People change slowly. They change because they have to, more often than because they want to. And they change their behaviours before they change their beliefs.

Nowhere is this more manifest than in business. And most large organizations have a large number of people, and so, like oil tankers, they change direction the slowest of all, and are the least agile and manoeuvrable.

Change gurus and consultants have, over the years, pushed three ways to bring about change in organizations. leversThese are illustrated in the concentric circles at right.

The first way is by changing or imposing tools and technologies that enable, or strait-jacket, employees. A software program that requires you to complete credit check information on a new customer before you can open up a customer ID and sell to that customer is one example. New skills and competencies, both technical and ‘soft’ skills like time management, can also be considered ‘tools’ of the trade. The difference between a skill and a competency is that a competency is an applied skill — the competency to innovate, for example, is an application of several skills, notably creative skills.

The second way is by changing or imposing work processes and methodologies. The new regulations under the Sarbanes-Oxley Act, for example, have imposed mandatory new processes on both managers and auditors of public corporations.

The third way is by changing the culture of the organization by using ‘internal marketing’, by leadership style, through performance management and through reward and recognition programs.

In the past generation, all three methods have been, and continue to be, used in most organizations, particularly the larger ones which are inherently harder to change. ‘Core competency’ development, which was hot in the 1980s, has somewhat gone out of favour as the loyalty of employees to employers, and employers’ willingness to invest long-term in employees, has waned. To most large enterprises, automation is a more expedient way to use technology to achieve change, since to some extent it bypasses change-resistant people entirely.

The rage of the 1990s was Business Process Reengineering, which attempted to change organizations using the process lever. In organizations where processes were defined and prescriptive, this was generally a success. But, as Peter Drucker has pointed out, we now live in a world where, for the first time, most employees know more about how to do their own specialized job than their boss does, and almost everyone’s job is unique. When there is no longer any ‘standard process’, any ‘best practice’ that applies across a large group of employees’ jobs, there is limited opportunity to apply this change lever. One business guru has even predicted that the information age will bring ‘the death of processes’. What many organizations are doing, instead, is suggesting, rather than imposing, ways to improve productivity at the more granular task level, rather than at the process level. Such bottom-up, personalized productivity improvement programs are more focused and effective than broad-brush process improvement programs, but are also more expensive. They are generally only occurring, therefore, in the small number of organizations still willing to make a significant investment in their employees.

A more popular way of dealing with this ‘problem’ is to get rid of it entirely, and to outsource or offshore processes entirely, so that they become other organizations’ — suppliers’ — problems. Many organizations have found that, in outsourcing, you ultimately get what you pay for — if you’re lucky. Some organizations have already been through several cycles of outsourcing and then insourcing — bringing functions and processes that were being incompetently handled by outsourcers, back in to the company, and then trying again with another outsourcer. Ironically, one of the main victims of this revolving-door practice has been training departments, so that many organizations have less capability today to bring about organizational change either by improving processes and productivity, or by teaching new competencies. When training is done by outsiders, it is possible to teach skills, but nearly impossible to teach competencies — because teaching competencies requires a knowledge of the context in which the skills will be applied that outside teachers usually don’t have. That is why the apprenticeship and internship methods of teaching competencies held sway for centuries — because they provided that context, they worked.

In North America at least, there has been in the last couple of decades something of a cult of leadership, a belief that organizational leaders can single-handedly achieve massive change by some alchemy of charisma, management and example. This has been used to justify the huge salaries such leaders are paid. But most studies have shown that business leaders, like managers of sports franchises and political leaders, ‘succeed’ mainly because of good luck rather than good management — they happen to come into power at a time when the market for the company’s product, and the economy, are both on the upswing, brief periods when supply and demand happily coincide. And, like managers of sports franchises and political leaders, they are also now prone to be turfed out unceremoniously when their good fortune runs out. Charisma, rewards, strategies and coercive performance reviews can be effective, but their effect is notoriously short-lived. Ultimately, the success and accomplishments of every company are the sum of the productive efforts and energies of all of the employees of the company, nothing more and nothing less. There is growing evidence that the contribution of the average front-line worker is nearly as important as that of the CEO who may make 100 times his salary.

I would argue then that, particularly as it gets larger, the only way in which an organization can effectively differentiate itself or outperform its competition, is by helping its employees to work smarter. And the best ways to do that are to equip those employees with critical skills and competencies, and empower them to leverage those skills and competencies to give back to the organization creative solutions to its particular, and evolving problems. The power of many.

What are those critical skills and competencies? The competencies depend to some extent on the nature of the business — They are contextual. But the skills are usually quite transferable between organizations and across different industries and sectors of human endeavor. I’d propose the ten shown at the bottom of this mind-map as a good starting point:
Critical Life Skills

I’m going to be talking about this mind-map again next week when I invite you to help me, just for fun, ‘reinvent’ the education system. These eight skills and two competencies are critical life skills, not just critical employee skills. The eight skills are what are often called ‘soft’ skills because their direct application to everyday work is different for each of us, and not always immediately apparent, even to the learner. That’s why, even if we can teach them to our young people before they graduate, they must still be taught again, built on and practiced, in the context of the employer organization. Ideally they should be taught one-on-one, but at the very least they need to be taught as workshops, where the learning is immediately applied to real and current problems and challenges of the organization. Too often, when they’re taught at all, they’re taught in the abstract by outside ‘experts’ flown in for the occasion, who are enjoyable to listen to but who know little about the business or the culture of the organization in which they’re to be applied.

Any employee with these eight skills is of staggering value to any organization:

  • The ability to learn, apply instinct, think through and ask questions until the problem is really understood;
  • The ability to think critically and challenge the way things are done now;
  • Self-reliance and self-discipline to think for oneself and think on one’s feet;
  • The ability to take notice of, to perceive what’s going on in the world and in the company and in individual co-workers’ heads and hearts, and apply it empathetically and logically to the problems of the organization, not just in one’s own little niche but holistically;
  • The ability to think creatively, to use imagination and to apply it with other skills to develop in oneself the competency of innovation (process, product and technology innovation);
  • The ability to truly collaborate, to develop shared work-products better than what the team members could have produced working independently, and to draw on the collective wisdom of others;
  • The ability to competently assume responsibility (a hundred times harder and more important than assuming authority); and
  • The ability to master narrative, to tell stories, because that is far and away the most effective way to communicate, to teach, and to persuade.

Add to these eight skills these two competencies and you have an unbeatable combination, an employee, a human being of almost unlimited potential and capability:

  • The competency to make a living for oneself and for others, by establishing an enterprise, either spun off from or as an integral part of an existing organization; and
  • The competency to create community, to find the right people for a project and to bring them together so they work effectively as a team.

As I’ll tell you about more tomorrow, when I confide why my search for a ‘second career’ is taking so much longer than I thought it would, the only meaningful role I can see myself playing in large organizations today is in organizing and teaching these essential skills and competencies to everyone in the organization, and in suggesting how those skills and competencies can be applied, as I explained in my recent article, to solve the organization’s problems creatively, and letting the employees practice applying these new skills immediately and continuously.

Forcing employees to use awkward tools, coercive and frustrating technologies, and mandatory, inflexible processes (as so many organizations are doing today) demeans these employees, turns off their heads and their hearts, and drives a wedge between them and management. And teaching (or requiring) skills that employees don’t get a chance to apply is not only a waste of time and money, but demoralizing as well. Only by equipping employees with these essential ‘tools’, and offering (not mandating) processes that can be used immediately to apply those tools to creatively solve the organization’s most important intractable problems, can management bring out the best in their people, and truly bring about change in the organization.

Invest effectively in developing Critical Skills and you’ll reap Creative Solutions. That’s the best ROI you can get. It’s a simple business success formula. All it takes is managers with the vision, the courage and the trust in the untapped capacity and desire to do good work inherent in every employee, to capitalize on it.

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  1. Good article Dave. Interesting point about process improvement, especially since it seems to be ubiquitous today. I guess that means it’s on it’s outlived its usefulness. You should compare your critical skills to those of The Conference Board of Canada. There appear to be some similarities – should hire you to do an updated skills profile for the self-employed.I also like the last two skills because the performance is measurable and observable, and that is what is missing from much of our education and training. There are no written tests for these two, you either can make a living or you can’t. I’m looking forward to the rest :-)

  2. Jon Husband says:

    Good stuff. One of the issues is the structure of many organizations. Finding the role and the political acceptance of incumbents in that role, within reasonably-rigidly role specialization-defined organizational structures can be a real challenge, and an important impediment to what you are proposing.

  3. Derek says:

    While I agree with this list, unfortunately no company I have ever worked at or known about valued any of these skills, and in fact exhibiting a couple of these within standard top-down structures will get you fired quickly (as I have demonstrated in the past).Perhaps like the top 10 best companies to work for, you should get someone to sponsor a wide ranging evaluation and publication of the top 10 natural enterprises. Of course given my pessimism, if valuing at least of of these skills is a criteria, it might only be the top 3 companies at first (or maybe we’ll have to raise some money to award a NE price for first company in the world to adopt and value any of these skills beyond its executive staff).

  4. Tes says:

    Working for a Fortune 200 company that’s been dramatically turned around in the past 3 years, I’ve watched dozens of initiatives kick off, all with the goal of rationalizing process to improve return. The initiatives that succeed do so because: a) the team lead is intelligent, has integrity, effectively coaches members toward relevant critical skill development (ie, learning to use a tool or learning to think more broadly), and generates buzz; b) the objective has top-level sponsorship; and c) the team expeditiously achieves its objective (often imperfectly). A-C are intertwined. Sponsors stay engaged because the team is delivering; the team is delivering expeditiously under the tutelage of the team lead. Healthy teams output results greater than possible by a set of individuals. I think leadership apprenticeships (vs leadership training) would greatly benefit organizations.

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