5 Principles for Building a Successful Skills Strategy

In today's business landscape, the ability to track, manage, and develop employee skills has become a cornerstone of influential people and business strategies. Companies that successfully leverage skills-based talent management strategies often see a marked improvement in their overall performance, with research showing that high-performing organizations use such strategies at nearly twice the average rate.   

However, implementing a skills strategy can be daunting despite its critical importance. It is often mired in theoretical discussions or overly technical jargon, leaving HR leaders and business managers feeling lost. 

The truth—there is no one-size-fits-all approach to developing a skills strategy. Each organization must tailor its approach to fit its unique business needs, technology ecosystems, and industry context. 

The journey to building a robust and effective skills strategy within an organization is multifaceted and requires a thoughtful, step-by-step approach. Here are the five fundamental principles that every HR leader and business manager should consider to successfully navigate this journey: 

The foundation of any successful skills strategy is a clear understanding of why your organization needs to focus on skills in the first place. The world of work is changing rapidly, with new technologies, shifting labor markets, and evolving business needs creating significant skills gaps. 

According to research, 57% of HR leaders believe that skills shortages are already undermining performance, a challenge that will only grow as the workforce evolves. By 2030, for example, the retirement of the baby boomer generation and the emergence of jobs that don't yet exist will further exacerbate these gaps. 

To tackle this challenge, organizations must define their specific business "why." Are you an energy company needing to develop green engineering skills? Or perhaps a life sciences firm seeking new ways to engage with healthcare professionals in the age of telemedicine? 

Whatever the case, your skilling efforts should directly align with solving your organization's most pressing business challenges. This focused approach ensures that your skills strategy is not an abstract goal & is also a targeted effort to enhance business performance and employee development. 

While the power of a skills-based approach can touch every aspect of the employee lifecycle, it's essential not to try to do everything simultaneously. Many organizations make the mistake of overloading their skills strategy with too many goals, leading to confusion and a lack of focus. 

It's better to start with training that helps your employees with a key skill that's important to your company's success right now. For example, you might focus on improving the quality of hires by identifying the skills that predict job performance more accurately than traditional criteria like educational background. 

You could also increase internal talent mobility by identifying and developing critical skills across different functions. By starting with a single, clearly defined use case, you can create a manageable scope of work, deliver value early, and build the foundation for expanding your strategy as your organization's needs evolve. 

Building a comprehensive skills strategy doesn't happen overnight. It requires time, patience, and a step-by-step approach. While it might be tempting to aim for a fully realized, skills-based framework from the outset, this can be overwhelming and counterproductive. 

Instead, it's more practical to start with small, manageable steps. Identify a few business-critical skills for your organization's specific function or role. Focus on creating targeted learning journeys or development plans for these skills before expanding to other areas. Remember, even modest improvements in skills can deliver significant business value. 

It's easy for organizations to get bogged down in the technical and intellectual aspects of developing a skills strategy. Questions about skills and competencies, the choice between external taxonomies or internal frameworks, and integrating skills across various systems can dominate discussions. 

While these issues are essential, they shouldn't overshadow the more pressing need to drive change and adoption within your organization. The primary focus should always be on what matters to your employees and the business. How can you get leaders to champion skills development? How can you integrate skills discussions into everyday development conversations? What steps can you take to ensure that hiring managers prioritize skills when selecting candidates? 

One of the biggest obstacles to developing a skills strategy is the desire for perfection. Organizations often wait until they have a comprehensive plan or until every question has been answered before taking action. However, this approach can lead to lost opportunities and paralysis by analysis. 

Instead, it's better to start with small-scale initiatives, gather feedback, and iterate as you go. By embracing ambiguity and focusing on continuous improvement, you can create a culture of learning & growth that aligns with both business needs and employee expectations.