Skill up! Getting ready for the skills-powered organization

Transcript

Stuart Crainer:

Hello. I’m Stuart Crainer, co-founder of Thinkers50. Welcome to this series of four webinars celebrating the skills-powered organization. This is the final one in our series. In the opening webinar, we looked at the data you need to make skills the currency of work. We had a brilliant discussion featuring Ravin Jesuthasan and Peter Stevenson from Mercer, alongside Britt Alcala from Delta Airlines. Then on September the 18th, we had another great session on how organizations can reshape how they manage talents and skills to be prepared for an uncertain future. Lauren Mason and Jessica Kennedy from Mercer were joined by Jennifer Acosta from Kenvue talking about how to make job architectures future fit. For the third in the series, we looked at the great redesign of work. Tim Flank and Tanu Gupta Jain of Mercer explored why organizations are increasingly making work design a core capability and shared some great practical examples. Those sessions are now available on YouTube. They’re worth checking out if you couldn’t join us live.

Now for the final webinar in our series. As always, please send in your comments, queries, thoughts, and questions at any time during the session and I’ll make sure to share them. I’m delighted today to be joined by Ravin Jesuthasan and Tanuj Kapilashrami, who will be crystallizing the key messages from their book, The Skills-Powered Organization: The Journey to the Next-Generation Enterprise, which is published by MIT Press and is now available. Ravin is joining us from Atlanta where he is the co-author of the best-selling Work Without Jobs and Global Leader of Mercer’s Transformation Services business. Tanuj is joining us from Hong Kong. She is the Chief Strategy and Talent Officer at Standard Chartered and has led its drive to become skills-based. So Ravin and Tanuj, welcome. Really nice to see you again. Well, perhaps for people who don’t know, it’d be good to start by talking about how you began to collaborate and why you began to collaborate. Tanuj, perhaps you could start.

Tanuj Kapilashrami:

Thanks, Stuart. Thanks. It’s great to join this session and great to do it with Ravin. Well, actually, Ravin and I first spoke about this topic at Davos almost two years ago. That conversation led to a series of discussions on this topic. Both of us have been really interested in the way the world of work is changing, jobs being the traditional currency of work, giving way to skills being the currency of work. What does that mean in terms of operating systems? What does that mean in terms of work design? What does that mean in terms of flow of talent to skills versus traditional jobs? Those conversations over the years led to us coming together last year and writing this book, which we are intending to position as a real practitioner’s guide. It obviously builds on the work Ravin’s been doing over the years in terms of his work with his clients across sectors, but also all of the research-based work Ravin’s been doing, and hopefully marries it with a very practical toolkit which enables businesses to truly become skills-powered.

Stuart Crainer:

But you’ve been thinking about these issues for years as well, Tanuj, going back to your MBA. How many years have you been talking about these issues?

Tanuj Kapilashrami:

Well, I’m not going to give my age away, Stuart. But I was saying to you before we started that the gap between education and employability… Actually, the book, and I’m sure Ravin will touch on this as well, we do get, towards the end of the book, of the broader societal impact of this work. While it starts with what companies need to do inside organizations, so what does it mean to unlock productivity, what does it mean in terms of providing purposeful, meaningful careers, but we actually touch in the book on the broader societal impact of this work. That’s been an area of passion of mine for years, the gap between education and employability and the role that businesses need to play in bridging that gap. So it was great to be able to collaborate with Ravin and put some of these ideas and practices on paper. The book came out a couple of days ago.

Stuart Crainer:

Ravin, what’s your version of the gestation story for the book and working together?

Ravin Jesuthasan:

No, Tanuj is absolutely right. Stuart, from my vantage point, I sort of view this as a very logical next step building on the books that I’ve co-authored, as you well know, with John Boudreau, my last four books. The second book was about how work was starting to escape the traditional boundaries and confines of an organization with the rise of gig talent, alternative work models, and we started to get into the need for skills to be the currency for work in reinventing jobs. We looked at the impact of AI and process automation and how that was changing skill premiums, etc. In Work Without Jobs that you referenced, we baked that into an operating system and illustrated that with dozens of case studies.

Then with The Skills-Powered Organization, to me it’s just a very logical next step. But I think most importantly, as Tanuj has alluded to, we really wanted this to be a book for the practitioner. How do you bring some of those legacy and original ideas, but more importantly, how do you bring the ideas in this particular book to life as it relates to fundamentally changing the economics of work, bending the demand curve of work in a fundamentally different way to progressively decouple growth from resource intensity and bending the supply curve of work in a different way to increase the accessibility of work to many more people? The answer to that, as we illustrate in the book and as Tanuj brilliantly does, is illustrate in very practical terms how Standard Chartered Bank has brought that to life under her leadership and stewardship. So I think, for me, it’s been really a neat book to write and a very different one because it’s the combination of theory and the practice of actually bringing the theory to life.

Stuart Crainer:

For people joining us from the UK, the US, France, Switzerland, South Africa, Turkey, Denmark, and Finland so far, and Singapore, I see, please send in your questions and observations at any time, and I’ll make sure I’ll pass them on to Tanuj and Ravin. Can we go back? It’s always good, I think, at the start of these sessions, to go back to the basics, Ravin. Let’s talk about skills, the language you use. Why skills and why now?

Ravin Jesuthasan:

So, Stuart, a little bit of data and perspective on that. The traditional model, operating model for work is one that’s grounded in this thing called jobs. We’ve had that for 140 years, and it stood us in good stead for a long time, that one-to-one relationship between a degree, a person, and a position, but as we’ve seen particularly over the last four years, the exponential change in volatility and velocity of the global economy.

In Davos this last year where Tanuj and I were together, well, not this last year, but in January, Sam Altman said, maybe a little overstated but I think the point was well-made, that never in the history of humanity have we seen volatility and velocity of change in as what we’ve seen in the last four years since COVID. Again, it may have been overstated. But then the IMF came out a couple of months later and said, by their estimates, uncertainty in the global economy is up by 2.5 times, not 2.5%, but 2.5X, compared to the historical 30-year average.

That volatility driven by obviously the geopolitical crises that are driving strategies like nearshoring and redefining supply chains, the energy crisis in part accelerated by the war in Ukraine that’s forcing all countries and organizations to rethink their operating models, the climate crisis that is forcing numerous governments and organizations to rethink what the new skills are to deal with challenges like the ones we’ve just seen in Florida, which has created a whole set of new types of jobs, new types of skills required for municipalities and cities as well as organizations, and then certainly AI. When you put all of these forces together, you see this amplification of volatility and velocity and the need for, as we write about in the book, much smaller building blocks for work versus a job, these smaller elements, i.e., skills, that can be deconstructed, recombined, redeployed at scale and speed to respond to this volatility and velocity.

That’s, I think, really at the heart of why this topic of skills has steadily gone from a bit of a murmur and being a source of something that is of interest to geeks like Tanuj and I to actually really hitting the mainstream. We heard that extensively at the Milken Global Institute conference in LA this year, where that whole narrative around experimenting with gen AI had rapidly shifted from interesting use cases and experiments to, how do we fundamentally transform towards an AI augmented model? The recognition that what was often the biggest impediment were the skills of the workforce, the skills to use these tools, the recognition of the skills being rendered obsolete by some of these new tools, skills changing in application as a result of gen AI, and yet new skills being demanded. Again, I think those macroeconomic variables driving velocity and volatility, Stuart, are really at the heart of why this thing called skills has become such a mission-critical imperative.

Stuart Crainer:

So volatility means that skills are a better means of understanding and organizing work fundamentally.

Ravin Jesuthasan:

Yeah, a much better way of getting demand signals for how work is changing, which traditionally we’ve been incredibly poor at as business leaders. Those demand signals get to organizations often very late. So that connection between how are the demands of my customer changing, how does the work need to change, and how do the skills and capabilities of either the human or the machine need to change with that? Then equally, an understanding of the supply side of the equation and the ability to continuously have those signals and connect them much more quickly in much simpler, more agile terms, I think, is really what drives this notion, what makes skills that compelling currency for work.

Stuart Crainer:

Yeah, because work has not been designed around flexibility over the last… in the Industrial Age. I think you talked about the job going back 140 years, Ravin, but it must go back further than that. Don’t you think that? It must go to the Industrial Revolution, at least the way we’ve constructed work like that.

Ravin Jesuthasan:

Yeah, yeah. I think what you saw was it really got systematized during the second Industrial Revolution where this profession of HR effectively came into being to ensure what many would call the silent running of the enterprise, enough people with the right skills available in the right job at the right time and that the science around that came into being. But, yes, certainly the job itself, that aggregation of disparate cottage activities that used to be done in cottage industries into this thing called a job sort of predates that. But the science around it, I think, really came to the fore, Stuart, about 140 years ago.

Stuart Crainer:

What was the starting point from your point of view, Tanuj? How did these ideas resonate and apply in the context of Standard Chartered?

Tanuj Kapilashrami:

Stuart, the book really starts off with this insight, and you touched on it right now, that the way work is structured today is a product of at least the second Industrial Revolution when it got sort of systematized. Going back to everything that Ravin has said in terms of the rapid change that’s happening all around us, technology, climate, geopolitical, it requires a pace of change inside companies, a level of transformation that’s been unprecedented. If we believe that we’ve just crossed the fourth Industrial Revolution, how could work continue to be organized? How could we be getting maximum productivity inside companies while having a model which felt so rigid? I think that’s where the book starts from.

For us in StandChart, this journey started a couple of years ago when we looked at the strategic priorities for our business over the next phase of our transformation, the next five years, seven years, 10 years, and actually started thinking through the skills that are going to be needed to be able to deliver on our growth aspirations. It became quite clear that this traditional model that businesses have had, large-scale restructuring when business models disrupt or business models change and then replacing it with loads of hiring to hire people on new skills was just commercially not viable. So this idea of ‘how are you building, buying, and borrowing skills in a bit of a seamless way in the company which helps you fuel the growth and visions of the business’ became quite stark.

So one of them is, could you commercially afford to have such a big transformation of your workforce without really thinking about skill-building at scale, was the first challenge. The second one was, even if you could afford it, did those skills really exist in the external world? We talked quite a bit about green skills: technology, cyber, the new jobs and the new skills that are coming up. Do those skills exist externally for us to be able to get them? The third piece for us was really the expectation of our workforce. It became very clear that as the world of work was disrupting rapidly, the workforce was expecting the organization to play much more of a leading role in being able to provide that skill-building opportunity for them.

So for us, the fact that the world of work was changing, the fact that especially with the advent of the AI, gen AI, there was a prediction that over the next five years more than a quarter of jobs will be disrupted in some ways, the fact that we had loads of new opportunity coming in, especially in areas of sustainable finance, leveraging technology across our operations. That meant a whole host of new skills and actually underpinning it all very clearly with the commercial case around, what does it cost to build, buy, or borrow skills and what does that mean in the context of the operating model? That’s where our conversation around skills started within Standard Chartered.

Stuart Crainer:

How do people react? Ravin, when you talk to organizations talking about being skills-powered, are there cultural…? The notion of jobs and work is very, very, very well established and our understanding of it is, and we have some notion of skills and need for greater flexibility, etc. But how do people react?

Ravin Jesuthasan:

Yes, Stuart, a really good question. The way we’ve framed it, the way it’s landed is it’s sort of a migratory journey. That was captured in that second conversation you alluded to, the one between Lauren and Jessica and the lady from Kenvue, forgive me, I’m forgetting her name. For many organizations, Stuart, it’s starting with, how do we make our jobs more skills-powered? Because I often like to say job descriptions hide all manner of sins. You’ve got skills, you’ve got traits, you’ve got key requirements, you’ve got output and outcomes, so how do we get quite crisp and clear about the skills required to get the work done, both technical as well as human? So that’s often the start of the journey. Then once you’ve gotten that, thinking about, well, now that we’ve gotten the job architecture fixed, how do we use skills to create a much more agile way of connecting talent to work beyond this notion of a job?

In the book, Tanuj and I write about three models of work, the fixed model, which is that traditional job-based model, albeit more skills powered; the flexible model, where we start to see organizations taking people who might be in jobs but using insight into the demand for skills and the skills possessed by the individuals to allow them to more flexibly express those skills across the operating model and to use that opportunity to acquire new skills, so this notion of a flexible role construct; and then all the way to what I think of as being agile on steroids with this notion of a flow model in action.

We’re seeing that model really start to get some traction of late with organizations moving to what some might call being more outcome-based. Others might call it about being more around dynamic shared ownership. But it’s basically the extension of agile principles across the enterprise. We’re starting to see some really… We’ve got a number of examples in the book of organizations who have gotten an exponential return by moving work from a traditional fixed model into that flow model in terms of agility gains, in terms of productivity gains, and as it relates to making progress on that, certainly that demand side that I talked about of creating a model that progressively decouples future growth from resource intensity.

Stuart Crainer:

Tanuj, where are you on this journey at Standard Chartered now? I know that the book tells the story, but things have probably changed since the book was written even.

Tanuj Kapilashrami:

Look, it’s very important to note, Stuart, and Ravin says it, our journey with becoming skills-powered started with the idea of getting much more clarity around jobs. The thing is, one of the big things we obsessed about when we were writing the book is, where do legacy businesses start? Standard Chartered is a 160-year-old bank in 50 plus markets. This is not designing an organization on a blank piece of paper. It was very important for us that, when we spoke about some of these concepts, we also were able to give suggestions on where do companies start.

For us, it really started with us looking at a strategic workforce plan around jobs for the next five years, seven years, 10 years, and actually getting a very clear view when we looked at the jobs that are not going to be needed versus jobs that we are going to need loads more of, getting very quickly to what are the skills that underpin the jobs that we are going to need much more of. We started talking about, five years ago now, six years ago, the idea of sunrise jobs and sunset jobs and, on the other, sunrise skills and sunset skills in a very visible way to bring that into the language in the company.

Actually then, the real journey for us started with building a very strong learning habit. We started talking about, what are the skills everyone is going to need? We talk quite a bit about humans working intuitively with AI as a skill that’s going to be something everyone is going to need. You don’t have to be a technologist or a data scientist, but over the next couple of years that’s going to be a skill that everyone’s going to need. So we start talking about building a very strong learning habit in the company, both around of skills which everyone will need, but then also getting quite targeted around reskilling and redeploying people from sunset roles to sunrise roles, both more generic, but really critical skill-building in the company, but then more targeted skill-building in areas that we knew we were going to have a resource constraint and actually redeploying people into those areas internally. So that’s where we started.

We then moved into the idea of a talent marketplace for us, which is a huge part of the book, which is creating an ecosystem which is able to match demand and supply of skills beyond the traditional hierarchies of jobs and beginning to report on the level of productivity it unlocks in the company. There’s loads of data in the book. But the numbers have become quite impressive for us because over the years what we’ve done is we’ve created our own version of a gig economy where workflows to skills irrespective of people’s educational backgrounds, irrespective of which part of the world that they are in, etc., etc., but people are able to deploy their skills to meaningful purposeful work, which helps them practice skill-building. So there’s a whole development angle to it, but it actually helps us deploy our skills in areas of biggest opportunities. So that was the second phase of our work.

The third, which is where we are, is really challenging operating models, so getting quite clear about parts of our organization where we can do a deployment of talent much more around skills than pure jobs. So this idea of skills passports, people clearly articulate being very clear on the skills that are going to be needed for the future, giving colleagues an opportunity to articulate their own skills proficiency, having their people leaders work with them to attest that in certain areas, having targeted accreditation programs built on it, but then actually using technology at scale to get hiring managers the build, buy, borrow choices done on their fingertips. Being able to create that ecosystem where deployment works, that to me is where we’ve got to, which is fundamentally redesigning how work is getting done in some of our most exciting growth areas in the bank.

Stuart Crainer:

What surprised you along the way, Tanuj?

Tanuj Kapilashrami:

Well Stuart, a couple of things that surprised me. The first bit was that when we started the journey, there was a huge amount of excitement because we started with building a very strong learning habit in the company. It’s very difficult to argue with that. It’s very difficult to argue with the fact that the world of work is disrupting and the company is putting real investment and energy and building a culture where we are encouraging people to upskill themselves. So there was a huge amount of energy.

We then got into… There’s early stages. We still do it, very clear future-focused academies. We’ve got experiential learning being made available to colleagues in a very exciting way, so move away from traditional learning programs and traditional learning because there was a huge amount of energy. But for us, the real opportunity was when we started moving from reskilling to redeployment. It’s good to do all of the training and everyone gets very excited, but the rubber starts hitting the road when you start having some very commercial conversations with people saying, in these kinds of areas, we are not going to default to hiring externally. We are going to reskill and redeploy. Actually, that comes to leadership, building the case, building a system that’s able to do it intuitively.

Some of our numbers have been very impressive. Just in the last one year, and we’ve been at this for a lot, our internal deployment roles in some of the most exciting parts of the bank have gone up by as much as 10%. So this is internally people being reskilled to redeploy versus us hiring externally. We found that it was about $50,000 US cheaper for us to reskill and redeploy. Then when you look at the 10% reported number for a firm of over a hundred thousand colleagues, the dollar impact of that was pretty amazing.

But then the human stories that came out of the level of inclusion that’s driving the kind of career paths people are being able to get, which is not within their silos but much more enterprise, but also the kind of productivity we were able to unlock in the company in terms of actual pieces of work that have been done far quicker because we’ve been able to deploy the skills internally, so the productivity gains, the impact on engagement attrition, and actually, this idea of providing purposeful careers. So it’s been a really interesting journey, but actually the level of excitement and energy behind it in the company is pretty massive.

Stuart Crainer:

Does being skills-based apply across all industries in geographies, Ravin? Are there any businesses that this doesn’t really apply to? I’m trying to think. I can’t think of…

Ravin Jesuthasan:

I don’t think… In my experience, Stuart, we’ve seen organizations from obviously financial services, as Tanuj just talked about, but oil and gas, automotive manufacturing, pharmaceuticals, professional services, obviously probably the easiest of the lot. All of them have the potential to become more skills-powered. I think what’s different though, Stuart, is the composition of work that sits in the fixed model versus the flexible model versus the flow model. I think we see in certain types of industries, there’s a lot more work still bound up on the fixed side of things, natural production and extractive-type industries. But work is still increasingly skills-powered, and we’re taking out a lot of the traditional noise and legacy markers of capability or legacy things that might’ve defined what demand for work looks like or what the supply of human capability might look like to get a lot crisper and clearer and thus a lot more efficient and effective in not just developing talent, as Tanuj just talked about but also as she’s alluded to, the deployment of talent to work even when it’s still in that traditional job construct.

Stuart Crainer:

Thanks, Ravin. Let’s dig into some of the questions. There’s lots of questions, lots of people joining us from around the world. Please send in the questions and I’ll pass them on. Let’s go. There’s one from a LinkedIn user. “What are the implications of a skills-powered model for recruitment, retention, and employee engagement strategies?” It seems to me we’ve talked about retention and employee engagement, but how does it affect recruitment, Ravin?

Ravin Jesuthasan:

It makes an exponential difference to recruitment, Stuart. Because one of the things that I’ve heard, and Tanuj can certainly attest to this, from every single CHRO I’ve worked with for the last, gosh, well, I’m not going to date myself, we’ll safely say well over 30 years, has been, “It’s a lot easier for our people to find work outside the organization than within.” So what you’re now starting to see as organizations move to becoming skills-powered, the role of talent acquisition dramatically changing from being just about, “Go find people externally,” to, “Help me think about how I resource work,” covering the entire gamut of not just external and internal talent and jobs but increasingly it might be retirees, it might be alumni, it might be gig workers, etc.

I think that’s one of the big benefits to making skills the currency for work, Stuart, is just the opening of the aperture to think much more holistically as to, where can the talent come from? Regardless of the manner in which the talent engages with the work or where their starting point might be, how do I get much better connections between all of these different individuals who could contribute to my mission and give them the accessibility to work within my organization? So talent acquisition has increasingly been on the front lines of this transformation.

Stuart Crainer:

Tanuj, do you want to add your experience?

Tanuj Kapilashrami:

What I’ll just say is one of the big pieces of work we have done, once we established the business case, agreed on a very clear path, started taking the steps, actually there is an opportunity and actually a need to pretty much rewire the entire HR operating system. Ravin speaks about recruiting. We are using much more skills passports. We are challenging ourselves to move away from just past experiences, academic qualifications to the skills that people have and the skills they need and actually really start assessing for the learning agility in individuals. What is their ability, or what is the level of agility that they need to acquire new skills, which is both in terms of assessment, but also looking at talent pools internally? Like I said, we’ve been able to shift our internal deployment versus our external hiring significantly, which obviously has implications for employee engagement, it has implications for high performer retention, etc.

We’ve then also challenged ourselves to assess what talent management practices look like. Traditionally, if you look at 9-box models, etc., of talent assessment, they have relied on past performance being a predictor of future potential. We’ve basically said what’s going to be a view of future potential is your ability to be able to acquire skills, reskill yourself at scale, so it’s learning agility, your level of motivation. So it’s really challenging some of the traditional norms in terms of the way we recruit talent, we develop talent, and actually both around attraction and retention.

Stuart Crainer:

The HR function has been criticized, marginalized, and now being reinvented. It’s had a hard time of it over the recent decades, hasn’t it? 

Tanuj Kapilashrami:

Well, sorry, Stuart, there’s a whole chapter in the book which we talk about: What does this mean for HR professionals? Actually, one of the things I say quite a bit is HR is going to become a custodian of skills not of jobs. If you really think about being a custodian of skills, which is both technical and human, there’s a lot that’s been said around technical skills, but we talk quite a bit about human skills. Because with everything that’s happening, especially with gen AI and shrinking half-life of technical skills, it’s actually going to be the human skills which are going to become incredibly important if they’re not important already. So to me, it’s about HR functions, thinking of themselves as custodian of skills and not jobs. If you were the custodian of skills, what are the choices you would make in the way HR practices are set up, I think, is the macro challenge.

Stuart Crainer:

Steven Lowenthal has a practical question, Tanuj. “How do you balance a more agile approach to forming teams to more traditional function-based team structures? For example, how is downtime handled?” which is a very practical point.

Tanuj Kapilashrami:

Well, Steven, what we did was we originally designed our talent marketplace just around gigs. So we left the traditional operating model of work, say the org structures, etc., but we created a talent marketplace which was just around gig working. Interestingly for me, a lot of people who signed up for it were people from functional areas. These were people who were signing up for a couple of hours of gig, are bringing their skills to completely different parts of the organization, which was either the work was aligned to their purpose or their interest, or the work was aligned to where they wanted to reskill themselves. Actually, we always built in a level of optionality in it. So to me, the idea was initially we didn’t make it just to push. There was a huge amount of pull that was built into the system.

I feel downtime is interesting because when we speak about reskilling, so we speak quite a bit about upskilling, reskilling, potentially outskilling in the flow of work, there is a huge expectation that this idea that people are going to upskill themselves or reskill themselves outside of the full day of work is really utopian. So how do we create those opportunities? How do we build that downtime within the flow of work for people to be able to reskill, upskill themselves was a huge part of the work we did.

One of the things we talk about in the context of the future of work… We’ve been talking about the future of work for years. We are in the future of work. Actually, a huge part of, how do you create an ecosystem where this idea of skill building is built into the flow of work is something that we… We’ve done a lot of that within StandChart, and actually, Ravin, many of the case studies that we’ve profiled in the book, Microsoft is obviously a great example, but there are many others where companies have actually built this within the flow of work, the idea of skill building. Because otherwise if you don’t do that, it’s quite difficult to achieve.

Stuart Crainer:

Somebody’s commented, you’ll be pleased to see, Ravin, that they agree with you. “As skills become the new currency of work, we must question whether our educational systems and societal structures are adequately preparing individuals.” I think Sandy further up in the stream has made a similar point about, where does this leave higher education?

Ravin Jesuthasan:

One of the chapters in the book, Stuart, we call it Beyond the Organization, so the broader skills ecosystem, whether that’s governments, higher education, the growing ecosystem of edtech organizations, etc., and the many different ways in which skills can now be developed beyond the traditional means. But it does call for a fundamental rethink of education, Stuart.

As you know, we’ve got a number of institutions, like the Harvard Business School, the National University of Singapore, who have redefined their mandate from saying, “You come here to earn a two-year degree or a four-year degree,” whatever it may be, “and that’s the end of our obligation,” to actually say, “Actually, our obligation extends well beyond that. Our obligation is to keep you relevant for a changing world.” In both of those institutions, I think anyone who graduates has unlimited free access to every learning resource that those institutions have. So if I’ve graduated from HBS, I get access to their regular classes, their digital assets, their various online assets and programs, etc., all again with this goal of keeping me relevant. I think that’s one aspect of the reinvention.

I think the other is a more critical and fundamental questioning of, why should someone come to a traditional academic institution? I’ve got a client who’s the president of a large university. They are redefining their mandate from being one of the best engineering schools in the world to actually saying, “Well, hang on, you don’t need to come to us to learn to be a great mechanical engineer because the mechanisms to teach you those skills are more effectively deployed through a variety of other channels, digital or otherwise. But what you are going to come here to do is you’re going to come here to learn how to learn for the rest of your life. You’re going to come here to build a community of people who are going to reinforce you in that journey and whom you are going to be reinforcing. They’re going to be your network that is going to grow together as the world changes, and you’re going to learn from each other.”

So this redefining of… It’s really easy to boil skills down to technical training, and it is so much more than that. We talk at length about it in the book. It’s the environment that surrounds the steady growth of individuals and organizations. As the demand from customers changes, as the world changes, how do we ensure both enterprise and individual can keep up with that? Again, you can’t do it unless you’ve got a singular currency that, if you look at it and I look at it and Tanuj look at it, it’s not like the blind men and the elephant where we all feel something different, but it is something that is universal and can be used as that common thread to align all of those disparate interests.

Tanuj Kapilashrami:

Stuart, can I just make two quick points on this? Look, at the broader societal level, it’s going to be this gap between education and employability, and that gap is really skill-building. A lot of people say to me, “Does higher education continue to be relevant?” I think it does because it is about learning how to learn and learning how to learn is a skill as well, and being part of that community that learns together is a skill as well. But that does require educational institutions reinventing themselves, exactly as Ravin says.

For the last few years I’ve been involved with the Financial Skills Commission in the UK, which is where financial institutions have come together, it’s a member-based organization, to look at the skills that are going to be needed for the future and really start working with educational institutions on a level of partnership to be able to meet that sort of skill demand. So that’s the one.

The second thing I’ll say, and there’s a question later in the chat, it fundamentally alters the employee-employer relationship. In traditional patriarchal organizations, the businesses have been generating employment, and I talk about businesses needing to shift towards generating employability. Employment is much more static. Employment feels much more traditional. Employability is actually something which sets you up for the future. Within StandChart, we’ve started talking about… We talk about this a lot. How do we move away from generating employment to generating employability? That employability could be both within Standard Chartered, but it could also be outside. I think there is a fundamental re-contracting that we are doing with our own workforce in terms of the investment that we are making in driving a much more skills-powered agenda, and what are the expectations from our employees to be able to respond to those opportunities as well?

Stuart Crainer:

There’s an interesting point by somebody on LinkedIn saying, “How can organizations balance the need for specialized skills with the desire for adaptable, multi-skilled employees?” which is a fair point. Where does that leave people with very specialized skills who don’t want to be multi-skilled, I guess. They’ve spent years and years acquiring a very specialized skill. Related to that is the other concern about AI, and where does that leave us? Ravin?

Ravin Jesuthasan:

Stuart, both of those questions are certainly intertwined, as we know. I think it’s why in the book we talk about these three models for work because it’s really difficult to contemplate a world where it’s completely this flow model. As work emerges, people are continuously flowing to work, etc., and everyone is multi-skilled at everything. That’s certainly not going to happen. There’s certainly going to be a growing demand for a multi-skilled workforce. We talk about a workforce that’s built increasingly for just-in-case rather than only being built for just-in-time, which has been the dominant model for a long time.

But there is going to be this core of work, Stuart, that is bound up in that fixed model that we talk about, particularly organizations being really deliberate to understand, where is control the primary mechanism? If you think of airline pilots, if you think of drillers on oil rigs, if you think of some of those pivotal quality roles in process industries, there is such a premium on ensuring adherence of work and skills to really tight tolerances. The way skills are acquired, often time-to-productivity or proficiency can be extremely long in some of those roles, and the integrity of the operating model hinges on the proficiency of the operator, of the individual in the person ensuring the quality and compliance of the output.

So I think you’re going to see for those types of work, yes, certainly we’re going to be more skills-powered, but there is such a focus on ensuring steady acquisition of skills within a particular domain. So this notion of multi-skilled is probably not going to apply as much to talent in those roles. Recognizing, of course, that AI is certainly going to keep shifting skill premiums even as the talent might sort of stay in their lane, if you will.

So I think this is where, to me, this nuance is really important from a leadership perspective. It’s recognizing that, again, going back where we started, 140 years ago, we had a single model for work, all work being done in jobs. Today, given those issues of volatility, velocity, complexity we talked about, a need for a multimodal approach to work. That’s where I think these three models for work really start to help leaders crack down on, where do I need a fixed model for compliance and control, where can I have a flexible model for the management of capacity, and where can I have a flow model to deploy scarce capabilities at scale and speed across the business model with skills as the currency?

Stuart Crainer:

Kinga from Austin, Texas, has made a few comments, interesting ones. I think what she’s suggesting in a number of them is that this puts a premium on project management because you need the project managers to identify the skills and bring the people and the skills together. Is that correct?

Ravin Jesuthasan:

I’m going to kick it off, but I want Tanuj to talk about this because we’ve talked about this at length. If we were limited in, again, 140 years ago without the technology tools we have today, I would absolutely agree that this would be a human problem. But what has accelerated this as well as being the driver of the change, but what has enabled the skills-powered organizations, Stuart, is AI and the dramatic power and significant power we’re seeing of internal talent marketplaces, talent insights platforms to actually enable organizations to orchestrate this with data at real scale and speed. Tanuj, do you want to talk about just some of the great things you guys have done?

Tanuj Kapilashrami:

Stuart, it’s really interesting. Ravin and I did one of these sessions a couple of weeks ago. Halfway through the conversation the moderator said, “But actually, when we speak to people, there are loads of examples of skill-based careers.” I’m sure if we start talking about our own careers, all three of us, there would be many times in our careers where somebody said, “I know this is what you are doing and this is what you have done and this is your background, but actually what I see in you are these three or four skills, and I would like to take a risk on you because I believe you bring these skills to the table.” So that’s always been happening.

The opportunity we have is to be able to do this at scale. There was no way that we could build an ecosystem, an inclusive ecosystem. Because the other challenge with doing the traditional way of skill-based deployment was driven by people you know, people who look like you, people you’ve been working with very closely, etc., etc., etc. So to me, yes, if you think about how you’re deconstructing the three models of work, how do you deconstruct within that, what are the skills you need for today, what is the skills inventory you have, the idea of skills, if you want to try and do it all manually, it’s very complicated. But this is where, while AI is a challenge and there’s loads of questions around ethics, etc., etc., and we can get into that, while there are challenges with AI, I think it’s a massive opportunity.

One of the things that we speak about in the book quite a bit is, how do you build this ecosystem? One is you’ve got to sort of build it conceptually. It has to make sense in your organization. It has to be linked with your strategy. It has to be linked with your workforce transformation agenda. But then how do you deploy it at scale? That deployment of scale is where technology can be a massive enabler.

So to me, coming back to this question, Kinga’s questions, “Does this require a disproportionate amount of focus on human skills?” which is the first part of our question. Yes, yes, and yes, because we talk quite a bit about, especially with the emerging technologies and shrinking half-life of technical skills, it’s really going to be about the human-AI collaboration and a lot of the human skills are going to become incredibly important. So, yes, human skills are important, but are you going to need a disproportionate amount of project management skills? Project management skills are pretty important in any case, but there is an opportunity to build this ecosystem leveraging technology very differently to the way we have done in the past.

Stuart Crainer:

I think it’s interesting the language around skills. Somebody on LinkedIn says, “In a skills-powered organization, the traditional notion of job security is replaced by skills security.” It’s quite an interesting phrase. Is that a nice summation?

Tanuj Kapilashrami:

Look, I think language is important. We’ve been speaking about the war for talent for a very, very long time. How many sessions have we done where we said, “There’s a real war for talent”? I now talk about war for hot skills. Because actually to be honest, if you look at the world today, there are large parts of the world that are suffering high levels of unemployment. But then you have got certain other areas, which is old skills, which are in hot demand, and there’s a huge amount of premium that’s being paid.

So if you talk about the traditional notion of war for talent, I believe that war for talent has been replaced with war for hot skills. Actually, people who are going to be left behind are people who are not investing in that level of skill building for themselves or taking opportunities inside or outside to be able to develop skills. Do I believe language is important? I think it is, Stuart. A huge part of the work that we have done in StandChart and loads of companies that are at various phases in the journey, it’s really bringing the language around skills and the way we start talking about how work gets done.

Stuart Crainer:

Let’s get through as many of the questions as we can. Frank Calberg has sent in some interesting questions. Frank says, “What can leaders do to get rid of or reduce narrowly defined job descriptions?” So job descriptions are history, is that right, Ravin, or it should be?

Ravin Jesuthasan:

Well, I think they’re going to be here for a long time. But again, I do think, as I said earlier, the traditional job descriptions, Stuart, hide all manner of sins. As Tanuj was saying, they often were written to reflect the incumbent, the particular traits he or she might have, their particular experiences, etc., as opposed to, what are the actual skills I need to do the work?

But I do think what’s going to happen is… In the old days, we could write a job description and probably leave it for about 10 years. What we’re seeing now, and Lauren and Jess Kennedy would have talked about this on that second session, is the need for continuous updating because the scale premiums are shrinking so dramatically, particularly with some of these technical skills down to two and a half years to it, the need to keep updating them at speed is increasing. But it’s also, again, where we’re finding a lot of use for AI. In the work we do at Mercer with our clients, we’ve got our own large language models that are used to help clients update those job descriptions rapidly.

Stuart Crainer:

Vasileia says, “How can organizations link skills needed with personality testing?” Where does this leave personality testing? She says, “Certain types of personalities and strengths can mean being more prone to having or developing certain skills.” Where does it leave personality testing, which is a mainstay of human resource organizations?

Ravin Jesuthasan:

I’ll maybe start, and Tanuj, would love your perspectives. I think the need for personality and psychological and other sorts of testing remains. What I think you’re starting to see, Stuart, is the rounding out of what we’re broadly calling skill measurement, so understanding, where does that personality test, where does that psychological assessment make sense? Often, it’s where the bar is really high. Versus, where might things like skills inferencing and the inferencing of people’s interests, etc., which often comes from these tech platforms, where might that be helpful? So I think we’re going from a very single mode of assessment where the bar was really high and it was incredibly intensive to a multimodal approach that I think is giving you more of a 360 view of the individual and the many different ways in which you could contribute to your organization today and grow tomorrow into potentially new types of work.

Stuart Crainer:

Tanuj?

Tanuj Kapilashrami:

Look, all I’ll say is assessment is a huge part of this. Will job descriptions go away? Job descriptions definitely need to be adapted. We have started piloting skills passports in large parts of our organization. There is bits of the traditional job description, but it leads with the skills that you have and the skills you need and that suddenly it feels like a much more living, breathing organism as opposed to this idea of you write a traditional job description which gets locked in your cupboard or wherever you put it in the past. So that’s why.

Assessment is a huge part of this, but what you are assessing is going to be absolutely critical. I think there’s a huge amount of wasted dollars on assessment. To me, the kind of skills that we are looking at is learning agility, is curiosity, is learning how to learn, ability to manage resilience. So there is a real role for assessments and testing, but actually being very, very circumspect for what it is that you’re assessing and to what end.

Stuart Crainer:

Frank Calberg… We’re running out of time. Frank makes a challenging question. “To transform an organization towards a skills-powered organization, what are the three most effective initiatives that owners/shareholders can take?” So you’re going through it Tanuj and Ravin…

Tanuj Kapilashrami:

I will tell you the three things that work for us very well. We launched a talent marketplace. We’ve got 35,000 of our colleagues who are actively on talent marketplace. As of date in the last few years it has unlocked over $10 million US of productivity. This is people who are giving their skills for pieces of work outside their area of work. So that, for me, is a very clear commercial case for shareholders.

The second thing that we have done is very targeted proof of concept. So we have worked on skills adjacencies and looked at pools of skills that can be in sunset jobs, which can be reskilled and redeployed to sunrise jobs and in areas like data analysts, in looking at entry level jobs within sustainability areas. And, for us, we found if we move that by one percentage point, internal reskilling and redeployment versus external hiring, it is a couple of million bucks for us in terms of… So there is a very commercial case.

The third thing, which we have done a huge amount of work on, is the impact that has. So we’ve started correlating the investment in colleagues are making on their own personal development. We’ve got future-focused learning academies. We can see the kind of reskilling people are doing on future-focused skills, hot skills as we call them. We’ve been able to correlate the investment people are doing and what it does to attrition, especially of our high performers. We’ve been able to put a dollar value to it. So there is a very clear commercial case to be made across all of these three initiatives.

Stuart Crainer:

Ravin, what would you like people to do?

Ravin Jesuthasan:

I know we’re in the last couple of minutes, Stuart. I would say, well, two things. One is in the book we talk about the three core capabilities of the skills-powered organization, and Tanuj has alluded to this. One is this inherent capability of getting early demand signals for work, understanding how the work needs to be configured with AI versus human talent, and understanding the supply of skills regardless of whether that talent is an employee versus a gig worker. Secondly, making development a core part of the operating model, as Tanuj has talked about, designing in space for learning into the flow of work, putting development alongside the capital investment in the strategic plan. Then thirdly, because you’re never going to do development just purely for the sake of development, understanding how skills are going to be deployed back to work for productive gain.

The last thing I’ll say, Stuart, is in the book we’ve got a number of case studies where we show, frankly, the exponential gains possible across productivity, across agility, employee engagement, etc. It’s what makes this journey worth the lift because it’s not an easy journey, as we’ve talked about. It’s quite hard, and it requires a fundamental change in mindset, skill set, and tool set. But the prize at the end of this is truly worth it. We’ve got a number of case studies in there that illustrate, in some instances, 45% gains in profitability without headcount reductions. So, again, I think there is a compelling case for change.

Stuart Crainer:

I think that’s something our audience has picked up as well. We’re out of time. Thank you everyone from around the world for joining us. We really appreciate some really great challenging questions, which Tanuj and Ravin dealt with brilliantly as well. I think what marks The Skills-Powered Organization out is that it’s a very practical book. It’s very topical. It’s for now, and the trends are really going to shape the workplace of the future. So thank you Ravin, and thank you Tanuj. The Skills-Powered Organization is out now from MIT Press. If you want to watch this session again, it’ll be available on YouTube soon. The three previous sessions are already available on YouTube. There’s a lot to learn and to stimulate debate and thought there. Thank you, Ravin. Thank you, Tanuj. And thank you everyone for joining us.

Tanuj Kapilashrami:

Thanks a lot. Bye.

Ravin Jesuthasan:

Bye-bye.