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Building and governing the skills supply chain p2

Businessman Hand Draws Target Customers Diagram
Laurence Collins

In part one, I introduced the concept of how the skills supply chain will be critical to thriving in the future of work and drew the parallels between it and traditional supply chains. Work and workforces are increasingly fluid. Perspectives around what constitutes work, what to pay for it and who (or even what) should do it are changing.

Just like a traditional supply chain, there is a need to convert raw ingredients (in this case, talent or skills) into an added value service or product for your organisation. Then there’s the costing of each component in the supply chain and ensuring that everything you need is in the right place, at the right time.

Building your skills supply chain

Let’s start with sourcing

You need to find all of the total ‘raw’ skills (or if you like ‘ingredients’) needed by your organisation. Then apply them to work that creates outputs that can be sold to generate value. It also needs to provide the right customer experience to gain repeat business. But before this can be done the organisation needs to define the work that’s needed, assess if they have the skills required, acquire what they are missing (in a cost-effective way) and apply them to tasks. All of this whilst also factoring in employee engagement.

This simply can not be done by one function or a specialist team. It needs to involve cross-business collaboration. The way in which skills needs are understood and subsequently sourced will underpin whether the eventual outcome adds to the enterprise, or not.

Costing by unit

Another similarity between traditional supply chains and the skills supply chain is the concept of costing and pricing by unit. Work is atomised into smaller components and rates of ‘charging by task’ are applied to packages. Then, a new commercial model that measures worker economics begins to emerge.

This has the potential to disrupt traditional approaches to job sizing and salary benchmarking. It could also expose the reality of the gender pay gap in even more granularity than it has already. So even if the concept of a salary does not disappear overnight, the ability for business leaders to check and monitor the cost of labour relative to task inputs and business outcomes will become a new addition when decision making.

Multiple inputs

There are usually a number of stakeholders involved in your supply chain. Conventional supply chains require input from multiple departments, including procurement, legal, logistics, IT, marketing, and operations.

Similarly, your skills supply chain needs multiple inputs. It cannot simply fall to the HR team. Everyone across your organisation needs to be invested in your skills supply chain – including department heads, your board members, operations and (of course) your HR department.

How to implement the skills supply chain

Up until now, we’ve mostly discussed the concepts behind the skills supply chain. To practically implement your skills supply chain, you need to do some groundwork.

  1. Know your parts: Understand in fine detail all of the moving parts within your skills supply chain. Notably where skills are demanded, how they should be sourced and efficiently delivered. It is important to think through and build out new processes for this.
  2. Link together: Create the ability to link skills to value and prioritise different projects and teams. One employee cannot simultaneously deliver two tasks at exactly the same time, just like a footballer cannot deliver a corner and head it goalwards at exactly the same time. Decide what comes first when optimising performance and value.
  3. Culture: Change the culture around the responsibility for the organisation of work. It’s no longer just a job. Leaders must show more dexterity in managing tasks and outcome. They don’t just have to consider their team’s outputs but also an individuals’ engagement with different tasks. How is work divided and how can you ensure that the right people are working on the right things?
  4. Futureproof your supply chain: It will need to respond to changing needs over time. Build in agile processes that can adapt when required.
  5. Gain buy-in: Everyone needs to be invested in your skills supply chain. Your proposals need to be acceptable to your workforce.

Your supply chain needs governance

By now, you’ll have a good idea about the skills supply chain and how it can be implemented within your organisation. However, there is one last step to this process. Because the skills supply chain requires a fundamental shift in the way people work, it needs to be monitored and governed correctly. Especially in its early implementation stages. Everyone needs to be on-board with the new way of working. Otherwise, it simply won’t work.

Teams for differentiation

This cultural shift in perspective can be illustrated well by England’s recent World Cup team performances. For years the science and technology behind elite football teams had largely moved in a uniform direction for everyone.  Accept for the odd tactical innovation which may create a differentiator for a few games until the other teams figure it out and replicate it.

So in that sense football is an industry that is relatively free in market terms. That means that the only way England could have progressed to a semi-final, in the painfully obvious absence of creative skill or differentiating scientific philosophy, is by organising the remaining skills to work in such a way that they achieved the best possible outcome.

The fact we made a semi-final for the first time in 28 years was due to a couple of factors:

  • Firstly the work we had to do to get past the opposition in our half of the draw was of a level that was inside the tolerance of our overall skills mass.
  • Secondly, the skills we had were deployed to offensive work that would have the most impact potential.

Hence ball heading at corners became the nation’s new and most revered skill. The focus of the England team in this world cup shifted to team optimisation. How can you organise and optimise a team effectively so that it produces the best work possible? Gareth Southgate mastered this and so (nearly) brought football home again.

Benchmarking for progress

For organisations looking to gain an edge in the future, a well executed skills supply chain is a must. The only way to differentiate your organisation is to arrange and manage the skills of your total workforce in a way that drives superior value.

That requires organisation-wide buy-in. It also needs checks and balances. You need to understand and measure the old way of working, and to then use it as a benchmark to identify the progress that your organisation has made with the new supply chain.

The only way to effectively measure your supply chain’s effectiveness, and to roll it out across your company, is to have everyone on the same page. Internal communication, transparency and openness is essential. As is feedback from employees (and the contingent workforce) on how the new work method is performing.

One difference

Of course, one key difference between a traditional supply chain and the skills supply chain is that we’re not dealing with farm produce. People are far more complex and diverse. A degree of marketing needs to be done with your stakeholders when you first develop a skills supply chain.

Don’t lose sight of the humans within the chain either. People aren’t robots and we cannot simply discount how they may feel. A good skills supply chain balances people’s skills and experience, with more emotional information such as their career ambitions and interests. Align people with work that they are interested in and obviously they will work much better.

The satisfaction of your workforce is a key metric for your supply chain. Likewise, you can consider employee retention and qualitative information on how people feel about their roles.

A supply chain set for the future

The skills supply chain is a relatively new concept, but it isn’t going to disappear anytime soon. As we move into a new era of workforce optimisation, organisations need to embrace different models of working. More people will join the contingent workforce and more people will see their work augmented by technology. Businesses need to prepare for this.

The only way to manage your many different options and combinations for work production is to think of it as a supply chain taking you from skills input to superior outcomes – but without losing sight of the worker behind each task.

In our next article, we delve further into the details of the critical elements that create value through the skills supply chain and specifically, how insight driven decision making is the key to optimisation.

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