Skills-Based Organisations
Success Depends on the Culture
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May 05, 2025
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The technical task of establishing a skills-based organisation calls for significant investment. However, the desired return on investment can only be achieved if the entire organisation – beyond just the actual tools – consistently focuses on skills. This requires the right corporate culture.
A Growing Focus on Skills
Companies find themselves in a constant state of turmoil, with geopolitical headwinds, market forces and macroeconomic factors to navigate on a day-by-day basis. With rapid technological progress due to digitalisation and artificial intelligence (“AI”), dynamic markets and economic uncertainties are a key driving forces. Businesses are embracing new strategies, business models and organisational structures to become more agile and innovative as a result.
Companies therefore need employees with future-proof skills. The Future of Jobs Report1 reveals that as many as 44% of all existing skills will change in the coming years.
Given the skilled labour shortage, however, hiring employees with the right skills is a time-consuming and costly process. At the same time, there is a growing willingness among many employees to change jobs. And where organisations have static, job-centered and hierarchical structures in place, it is very difficult to quickly deploy employees where their skills are needed and achieve a high level of internal mobility.
One of the reasons is that it has been hard to create any kind of transparency to the existing skills landscape and the interesting jobs for which certain skills are being sought– let alone link both with the skills that are of future relevance to the company when providing purposeful training for the workforce. This has now changed. Modern algorithms and the ability to process large quantities of data now provide the technical basis for a skills-based organisation.
A Skills-Based Organisation Offers Clear Advantages
A growing number of companies are therefore evolving into skills-based organisations that focus less on structures and hierarchies and more on the skills of the employees – their knowledge and abilities, their personal characteristics and, above all, their potential to develop and take on new tasks if they are given the opportunity. The aim is to take a holistic approach to dynamic skills management, which involves companies mapping their skills landscape by recording and evaluating their employees’ skills on the basis of a defined taxonomy. Skills tracking enables them to document how their employees’ skills are developing – through training and practical experience. Skills mapping is a transparent way for them to determine which employees come into consideration for certain positions and how they can be prepared for them by reskilling or upskilling.
The key advantages of such a skills-based organisation are clear: companies can flexibly develop employees from within their own ranks and assign them to roles in line with the needs of the business – in changing projects, for new and modified tasks or in new areas of the company. Moreover, employees will see that new development and career opportunities are always open to them, even in a dynamic context. This in turn makes them more committed, strengthening their long-term loyalty to their employer and enabling them to compete on the labour market in the future.
The Return On Investment Often Remains Disappointing
Charting the skills landscape – and tracking and mapping skills in particular – will generate a high volume of data. This can seem daunting at first, but many companies already have powerful digital tools, including HR platforms, at their disposal to manage this high amount of data. How this data can be used will vary, but there are opportunities throughout the entire employee lifecycle, including developing personnel and filling positions.
Companies generally invest a great deal of time and money in such systems and the accompanying data management already in the hope that they will be able to successfully manage their workforce on the basis of high-quality data. However, hope in a return on investment often fails to materialize, as many companies overlook the fact that a skills-based organisation is not created by gathering data, but by consistently gearing the entire organisation toward skills. The culture of the organisation, the behavior of employees, managers, leadership, those open to change, colleagues and decision-makers in recruitment must all be aligned in the common goal. In other words, it is “real life” that will ultimately determine whether or not a company is “skills-based”, rather than the introduction of a tool.
The Corporate Culture Needs to be Consistently Geared Toward Skills Management
HR business partners, hiring managers and recruiters must also be capable of seeing beyond what they think of an an ‘ideal’ CV and instead look to the skills within. They must begin adapting to applicants who do not have the ideal CV, but do have the suitable skill set, the potential and the willingness grown and learn.
Managers should serve as coaches and actively support their employees in their reskilling and upskilling endeavors. They should also actively want to, and be able to, release them to work in other areas with the peace of mind and confidence to know that they are in good hands with dynamic team structures and changing projects.
Employees should be urged to keep on breaking new ground, to never stop learning and to take on tasks in other areas or regions. They should no longer regard their career as only moving upward in regards to titles or heierarchy, but instead consider a sideways step that offers them new challenges, perspectives and opportuities to grow and develop new skills.
Generally speaking, the desired culture can only be established if everyone involved focuses their attention on the individual value contributed by the employees. This also includes being open to mutual, honest 360° feedback, together with the common understanding of continuous development as a goal. This must go hand in hand with the certainty of not overwhelming individuals or jeopardising business objectives by misjudging skills.
The Key is to Permanently Embed A Culture Geared Toward Skills
Each company needs to define its own skills-based organisation culture – the desired attitudes and behaviors that are right for the company to focus on skills. One principle that serves as a suitable blueprint is that of the growth mindset. A growth mindset is the shared and embraced conviction that our thinking can be changed and will find expression in our actions, skills and behaviors. It is the belief that everyone can learn in the right environment, which must be created and cultivated to make this possible.
Embedding a growth mindset in the company on a lasting basis is a highly complex process that takes patience as well as the right attitude to long-term change. The desirable behaviors that reflect this attitude vary, but include confronting challenges with confidence, facing setbacks with resilience and constantly learning from feedback as well both negative and positive experiences. The important thing here is that employees play the leading role and that managers take on the role of enablers and role models who share examples of the desired behaviors.
How Companies Can Turn Their Culture Into a Success Factor
Companies can take specific steps to establish the desired culture with some key practical measures.
- Analyse: The first step involves analysing the existing culture with a focus on the features of a successful skills-based organisation, identifying corresponding action areas and drawing up a timetable for cultural change.
- Explain: If all stakeholders are to accept a skills-based organisation and exhibit the desired behavior, it must be explained how such an organisation is structured and what additional benefits it offers them.
- Explore: In interactive workshops involving managers and employees, the company-specific challenges can then be discussed and suitable solutions explored.
- Involve: It is also important to actively involve teams or focus groups from across the business in the development and establishment of a skills-based organisation.
- Enable: It also comes down to educating and training HR, managers and employees so that they think, act and supportthe desired culture.
What ultimately counts is the realisation that skills are the new currency for the future viability of companies – but only the right corporate culture makes a skills-based organisation successful.
1: “The Future of jobs Report 2025,” World Economic Forum (January 7, 2025) at page 32
Related Information
Published
May 05, 2025
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