The Long but Rewarding Journey to Becoming a Skills-Driven Organization | The Conference Board

Talent Management

There’s a prevalent narrative about becoming a skills-driven organization (SDO)—where skills rather than jobs serve as the basis for an organization’s talent practices, such as hiring and workforce planning. However, as highlighted in this 8-page paper, the transition to SDO is intricate, demanding a thorough readiness assessment before initiation. A crucial step in this shift is articulating the rationale for becoming an SDO. HR practitioners play a pivotal role in helping leaders understand the answers to fundamental questions, such as: Why invest effort in transitioning to a skills-based approach? How does this shift provide incremental value to organizational stakeholders? What are the practical consequences if this change isn’t made? The paper shares an example of how Ericsson implemented its journey to becoming an SDO, notably beginning with a compelling case for change and utilizing simplified language to communicate advantages. Figure 1 illustrates how Ericsson made the case for change by drawing from trends and internal pain points. However, as highlighted, for certain organizations, the time, effort, and costs associated with becoming an SDO might outweigh the potential benefits. For instance, while SDOs aim to enhance organizational agility, this benefit might not be a priority for companies in a stable competitive environment. Page 2 presents four pivotal questions to aid organizations in determining if a skill-based approach is right for them. As a bonus, I am resharing 10 Q&As I curated from different sources that address questions on skills-based organizations.