IF YOU WERE to ask someone about their health and they told you that they ran a marathon 20 years ago, what would you think? Similarly, when someone asks you, “Tell me about your education,” how do you answer? Most of us immediately think about our formal education—the degrees or certificates we have earned. You might mention the university, college, or school you graduated from. Or you’ll respond that you didn’t go to college, or you haven’t finished your degree. Whether you’re 20 years into your career or 20 months, you’ll answer the question about your education through the lens of formal schooling.
Which is absurd.
Does your answer tell the story of all the learning you’ve done? Does it capture all the knowledge and experience—both formal and informal—you have accumulated since you graduated?
Of course not.
You don’t stop learning once you finish school. We learn the entirety of our lives, everywhere we go. But most of the time you are likely not very intentional about what you learn and how you acquire new knowledge. Instead, learning happens in an organic way: you learn a new skill by watching a peer give a presentation, or because you picked up a book or stumbled onto a TED Talk. In the expertise economy, it’s not important how you gain your expertise, just that you did. The challenge we are left with is how we make expertise count in meaningful ways, so we can use it to secure jobs, advance careers, and change the world.
We are all trying to keep up with what we need to learn. Accelerations in technology and science are outpacing the capacity of humans and society to adapt. While new methods are making old methods obsolete, adapting slowly is no longer sufficient. Pulitzer Prize–winning journalist and author Thomas L. Friedman writes about this concept in Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations.1 According to Friedman, our educational system is outdated: there are a million people around the world who can do our job, and because of this, we all need to engage in a lifelong learning process to acquire new expertise if we want to thrive in the workplace. Although countries, governments, CEOs, business leaders, and employees are beginning to feel the rate of acceleration and disruption, we are already behind.2
The problem is that the currency of our skills today is determined by the measure of a college degree, rather than by what you know or can do presently. In the United States, more people have college degrees than ever before.3 Today 33.4 percent of Americans have completed a bachelor’s degree or higher compared with 1940, when that number was just 4.6 percent.
Yet if someone attends university for just three years and does not complete the four-year degree, they don’t get credit for learning anything. Even if they do complete the four-year degree, does that really tell the story about what a person can do? Does it represent all the skills and expertise a person has gained over their working life? Recall David’s conversation with a woman who was 30 years beyond when she would have attended college. When he asked her, “Tell me about your education,” she considered herself to be uneducated because she didn’t have a formal degree. That’s a travesty.
The fact is that—with or without a degree—many of today’s employees are gaining skills and knowledge all the time. Furthermore, they actively want to quantify their skills. For instance, a skills and expertise survey conducted by team-building platform TeamFit4 shows that employees want to invest the time and effort to understand their own skills and their potential for their careers. The survey also shows that senior leaders and managers want to understand their employees’ skills to put people into the right roles—or, even more importantly—to put their employees in a position to help their companies solve the most critical problems in their industry.
Skills for a Nation
Being able to understand the expertise economy on a holistic basis—your country’s skills, your industry’s skills, your company’s skills, as well as the skills you have as an individual—is the currency of the future. The SkillsFuture program5 is a great example of a countrywide initiative to emphasize the value of skills. Launched in 2015 by the Singaporean government, the initiative provides all citizens with access to training programs to develop specific skills. The mission of the program is to create a rich talent pool of the most in-demand skills and provide a platform where workers can develop and display their expertise. By working in partnership with employers, unions, and professional bodies, the government acts as both an education provider and a broker to enable newly skilled labor to find work related to their skills.
The program also includes career and skill development programs for domains ranging from the energy sector, engineering and software development, aerospace, food service, finance, and many other skilled fields. The development and measurement of these skills is the secret sauce that unlocks the mobility of the workforce. In 2017, more than 285,000 people benefited from these training programs in Singapore.
Building Relevant Skills for a Company
Traditionally, CEOs have focused an inordinate amount of their time on company profit and loss. Increasingly, though, they are focusing on talent and education, realizing the impact on their company’s overall business strategy. At a recent Fortune magazine-sponsored event for CEOs on corporate brand-building, two of the key topics were “Closing the Skills Gap: Unlocking Opportunity in Workforce Development” and “The CEO’s New Imperative: How Corporate Culture Drives Innovation and Lasting Business Success.”
Business leaders are embracing the idea that it’s critical to have a skill-based business strategy for their company and that culture is integral in that strategy. The trend we’re seeing is that the most forward-thinking CEOs are prioritizing and taking ownership of learning as part of their company strategy. They are speaking publicly about the importance of learning and education in the workforce in general, and for their own employees specifically. It’s a key differentiator in recruiting and keeping the best talent.
So how are company CEOs tackling the big task of building relevant skills for their companies and employees? Bill McDermott, CEO of SAP, thinks that it’s never too late to learn. He’s looking at the issue from the view of the maturing workforce as well as the new college grads entering the workforce. Fundamentally, McDermott believes that age is irrelevant, and you are never too old (or young) to develop new skills and learn.6
McDermott recalled a story he heard from the Prime Minister of Japan about an 81-year-old woman who developed a software application while at a nursing home and it was so good, she started her own business. McDermott believes that “It’s never too late to retool, retrain, and get yourself focused on something new.” He applies this belief to the employees at SAP, many of whom have been with the company since its inception and are among his most valuable employees. He says that even if you are a new college grad, technical or IT skills are not the most important skills to have. McDermott believes soft skills and emotional intelligence are incredibly important. “What you need is empathy. The idea of being in service to other people is the greatest form of leadership.” When SAP is recruiting new talent, they look for a person’s desire to learn and a natural proclivity to do something well first, and then try to match the hard skills of the prospective employee with the opportunity.
McDermott believes strongly in developing his employees at SAP, “We started an academy. We hire our own, we train our own, we build our own.” What really stands out about McDermott’s leadership in helping his employees build skills, is that at most companies, training is consistently the first budget item to be cut. But for SAP, McDermott says “The one line-item in the budget that no manager in the company can cut is training because we believe that education is the key to everything.” For employees to hear their CEO say that is not only powerful, it’s a game changer.
Boeing is also making a big bet on employee learning. This year they announced they are investing $100 million in their employees’ learning and skills. They took an interesting approach to their initiative and actually crowdsourced more than 40,000 ideas from their employees worldwide. What their employees told them was that they wanted learning that was accessible to all employees at the company and that every person at every level needs to build skills for the future.7
According to Heidi Capozzi, Senior Vice President at Boeing, “we listened and read every single idea that was submitted. Our long-term plans represent a down payment on the future of our employees and tomorrow’s technical workforce.” Boeing will focus on programs that help employees grow and build technical skills, understand industry trends, and learn new tools and technologies.8
Boeing plans to launch a wide variety of workforce development programs and are partnering with Degreed to provide access to online learning and education, certification courses, and degree programs. As a huge enabler of Boeing’s growth strategies, they will first offer a program that focuses on digital literacy. It’s impressive the number of education and career growth initiatives Boeing offers including internships, boot camps, rotational programs, formal mentorships, and leadership training—the $100 million investment is above and beyond those programs they were already offering.
If you think company strategies focused on building employee skills are just for CEOs of technology companies, think again. Drew Greenblatt is the CEO of manufacturing company Marlin Steel Wire Products and he’s known the power of having as many employees as possible cross-trained in as many skills as possible for years. It’s given his company the flexibility required to respond to the constant changes at work and in the world. He’s evolved the company from one that makes wire baskets for bagel retailers to a fast-growing manufacturer of specialty precision metal fabrications used by auto companies like Toyota and multi-national defense contractors like BAE.9
Greenblatt has made a huge investment in the skills of his front-line employees providing them with the tools, training, and incentives that help them earn a strong middle-class living. Instead of competing on price, driving down wages, and offering fewer benefits, Greenblatt values his people and invests in their skills, motivates them, and then compensates them based on the new skills they learn and the proficiency that they’ve achieved in those skills. What he’s gotten in return are loyal employees who are learning how to operate computer-controlled routers, presses, and robots that have taken over some of the automated tasks.
Greenblatt is ahead of his time. While some are just starting to think about how humans and machines will co-exist in the workforce, he’s been doing it for years. His forward-thinking approach to investing in his people is not really new. According to Steven Pearlstein who interviewed Greenblatt recently, the principles Greenblatt follows come from business books published decades ago. But, for some reason, companies have forgotten some of the important business management principles. Greenblatt’s philosophy is “they do well, we do well; we do well, they do well. That’s the deal.”10
Individuals Focusing on Skilling and Reskilling
Of course, not everybody needs to work for a big organization to acquire the skills they need. Take Mikel Blake,11 for example. Blake grew up in a very traditional culture in Utah. She graduated from Brigham Young University (BYU) in 2006 with a degree in International Relations. She met her husband, David, the cofounder of Degreed, in college, and they decided to get married and start a family. While Blake was studying for the LSAT, David was interviewing at consulting firms across the country. David landed a management consulting job in Dallas, so Blake decided to put her lawyer ambitions on hold, and, after having her first child, she decided to stay at home to raise their family.
A few years later, a new job opportunity for David took them back to Utah and close to BYU. During the summer term, Blake, still feeling a career calling, decided to audit a computer science course. A professor at BYU agreed to allow her to sit in the class for the term, which fueled Blake’s interest in the topic. She enthusiastically completed all the assignments and homework and really enjoyed the experience, but she didn’t pursue it further at that time. Eventually, she and David ended up moving to San Francisco with their two small children.
Nearly 10 years after she got her degree at BYU, Blake realized that she wanted to continue to raise her family, but that she also wanted to pursue a career—she wanted to work and realize her full professional potential. But what did this mean? Pursuing law school? Computer science? Or getting a part-time job just to keep her busy? After much soul searching, Blake realized what she really wanted was a career. Yet she felt conflicted between working and being a stay-at-home mom. After a lot of deliberation, she finally came to the realization that her family would all benefit from her pursuing her passions to find a fulfilling career.
In 2012, Blake discovered Codecademy, an online, interactive platform that provides free online tutorials and classes. Through this platform, she was able to learn to code interactively in the evenings after her kids went to bed. She took another year off from coding when she gave birth to her third child. When she was ready to start again, she felt, given her limited hours, that she had gone as far as she could on her own, and once again, went online for some inspiration. There she came across a group based in San Francisco called MotherCoders whose mission was “To help women with kids on-ramp to careers in tech so they can thrive in the digital economy.”12 That program really helped Blake become oriented to the tech world and all the different options available. When she completed the program, she felt incredibly energized to keep going.
Eventually, Blake enrolled in a full-time development boot camp called Dev Mountain. Over the course of three months’ full-time study, she learned software development to prepare her for a coding job in tech. However, the course didn’t guarantee a job at the end of it—after all, it was only three months; not only would she be competing with her fellow boot camp participants, but also with people who had four-year computer science degrees.
Once Blake completed the boot camp, she took an internship for a year, coding real projects, which proved to be invaluable experience. Thanks to her mentors and the variety of projects she was assigned to work on, she was able to figure out which area of software development she actually wanted to focus on. Not long after the internship, she was hired on as a contractor and then a full-time position as a web developer.
Blake’s career journey is both inspirational and relatively atypical. Ultimately, she took a very untraditional path with many starts and stops to develop her expertise and build her career as a web developer. Through her years of learning, Blake found that she could have a fulfilling career and raise a family. She also proved to be a great model for owning your own learning and career.
Hiring Practices: From Traditional to Skills-Based
Whether it’s building skills for citizens of a nation like Singapore, helping employees build new and emerging skills within a company like Boeing or SAP, or reskilling yourself to pursue a new career like Mikel Blake, it’s not easy to talk about skills as a currency because there is no standard language around skills.
This is because traditional hiring practices don’t recognize skills as the key to recruiting and building internal and external talent.
For instance, imagine you’re hiring for an open position inside your organization. What parameters do you use to make a hiring decision? Chances are you base it solely on a person’s qualifications. Assume you have a great pool of applicants. How do you winnow the field down to just a few? Which person ultimately receives an offer?
Quite possibly you have technology that sorts resumés, cover letters, or LinkedIn profiles for certain keywords and phrases. These tools are designed to narrow down the mass of online job applications. After initial filtering, you are left with a couple dozen applications, which are maybe reviewed by an internal team or person, who then selects several of the applicants for initial screening interviews. That process narrows the field to three or four. One or two applications go through the full series of interviews, and ultimately an offer is sent out.
When we hire people, from within a company or externally, the question we should be answering is Can this person do the job and how well? In other words, we should be assessing people’s abilities through the lens of skills rather than more conflated signals like the company a person worked for or a prestigious school they attended. Skills are the things we can do. Mastery is how well we can do them. Can she program in Python? Can he think critically? Can she present? Can he analyze? If so, how well? Every job we ask someone to do is a compilation of individual skills. Skills are the building blocks of a job, and the building blocks of a company. When we analyze our talent—both internally and externally—we should be looking at the skills people have and how well they have mastered those skills.
Instead, we tend to use the following proxies for skills in the labor market:
Job titles
The problem with using job titles as signals of expertise and skill is that they are not ubiquitous. The meaning behind a job title varies greatly from one company, industry, or geography to another. When considering job titles, think about the skills you think a director has that a manager does not. Are those correct assumptions?
Pedigree of university
Granted, where a person went to college often creates a certain impression—intelligence, perhaps, a specific set of values, a sense of stick-to-it-ness. It can also indicate the type of training a person has received. But hiring decisions cannot be based on where someone went to school because, overall, it tells you little about the candidate’s current portfolio of skills.
Logos on a resumé
“Wow, this person worked at Google; he must be amazing!” Well, maybe, but maybe not. Logos on resumés give no indication of what people can do and how well they can do it.
References
Character references are a good thing, but it is important not to conflate positive references with skills. A reference may be great when it comes to validating a candidate’s work ethic or honesty, but it’s not the best way to prove the degree of financial planning and analysis skills (FP&A) or critical-thinking abilities.
Interviewing skills
While interviews are essential to the hiring process, they don’t tell you everything about a candidate. For example, some people interview very well, only to founder once the job is theirs. Don’t confuse magnanimity with ability.
GPA/SAT/ACT
Believe it or not, some companies still use GPA, or scores on standardized exams, as signals of expertise or potential inside a company. These measures were never meant to signal expertise, and so they also fall into the bucket of proxy measures for the thing we care about. In other words, just because you score well on a test doesn’t mean you can successfully do a job.
For us to solve the labor market problems we have in this economy, we must begin speaking the language of skills and stop caring about pedigrees, logos, time spent learning, test-taking ability, interviewing skills, or anything else. The first step to speaking this language is to think of your company as its own labor market.
Your Company Is a Labor Market
While your organization is part of the labor market at large, it’s also a microcosm of the labor market. You have a labor pool, with open positions to be filled, in which you recruit, fire, promote, analyze, and assess your talent. The labor market is made of a supply side and a demand side. The supply side is comprised of the workers and those who prepare those workers for the labor market, including higher education establishments, professional associations, apprentice programs, boot camps and so on. The demand side of the labor market is the jobs to be done to help you achieve your organizational goals. In addition to companies, there are also brokers, job boards, recruiters, and influential people that match people to opportunities.
The big advantage companies have is that it’s a completely vertically integrated market—you own the entire process—and so you can drive a level of efficiency that the overall labor market would be very hard pressed to match.
Creating efficiency inside your company’s labor market pays enormous dividends if done correctly. Imagine the business outcomes you could drive if you knew every skill every person has inside your company right now. How quickly could you deploy resources to solve a problem? Who are the most qualified people to join the innovation task force? Where should your organization be developing skills against gaps? Who are the best people for the VP role? How well are new managers managing? How much could you reduce recruiting costs if you knew you were hiring against skills and not logos on a resume? How much could you improve employee retention? And, how important is it for your business to begin taking the measurement of skills seriously?
Three simple questions can guide your progress toward being able to speak the language of skills:
1. What skills do we have?
2. What skills do we need?
3. What could we do if we had this information at our fingertips?
If you can’t answer these questions, then you are operating with an inefficient internal labor market and relying on more opaque signals of skills.
Skills as a Currency
The labor market transacts in much the same way as any other market does, using currency to translate relative value to make the market more efficient. If skills are the unit of value in the labor market, then professional credentials are the currency. And there’s the rub. There are so many types of academic and professional credentials in the market today that the market cannot transact with them effectively.
The market is flooded with different credentials: professional designations from associations (e.g., CPA, PMI, CAN), micro-degrees, nano-degrees, company-specific certifications, open badges, and of course the traditional college degree.
The problem with these credentials is that they all represent different things to different people. Some measure the completion of courses, while others measure knowledge; some measure time spent doing something, while others are simply meaningless. But if you’re hiring or promoting, how do you value a Microsoft MSCE certification against an HP Master ASE Storage Solutions Architect Level 2 open badge? Or a nano-degree from an online course provider? What skills do these represent? Do they represent skills or knowledge at all?
Right now, not enough companies are thinking about talent in terms of skills, depending instead on formal degrees. More companies need to find better ways for people to talk about the skills they have gained.
It’s alphabet soup out there. What we need is a single currency to measure any skill at any level, and provide workers, managers, and recruiters with a common language in which to interact.
Degrees Plus Credentials
It doesn’t have to be an either–or proposition when it comes to degrees and credentials. Both can be valuable, but only if you can appreciate the skills behind them and understand the financial tradeoffs. Salman Khan believes that learning credentials go far beyond the traditional degree, especially given the cost of Ivy League schools. Khan said, “A student pays $200,000 to get a degree now, how do you justify that? The university might validate the cost through the quality of their teaching or their impressive campus, but they don’t talk about the learning experience; and the students may argue that spending $200,000 and four years of their lives is worth the credentials at the end of it. There’s definitely something broken when a large amount of money is changing hands and the buyer and the seller are selling and buying two different things.”
If you could have a Harvard education or a Harvard degree, but not both, which would you choose?
Khan believes that another problem with traditional formal education is that it doesn’t actually showcase to employers what you actually know. The traditional resumé goes some way toward conveying your learning experience. But some of it could be made up or grossly exaggerated. That’s why Khan Academy is focusing on encouraging its participants to create portfolios that show the extent of their capabilities. These portfolios would include videos of people giving speeches, leading a project, or show reports from their peers or faculty advisers talking about what they were like to work with. This holistic approach is key to tapping into what colleges and employers are looking for today. As Khan said, “Colleges and employers today care about the portfolio of work, care about what other people think of the candidate, and have certain baseline expectations around content mastery. They also care about ‘worldliness’ and if you can show that worldliness in action.”13
Skills Build Collective Intelligence and Ability
If skills are the building blocks of potential within your organization, then think about:
• The value you could derive if you knew what all of those skills were
• How you could apply all that collective knowledge
• The potential your company really has
• How efficient your company would be
For example, Janice has worked for a software company in product development for nearly a decade and has developed strong product design skills in her role. From time to time she is brought into key sales meetings with prospects to articulate nuances of the product and to outline the product road map. When an internal job opens inside the sales organization and ends up being filled by an external candidate, Janice goes to HR to express her frustration at not being given visibility into that opportunity or indeed the chance to interview for the position.
She expresses her desire to move into other fields besides product design and how she would have really valued the opportunity to move into sales, particularly when she already has a good reputation within the sales team.
If this situation happens a few more times to Janice, the outcome is predictable. Eventually, she will leave the company to find an opportunity that better matches her desired career path.
Instead of losing valuable employees like Janice, consider the following alternative: imagine posting a job and then running a report to see the pool of next-most-qualified candidates based solely on how well their skills match to the job opening. After seeing the report, you proactively talk to managers and let them know a person on their team might be a good fit—before running a recruiting process internally.
Then, you interview candidates to gauge their missions, visions, and personal values. Thanks to your verified skills report, you can also use the opportunity to assess the levels of team chemistry. After meeting with candidates from finance, marketing, operations, sales, and product, you hire someone from the marketing department who brings experience and perspective that creates empathy and brings a new dynamic to the sales team. Since the candidate has all the company history and context, she hits the ground running. Others inside the company who didn’t get the position learn that the company is now looking to hire high performers with specific skills from within—something that motivates them to continue to perform at high levels and develop more skills.
Each person in your company comes with a unique portfolio of skills and level of mastery. And collectively, your company also possesses a unique skill genome. Until you measure these skills, they are nothing but intangible assets that cannot be managed, deployed, grown, or leveraged to improve, adapt, innovate, or compete in the global market.
Measuring Skills
All organizations need to set standards to create a complete picture of how they are measuring and growing skills in particular roles. For example, when considering the role of a client implementation specialist, they could ask the following questions: What does it mean to be a successful client implementation specialist? What skills are required for the role and at what level of mastery? There are myriad taxonomies and tools available to help organizations find the answers to these questions by mapping job roles to skills. In fact, more and more companies are turning to AI and machine-learning technologies with relational databases to make recommendations based on near real-time labor market and jobs data.
According to the Lumina Foundation, “A lot has been written about the impact of technology and whether robots and artificial intelligence will supplant humans. Far less has been said about the opportunities that advances in technology will create for building new credentialing systems that can capture and validate all forms of learning.”14 The idea that we can validate all forms of learning is becoming widespread, and that is the goal.
Many companies are also setting mastery levels for the skills they’ve identified for each role. The Lumina Foundation’s Connecting Credentials rubric is a popular eight-level rubric that is applicable to any skill and serves as a useful way to set standards and measure mastery. Once those standards are set, you can train against and measure the results of your efforts.
Telus International, a global telecom company, is using the Lumina rubric built into Degreed to measure the specific skills obtained by 300 employees taking part in a formal training program. Following the program, which includes a combination of several modalities of learning, project-based learning, and feedback sessions, everyone goes through a process to specifically measure and certify their skills.
The benefits of this process are twofold: individuals receive certifications for the skills they have gained, while the company gets a better idea of the effectiveness of the training program and the skills obtained for that team. These results are then benchmarked against the job roles for each person to see how well they map onto the expectations and needs of the business. As this program continues, the organization will be able to benchmark the development of skills over time, resulting in a rich data set that provides a mapped genome of skills inside the company that few others could match.
A growing number of companies like Telus recognize the massive value of the roles skill development and thoughtful measurement play when it comes to defining job success.
Skills Quotient (SQ)
Once these skills have been measured, then you can start to leverage the information to create a new dynamic in the company. We propose using a new standard we call the Skills Quotient, or SQ. The SQ is the skills you have divided by the skills you need (then multiplied by 100). Here’s how you calculate an SQ:
1. Choose a role that you care about.
2. Identify the skills that matter for that role.
3. Identify the levels of these skills expected for that role.
4. Add up the levels in these skills expected for that role.
5. Measure your own level in these skills.
6. Add up your levels in these skills.
7. Divide the skills you have by the skills you need and multiply by 100.
For example, let’s say you’re a technical writer inside a software company. The company has outlined nine critical skills for you to master, each with a target mastery level (we’ll use the Lumina Foundation’s eight-level rubric for leveling), as Table 8.1 illustrates below:
Table 8.1 Lumina Foundation’s eight-level rubric for leveling
| Skill | Target Mastery Skill Level | Actual Verified Skill Level |
| Business Communications | 5 | 4 |
| Research | 3 | 3 |
| Time Management | 4 | 3 |
| Software Testing | 3 | 4 |
| Writing | 7 | 6 |
| Project Management | 3 | 2 |
| Editing | 5 | 4 |
| Computer Skills | 6 | 4 |
| Communication Skills | 5 | 6 (caps at Target Level = 5) |
| TOTALS | 41 | 35 |
In this example, your SQ for the role of technical writer at the company is 85—calculated by dividing the skills you already have (35), by the skills you need (41) and then multiplying by 100. You’ll notice the caveat with “Communication Skills” where in this example, your skills exceed the target mastery skill level; in these cases where you have exceeded the target, the calculation never exceeds the target level.
An SQ of 100 means you have a perfect match between the required skills for your job, and the skills you have mastered. Of course, a score of 0 means you have none of the skills required for a particular job. Yet, it’s worth noting that the SQ is always contextual. For example, you may have an SQ of 0 for the job of microbiologist, since you likely hold none of the skills required, but it does not mean you don’t have any skills at all. The level of skills you have very much depends on the context in which they are applied. You wouldn’t want to rely on skills that you can’t use—just ask the people with PhDs who drive taxis or tend bars or people who’ve started to lose their jobs to automation.
The goal of the SQ is twofold: first, to measure how well-equipped a person is to perform at potential, that is to say, to measure the complete abilities of a body of workers against the work to be done; and second, to signal the potential threats and opportunities within an organization. For the former, it signals how ready you are, in the short-term, to deploy your skills against any of the initiatives or projects in your company. A score of 100 means you’re as ready as can be; a score of 120 would mean you have lots of untapped skill in your organization; and a score of 50 means you’re severely lacking in your ability to meet the demands you already have.
The second purpose of SQ is as a leading indicator of how engaged or frustrated your workers might be. For example, if you’re in a role that requires eight skills at a specific level of mastery, and you have all those eight skills at the right mastery level (an SQ of 100), what are the chances that you’re highly engaged in your work? Or conversely, what if you’re in a job that requires those same skills but you’re only proficient in two of them (an SQ of 35, for example)? You’re likely going to be frustrated and probably end up failing, quitting, or being fired. People want to grow and to be challenged, but they need to have enough of a baseline to succeed as well as enough context to get to the right answers if they work hard. So, while a score of 100 might sound positive for the company in the short term, it also signifies lack of individual growth, which will have a negative effect on the company in the mid- to long-term.
Instead, organizations should aim for a balance between the company’s need for adequate bench strength, and the ability to achieve business results and growth opportunities for individuals. An SQ range of 70–85 for most companies is ideal for creating both balance and tension. This score allows enough depth for people to be successful in their jobs while still providing opportunities for growth at individual, team, departmental, and companywide levels. In other words, this SQ range enables your organization to burn orange-hot—hot enough to make great progress and challenge people, but not so hot to burn people out, or so cold that they lose momentum.
It’s also worth noting the business benefits to using SQ as an operating function. SQ answers questions such as What skills do you have? What skills do you lack? It gives you the data to make business decisions based on your skills. The SQ can be used to measure growth of the:
• Labor market
• Industry
• Company
• Department
• Individual
It’s something that’s never been possible before, but in today’s knowledge economy, what could be more powerful?
How to Use the Skills Quotient (SQ)
This section contains several hypothetical case studies of how companies can use SQ in a practical way to help understand the skills they have versus the skills they need.
Job seeking
A skilled retail manager works for a company that has succumbed to pressure from a large online retailer. Since the entire industry is contracting, there just aren’t enough management jobs to go around. The manager works with a placement agency to do a comprehensive skills assessment, which measures the skills he has developed over the past 27 years. The agency then calculates his skills quotient against a large database of open roles, then recommends that the manager apply to those roles with a skills quotient above 70 with the highest starting salary.
Recruiting
A solar company needs to hire 200 solar installers across several states, but it has thousands of applications. Since it is a forward-looking company, they don’t want to exclude people who don’t have college degrees, but they still need to filter this list down to those who are most qualified for the role. To find the most suitable candidate, they direct each applicant to a skills assessment portal that measures their skill levels against the skills necessary for the solar installer role. The solar company measures the skills quotient for each applicant and interviews those with the highest values. Since all applicants’ measurements are recorded in a lifelong transcript, even those who do not get the job can walk away with evidence of their skills that will help them in their quest for another job.
Internal recruiting
At a 150-year-old traditional tech company, an experienced VP of sales has decided to retire without a clear succession plan in place. However, the sales organization recently did a full skills inventory as part of their annual development process, where each member rated themselves against a set of relevant skills. As a first pass, this company calculates the self-reported skills quotient for each member against the VP of sales role. Those who rank highest then go through a rigorous “Skill Certification” process for several of the most important skills, to verify that their self-assessments are truthful and unbiased. One of these high achievers is chosen to fill the vacant position, and the remainder leave with clear direction as to where they need to grow to be ready for the next big opportunity.
Contract assignment
A large consulting firm needs a better way to match employees with time available to open contracts. Since this is their core business, they’ve already assessed the skills their employees have by tying voluntary development of high-demand skills to significant incentive bonuses. To improve the contract assignment process, they treat each contract as a role, identifying with the stakeholders the type of skills and skill levels needed for that role. They then calculate a skills quotient for all available employees, looking for values close to 100 for maximum customer satisfaction.
Promotion list
A multinational manufacturer of products focuses heavily on promoting top performers, doing their best to ensure that each high-potential employee has opportunities for growth somewhere in the corporate family. Since all top performers go through a comprehensive skills assessment and regularly update their progress, the company calculates the SQ for each top performer against their current role. Anyone with an SQ above 90 gets flagged for immediate review. Why? Because these high performers will likely look for their next growth opportunity elsewhere if they aren’t given one within the company.
Reskilling initiative
A large global consulting company sees emerging trends in data science and decides they need to provide service professionals who can fill those roles. However, there just aren’t enough data scientists around to hire the thousands needed to fill customer demand. Since the company needs to know what skills their employees have to match them to contracts, they have a skills inventory integrated into onboarding, with ongoing skill measurement playing an integral part of their talent development plan. With this data available, the company measures a skills quotient for each employee against a data scientist role, quickly identifying whom they could develop to fill the gap.
Mentoring program
A Silicon Valley social media company has a loose matrix organization and has decided to promote mentoring across the company. For each employee, the company identifies the skill with the largest deficit between their current skill level and the skill level expected for their role. It then identifies three people in the same location with both a higher level in that skill and the largest surplus between the actual and expected skill levels for that skill. These mentors and mentees then meet in person to see who would be the best personality fit. The mentees make rapid progress getting up to speed, and the mentors derive satisfaction from using an underutilized skill to support someone else.
Skills inventory
A software tech giant wants to identify which skills training would be of most benefit to employees. As part of a companywide initiative, every employee in the company is asked to identify their five strongest skills and rate their current level in those skills. In addition, the managers in the company are responsible for defining the expected skills and skill levels needed for each role, so that these requirements can be included in each job posting. With this information available, the company adds up the skills people have and divides that by the skills people need for each skill across the organization. They then subtract these skills quotients from 100 and multiply by the number of people who need each skill.
Sorting the results from greatest to least quickly highlights the specific skills where employees could use additional learning. The company then searches a large content aggregator for those skills, filtering by the skill levels that most need improvement, and finds high-quality content that meets many of their needs. For the remaining needs, they use internal learning design experts and their own subject matter experts to create custom content, perfectly suited to their own business needs.
Training assessment
The executive team at an online marketplace chooses management quality as their top development initiative for 2020. To move the needle, they’ve decided that each manager will go through several intensive training programs with follow-up spread throughout the year. At the beginning of the year, a random sample of managers goes through a rigorous evaluation process, measuring their levels in five key management skills. At the end of the year, they repeat this process, applying everything they’ve learned. The company calculates their average skills quotient at the beginning of the year and at the end of the year, showing the real impact of the training program on the overall quality of management at the company.
Degree programs
A prestigious technical university has identified a critical set of skills and skill levels that they want all graduates of their supply chain management master’s program to achieve. To accomplish this goal, all graduates go through a rigorous skill measurement process for each of these critical skills as part of their last semester before graduation. Those skills that have the lowest actual levels relative to their expected levels get extra attention, with relevant projects incorporated into several core courses. Over time, the university calculates the skills quotient of each graduate against the target skill set to track as program quality improves.
Summary
Making expertise count in the knowledge economy is gaining more traction from all sectors—universities, companies, and individuals. We all want a better way to be able to talk about what we know and what we can do. A common language of skills will help us all communicate effectively so recruiters can screen candidates better and managers can hire the right talent, so leaders can get the right people into the right jobs at the right times, and so individuals have a way to navigate their careers over their lifetimes.