Are skills enough to power tomorrow’s high-performance organizations?

This guest article was written by David Perring, Chief Insights Officer at Fosway.

Being a skills-based organization is one of the hottest topics for enterprise HR teams.

Talent availability has been one of the top drivers of innovation in HR for the past five years and more. Shifting demographics, emerging technologies, high innovation, and a switch to more agile working that drives faster change cycles have created huge challenges for businesses.

This has caused many in HR to rethink their approach to their people practices; the challenge being to help align people resources to work and nurture a pipeline of people able to power tomorrow’s organizations today, at the phenomenal speed of business. 78% of respondents in our latest HR Realties survey highlighted "skills management" as their highest priority for disruption over the next 12 months.

For many HR teams, that has meant investing in creating a people experience that’s ‘fit for a modern workforce’ - an experience that retains and attracts top talent.

The goal to have:

The best people, in the right roles, at the right time, doing their best work. Importantly, at pace and at scale – based on insights about what people have the capability to do.

It’s about optimising resources. It’s about skills intelligence. A transparent connection of people to opportunities. It’s about harnessing potential and leaving no people resource realized.

As a result, we have seen a tsunami of interest and activity centered on skills and talent mobility. The skills-based organization has been the "go-to" thinking about how we resolve the skills gaps that constrain businesses. All doing this whilst simultaneously creating the employee experience and career growth that delivers a great place to work.

BUT are skills the only thing that power tomorrow’s organizations?

It’s a question that’s often overlooked. But it’s an important question not to lose sight of as we pursue "skills," which seem to be promising a huge leap over our old HR approaches to managing talent.

That’s especially true when we see skills not as a lever to fill talent availability gaps and grow the employee experience, but as part of the answer to being the high-performing organization of tomorrow!

Now, let’s be clear – this isn’t pure guesswork on my part. Performance is back in the spotlight. Early indications from our HR Realities Research show HR professionals identified "organizational performance" as their No. 1 priority for organizations – nudging the availability of skills from its top spot for the first time in four years.

It’s not that organizational performance has ever really gone out of fashion, especially for business leaders, but the focus on this as a key driver for HR has crystallized as economic pressures and the pace of innovation move forward at an unforgiving pace.

As a result, this shift is changing HR priorities. It has given renewed purpose for HR teams to think about strategies and tactics to empower performance in a world of talent and skills scarcity.

We need a more balanced view of people than simply being skills-based

So, are skills enough to power tomorrow’s high-performance organizations? The simple answer is no.

Having people with the right skills in the right work (roles/jobs/projects/assignments/ gigs) at the best time, aligning people to their most capable work, and stretching them into roles – optimizing work is foundational. Skills-based organizations seem to be starting to achieve that, with all the efficiency and scale organizations aspire to.

But as human beings, we should also be careful not to just see people as part of a machine – a part to be placed, realigned, replaced, upgraded or worn out in the machine.

We need to remember not to just see each other just through a mechanistic lens. And that is one of my concerns about focusing purely on the skills-based organization – as this mechanistic view often dominates as the pursuit of skills starts to grow.

That’s because it's not enough just to see people as skills. We also need to think about their energy and resilience to power up and perform.

As human beings, how we feel influences the results we deliver. As human beings, we need purpose, energy, connection, relationships, engagement, and skills to be high-performing. We need a place to be human, to be humane, and to have the capabilities to get work done. Skills are not the only fruit for people success.

Organizations need to use engagement intelligence to energize the high-performing cultures of tomorrow

I’m not saying that being a skills-based organization is a bad strategy. I’m saying that forgetting what powers and motivates performance and only focusing on being skills-based is a weaker approach than also energizing and motivating our people. And that as much as we pursue skills intelligence, it is essential that we also pursue engagement and emotional/sentiment intelligence. Because without it your people engine has no charge to keep going, again and again.

What gives us energy is the moment of recognition, the sharing of feedback, and investment in helping someone’s continuous improvement or the removal of obstacles, as well as the listening and enablement of change from the roots up. It’s having the intelligence that enables dialogue and "nudges" the next best steps.

If we have both skills and engagement intelligence, we have a total picture, rather than half a picture, of what drives high performance. We need a total view: a full data set and a full set of insights if we are to truly understand what is powering performance. It’s about People Listening and People Intelligence.

The most important ‘people intelligence’ empowers employees and managers to make high-performance decisions from the bottom up

But this is not just about HR decision-making. The most important focus for people intelligence has to be the people themselves –managers and employees – because a high-performing organization is empowered by great listening and rapport.

And it’s our ability to use data to bring conversations to life where there are weak spots, facades, and agendas that can create the honesty and focus needed for powerful rapport across teams and drive the positive relationships that energize high-performing organizations. Be that from a sense of our shared purpose, mutual trust, team connection from feedback and support, the promotion of a growth mindset and coaching, or just the sharing of our passion and motivation for our work. The things that make work human. Sharing how we feel, encouraging conversations about our well-being and our engagement, and driving the right conversations at the right time with our managers, peers, and project teams. Raising our connectedness, supporting our alignment, nurturing our sense of belonging and building our resilience. Building a culture of performance.

Combining business intelligence and people intelligence is the real springboard for HR success

But for HR, it isn’t just about building a culture of performance. Intelligence is the key to being a strategic influencer. You can only really be a strategic influencer when you can share how what you do in HR enables business outcomes. You must also share the data, do the analysis, and have the storytelling that enables you to influence your business leaders.

Being data-rich, analytics savvy, and empowered by business intelligence and people intelligence is the secret sauce for being the successful HR team of tomorrow. And most of the HR leaders we speak to at Fosway get that. In our latest Fosway HR Realities survey, over 90% of HR professionals say high-quality data & analytics and the closer integration between HR & business systems is important to the future success of their HR operation.

What’s the reality today?

The reality today is that the connection of skills, engagement, and business data is bleeding-edge thinking that few have started to combine. It’s an emerging practice. But the world is changing fast, and there has never been a better time to start to reflect on where your HR team is in joining up that story, and talking to others to see how you might start to turn it into reality.

Where can you get started?

The most important thing you can do to get started today. The move to people intelligence is a journey, and even building momentum will take preparation and stakeholder mobilization before you even get to implement a solution. So, get started now by working your way down this to-do list, either as an HR leader or establish an HR working team/project to get things moving:

1. Develop a vision for people intelligence and how it provides gains or takes away pains from key personas in your organization – from employees to managers, HR, and business leaders.
2. Align this vision to key business outcomes, such as "What measures of success for leaders, managers, and employees show the positive impact of HR’s approach to achieving organization goals?"
3. Identify and prioritize key HR metrics and KPIs that align with your organization's strategic objectives.
4. Conduct a skills gap analysis within your HR team to identify areas where additional training or hiring may be needed to implement and use People Intelligence effectively.
5. Talk to your IT team about the architecture that will enable you to deliver that vision in the short term and how that should evolve in the long term. What’s available now? What needs to happen to build out infrastructure? How and who will help select and buy your people analytics solution, and how will it be run?
6. Engage your HR providers in learning how they can help you achieve your intelligence vision and empower your leaders, managers, and employees to make better decisions.
7. Check your existing data sources, structure, and accuracy to understand what might need to be cleaned to provide accurate data sources
8. Establish a data governance framework to ensure privacy, security, and ethical use of employee data, if it doesn’t already exist. This may mean engaging with Workers Councils and other employee bodies to make sure people don’t feel threatened.
9. Create a change management plan to help employees and managers understand the benefits of HR Intelligence and how to use the new insights in their daily work.
10. Implement a pilot program or proof of concept to demonstrate the value of HR Intelligence in a specific area before scaling up.
11. Develop a roadmap for integrating HR Intelligence tools and practices across different HR functions so that HR data is properly connected across HR silos – especially where there is a range of different data sources, including recruitment, engagement, performance management, learning and development, etc.
12. Develop a roadmap for integrating Business Intelligence and People Intelligence so you can create clear visibility between HR strategy and processes, organizational culture and engagement, people capability and energy, and work and business outcomes.
13. Establish regular review and feedback loops to continuously improve your People Intelligence approach based on user experiences and evolving business needs, so your work always delivers value.

The future will be intelligence-led

The future of all successful organizations will be based on their intelligence. The ability to act with intelligence and make the most intelligent decisions. If we want to be high-performing organizations – knowing and harnessing the skills and capabilities of our people is central to that. But if we want to be truly high-performing organizations, we must also be emotionally intelligent. Because what powers greatness in organizations and our people is not just about what we can do, it’s how we make people feel. And energizing our people can only be done if we know if we have the Total People Intelligence to optimize and energize the people's experience.

About Fosway

Fosway Group is Europe's #1 HR Industry Analyst focused on Next Gen HR, Talent, and Learning. Founded in 1996, we are known for our unique European research, our independence, and our integrity. And just like the Roman road we draw our name from, you'll find that we're unusually direct. We don't have a vested interest in your supplier or consulting choices. So, whether you're looking for independent research, specific advice, or a critical friend to cut through the market hype, we can tell you what you need to know to succeed.