage skills data have matured. The skills-based technology market is now estimated at $1.3 billion according to Red Thread research, highlighting the growing interest and systemic investment in this area. Institutions from the White House to the World Economic Forum have reported on it and embraced it, in addition to a growing list, by our count, of at least 80 or more global corporations. Far from being a fad, if the trends of the last thirty years hold, we think Skills-based Talent is actually a foundational step in the digital transformation of Talent organizations over the next decade.

One of the core themes in your book is that skills-based transformation isn’t “one-size-fits-all.” Can you expand on how companies can tailor their journey based on their needs?
Many clients ask us where they should start their journey, and the answer is there is no universal skills-based talent journey. Skills-Based Talent is not just a single strategy but a collection of talent strategies that all revolve around the common theme of leveraging skills data to maximize the adaptability of talent in an environment where skills are both scarce and rapidly changing. This lack of a one-size-fits-all approach is actually advantageous, as it empowers you to tailor your skills-based talent journey to your unique business challenges and needs. The reality is most organizations begin their Skills-based talent journey in direct response to the business challenges they face.

If you are redesigning your work tasks due to AI-enablement or talent scarcity, then you are probably going to start your journey with skills-based work design. If you are using a talent marketplace to manage business disruption or improve staffing, then you are probably going to start with skills-based resource management. If you are facing recruitment challenges and labor market shortages, you are probably going to start with skills-based recruiting. If you need to develop new business capability to enter or quickly capture a new market opportunity, you are probably going to start with skills-based workforce planning. If you need to update or streamline your job architecture, standardize job requirements across legal jurisdictions, map similar job descriptions due to a recent merger, etc. you may start at skills-based job design.

Any of these is a fine place to start. Each starting point has its pros and cons, benefits and challenges. In fact, many of our larger clients have several of these issues going on simultaneously in various parts of the organization. And that is fine, too. It just takes a bit of governance and coordination to ensure that when these separate efforts develop, they do so with a common language and set of guardrails so they can ultimately share skills information across the enterprise.

Enterprise Skills Unlocked focuses on practical implementation. What are some of the most common roadblocks organizations face when putting a skills-based strategy into action?
One of the most common roadblocks is embarking on a skills-based talent journey without a clear strategy or plan. Building a skills taxonomy for its own sake, for example, rather than to solve a specific business problem often results in a lack of focus, unmanageable result, and unclear benefits. It is better to identify a clear operational problem in the business, which enhanced skills data can improve.

Another common roadblock, embarking on a technology implementation where system functionality leads the implementation rather than driving the project with a business strategy.  The functional requirements should start with skills linked to work tasks or decisions that talent professionals need to do their job, and only then back into the technology features required.

Governance can also be a problem. Many skills-based projects lack business sponsorship or a clear plan for aligning the skills work across the enterprise. Every group uses skills data a little differently, for different purposes. Without a clear plan, the requirements of one group may not align with the needs of the entire enterprise. Governance balances the desire for localized solutions that add immediate value, with enterprise coordination and scale.

You also highlight that these journeys don’t need to be massive to drive impact. Can you share an example where a localized, pragmatic approach still delivered meaningful business value?
I can highlight several.

Several professional services companies like Deloitte and KPMG are pursuing talent marketplaces to turbocharge their staffing by finding staff for open roles or ‘near matches’ combined with just-in-time upskilling to get their talent off the ‘bench’ and billable more quickly. That directly drives revenue capture.

During the COVID pandemic, companies like Unilever and Patagonia used talent marketplaces to redeploy talent to areas of greater demand, accelerate innovation, and reduce cycles of layoffs and rehiring. The same can be true of any business disruption caused by economic downturn, supply chain interruption, etc.

Like many companies, Rio Tinto, a global mining company, is aggressively moving to decarbonize its supply chains, transportation fleets, and manufacturing processes to adhere to global decarbonization targets. These endeavors are changing extraction and mineral processing practices which require entirely new engineering processes, at a time when geotechnical and mining skills are in decline globally. Skills-based workforce planning helped identify target skills and develop a nuanced strategy for global skills sourcing inclusive of university partnerships, government incentives, relocation packages, skills-based organization design, etc. to stretch scarce skills further.

Many hospital systems are suffering from a shortage of doctors. To save scarce doctors’ time, clinical workflows are being decomposed, and routine or transactional tasks previously performed by M.D.s are being reassigned to Physician Assistants (PAs) or Advanced Practice Nurses (APNs). This includes taking vitals, triage, intake interviews, scheduling, and managing patient records.

Many companies (heavy industry, healthcare, government, telecom) have significant capital investments in technology, maintained by an aging workforce approaching retirement. Many of these technologies are no longer taught in university programs, and in many fields, new graduates into their field are declining. Skills-based talent strategies can help capture and transfer the skills of retiring populations to new generations more quickly and effectively than previous knowledge management strategies alone.

These are just a few business cases in which skills-based talent solutions can help improve. Enterprise Skills Unlocked captures over 30 such practical applications of skills gleaned from our clients.

The book builds on the foundation of The Talent-Fueled Enterprise. How do the two books complement each other, and what makes this latest guide unique?
The Talent Fueled Enterprise challenges us to reimagine talent and unlock the potential of the workforce. Outdated talent models overlook the heart of where urgency lies, and that is with a more balanced and inclusive commitment to employees and their role as members of a living organization that in its nature learns and strives for growth. One of the books key themes is that the core of organizational capability is skills, which demand a strategic approach to growing skills within the workforce that addresses both business outcomes AND personal growth.

What sets Enterprise Skills Unlocked apart is its comprehensive and practical approach. Despite the hundreds of articles, six books, and billions of dollars being invested in the space, there has yet to be a practical guide outlining exactly how to tackle the topic. This book does that in simple, straight forward language. It follows the key phases of a skills-based talent transformation from initial business case to the details of technical implementations, and outlines the steps, challenges, and implications of each step in the process. Along the way it highlights a number of tools and frameworks to help simplify decision making and holistically organize all the dimensions and workstreams in an enterprise skills-based talent journey. It tackles common concerns and confusions head on, with simple charts and relevant client examples to highlight practical insights and tangible benefits. Exhaustively researched with over 150 client interviews, 350 citations, and 80 client examples, it leverages the author’s 30 years as a human capital consultant and over a decade writing on this topic. Neatly organized so different audiences can quickly skip to the section most relevant to them, it is the most detailed and comprehensive published work on the subject to date.

In your experience working with clients, how are leading companies using data and technology to fuel skills-based strategies successfully?
Skills are a special kind of data. At the individual level, skills data describes something about the employee and what they can do, so it’s HR data. However, at an aggregate level, skills data defines what products and services a company can provide and sell. It represents business capability. This unique quality of skills data transforms HR data from an exercise in headcount management to an exercise in capability management, aligning it much more closely with business outcomes. Additionally, its more granular than headcount data, allowing for more adaptable resource management, more personalized learning solutions, more targeted talent acquisition, more flexible career management, and broader leadership development.

When skills data is linked to people and learning courses, it can drive more personalized learning pathways, when it is linked to work data, it can enable talent marketplaces and AI/Human-Centered work design. When it is linked to both it can enable real-time project onboarding and IDP driven learning recommendations. When it is linked to the job architecture, it illuminates career pathways between any two points in the organization. When it is linked to all three (people, jobs and work), it can enable personalized learning, developmental gigs, mentor assignments, and communities of practice membership for any target leadership skill in real time. When linked to workforce and labor market data, it can enable more strategic workforce planning, and talent acquisition. When linked across the enterprise, it can support development of workforce capabilities and skill sourcing across the entire talent value chain (including build, buy, borrow, bot, rebadge and base elsewhere strategies).

The advantage of this approach is that, as skills data is shared between talent processes it enables more adaptable, efficient, and tailored talent outcomes.

From a personal strategy perspective, how do you stay ahead of the evolving talent landscape and ensure your frameworks remain practical and relevant?
Primarily, I speak to clients regularly. In addition to my client work, I meet with prospective clients and former colleagues every week. I attend industry conferences to meet with vendors, listen to industry leaders, and hear about the latest developments. I have an internet feed that informs me of the latest publications on the topic. Recently, I taught a class on the subject. And since the publication of the book, I have had the opportunity to talk to trade journalists, podcast hosts and other authors in the talent space. But my best source of information remains client interactions, whether that is part of a client engagement or an exploratory conversation.

What advice would you offer to HR and business leaders just starting to explore skills-based talent approaches but unsure of where to begin?
Start small and stay focused on practical business challenges. Skills-based initiatives can be localized, pragmatic and limited, and still achieve real business value.

In the book, we highlight a maturity model defining 23 dimensions of a skills-based talent journey across five stages of increasing maturity. We use it to help define the current state and future aspirations for a skills-based talent journey. However,

No one said you have to move every part of your organization to level 5 across every dimension of the maturity model to be successful.

Taken together, all nine of the skill-based talent ‘cogs’ we highlight in the book could comprise a “skills-based organization.” But not all organizations will get there, nor do they need to.

Skills-based talent is not about reaching a perfect ‘Level 5’ maturity across every aspect but about making strategic, incremental changes that align with your business objectives.

Many companies will use skills-based talent strategies only for specific talent needs.
Many others will use it more broadly but will take incremental steps that will never achieve “Level 5” maturity.
Still, others will pursue a more advanced solution, but only within critical business units, divisions, or product lines.

This practical approach ensures that the strategies are feasible and can be implemented without overwhelming your organization.

Also, there is no single system today that can handle every aspect of a skills-based talent transformation. Skills-based technology is an evolving market. There are many vendors in the space. Some are start-ups with advanced but narrow functionality. Others are broader talent systems, acquiring new skills, functionality, or players. But no one system can do it all. If you’re going to invest in becoming a skills-based enterprise, you’re going to have to review your technology stack – and define a plan to develop a technology ecosystem over time that handle all your skills-based talent aspirations.

Finally, any closing thoughts on the future of work and how skills-based talent strategies will shape the next decade?
In an information age, especially in western economies increasingly dominated by service industries, skills are the product you are selling. If a company is paid to provide a service to its clients (e.g., financial services, healthcare, professional services, etc.), the advice it offers and the expertise it makes available to its clients are the skills developed throughout its employees’ careers. It’s literally what one bills for. Manufacturing today is largely dependent on STEM skills to produce their core products – as companies have seen the rapid introduction of computer technology in factories, devices, and machinery. Even those sectors not directly reliant on technology or engineering to the same degree are impacted by the general shift to an information age. Consider how e-commerce and social media have completely redefined retail, hospitality, food service, and entertainment – to say nothing of how many firms’ pursuit of sustainability goals or management of climate risk is driving change to supply chains, distribution channels, and legacy manufacturing processes – all dependent on science, technology and engineering skills.

And the pace of technological change has never been greater. Companies increasingly realize that the new business environment often requires massive agility to keep pace with emerging technology, new competitive entrants, new market opportunities, and business disruptions. The reality of industry convergence through rapid and transformative technological advancements means that no company, no matter how advanced or market-leading, is ultimately safe. Industry-changing advancements are occurring at an increasing pace. The average lifespan of a company is decreasing from approximately 60 years to closer to 15 years, according to various studies from sources such as Yale University, HBR, Huron, KPMG, Credit Suisse, & the Santa Fe Institute.

At the same time the global economy is more dependent on rapidly emerging skills, especially STEM skills, than ever before, it is experiencing a seismic transition in its supply of those skills. Baby boomers are retiring, STEM graduates among Gen Z are declining, Millennials consider taking a new job as their best avenue for advancement, and the option to pursue an independent career has never had lower barriers to entry. This shift has pushed companies to rethink traditional talent development and career models, offering more diverse career paths to meet the workforce’s varied aspirations. They seek to differentiate their employee experience in the war for talent, to attract and retain the best talent, and to boost engagement and productivity in response to these changing attitudes about career mobility, loyalty, and flexibility. Operationally they are pursuing more agile, project driven, human-centric ways of working and more autonomous organizational structures to keep pace with the increasing pace of change. More than just a trend, we see skills-based talent as an initial step on a larger journey.

If the trends of the last thirty years hold, skills-based talent management should not be the final step in the shift toward Industry 4.0 talent management. Just as ERP systems were a necessary step in digitizing work that ultimately led to fully digital enterprises, skills-based talent will be a critical step in the evolution of talent. Companies must capture today’s nascent skills data that is invisible to their talent systems. When they have full command of the capabilities of their workforce and all its individuals, they will be ready for whatever comes next.