The New Skills-Based Paradigm

The CEO of Inorganic, Paolo DiVincenzo, explains, "Products built in 2022 already feel dated. What you're building today will probably feel old a year from now."

Why it matters: For businesses, the new competitive advantage is speed. Large organizations are primarily interested in acquiring companies with a culture of rapid execution ingrained in their DNA.

• The key question they often ask is, "How quickly can you deliver?"

Between the lines: The shift in focus from sustainable technology to rapid deployment is due to the accelerating pace of change.

• We are on the verge of a new era in business, akin to the onset of the Industrial Revolution.

• However, this time, it is about transforming how humans work.

Zoom in: Organizations are now fundamentally restructuring their talent strategies and corporate culture based on a skills-first principle. 

• In a Skills-Based Organization (SBO), the organization develops a comprehensive understanding of the skills required to meet its strategic objectives and inventories the skills present in its workforce.

• This becomes the foundation for all decisions regarding talent deployment, development, and compensation.

By the numbers: Research from Deloitte indicates that organizations adopting a skills-based approach (SBA) are 57% more likely to be agile, 107% more likely to allocate talent effectively, and 98% more likely to retain high-performing employees.

• The World Economic Forum (WEF) predicts that AI and automation may displace 85 million jobs by 2025.

• However, the WEF anticipates the creation of 97 million new positions by 2025 and 170 million new jobs by 2030.

The big picture: Enterprise resource planning (ERP), human capital management (HCM), and various line-of-business systems that support modern enterprises are typically structured around hierarchical roles.

• This structure poses a significant challenge to the adoption of a skills-based approach.

• As a result, companies are urgently trying to implement new systems that facilitate a Skills-Based Organization.

Go deeper: Interested in learning more about SBOs, the role of AI, and how to get started? Reach out to Todd Moses & Co.