One of my favourite topics is "people-centric strategy", however, often when I use this wording, I receive quizzical looks from people and a "tell me more" response. In my opinion, this is one of the most critical topics for leaders today, but it feels that many businesses are still very far away from having people-centric strategies to guide their growth. So in this first of two blog posts, I will bring the concept to life and build a case for why this approach is business critical. In the second post, I will then share some practical thoughts and ideas about what businesses of different sizes can do to make it happen.
If your business's growth, success or even survival depended on a specific raw material, component part or certain supply chain capabilities, as a leader, you would put a significant amount of your energy and resources towards ensuring that these mission-critical elements are secured. If you're faced with a shortage in the market, you'd work with your procurement team to find alternative suppliers, you'd work with R&D to broaden the specification or look for alternative solutions or even invest money in production capacity or backward integrate part of the process. My point is, whatever the "business" challenge, overcoming the obstacles that stand in the way of growth would be a strategic priority that would result in a significant amount of time, resources and money invested in a solution. I'm sure that none of this is new to you.
However, when the challenge is related to people and skills, it often feels like the same principles don't apply in organisations. And that's despite many organisations claiming that people are their biggest asset.
You just have to open the newspaper, watch the news or in fact walk down your local high street to realise the huge skills and staff shortage that are all around us today. Whether it's reports about 100,000 vacancies in the NHS, a record number of people exiting the labour market and "staff wanted" signs everywhere you look, the staff and skills shortage is now more obvious than ever.
Last week, I attended a networking breakfast hosted by the Institute of Directors and the table discussion topic was about the capability skills gap. I heard anecdotes from a fellow participant who works as a strategy consultant and sees clients having to give up on strategic choices and ambitions because they just can't find the staff or have the necessary skills. In my own work, I see more and more businesses putting a much bigger emphasis on people-related topics but for every business that does, I'm sure there are three that don't.
For me, this is a case in point that we need more "people-centric strategies". This means integrating skills and workforce planning into the strategy development process. Taking a holistic approach to strategy development and not just focusing on the WHAT and the HOW but also the WHO. It means not developing a business strategy in isolation and then getting annoyed when HR isn't able to recruit the right skills but having HR be a key contributor to the strategy development process to ensure the right questions are asked throughout the process. It means taking into consideration the capabilities and skills available within the organisation today, understanding the potential you have within your talent pipeline today and anticipating the future needs of the business from a people point of view. It also means being aware of the market situation, whether there is a strong enough pipeline for certain skills or whether your organisation actually needs to be much more proactive and influence the market. This means asking the right questions, like:
What are the capabilities and skills needed for us to pursue this strategic option?
How will we attract, develop and retain critical skills in our organisation?
Where do we need to invest now to be able to have the skills we need in 2, 5 or 10 years' time?
What's the market landscape for these skills? Is there an over or undersupply?
How can we retrain those employees who have a high level of learning agility?
Are there non-traditional talent pools we can tap into?
What collaborations or partnerships could help us resolve this issue?
Who are we in competition with for these skills and where's the trend going?
How long is the lead time to build skills internally?
Where can we borrow specific skillsets in the short term?
What type of employer do we want to be and how do we differentiate ourselves?
While there are forward-thinking organisations that have fully embraced the notion of making people topics an integral part of their strategy process, we still have a long way to go. There are still too many business leaders who either don't pay attention to this topic until it's too late or are looking to the government to solve the skill shortages or "fix" the education system. Yes, in some cases there are big systemic challenges that are a contributing factor and yes, the government does play a role, but it doesn't mean that businesses shouldn't take ownership themselves for addressing the challenges that are a threat to their long-term prosperity. As I mentioned at the start of this post, if it was a critical component part or raw material, leaders wouldn't wait for someone else to deliver the solution either.
I hope that in the future, we don't need to be talking about "people-centric strategies" because people and skills are a core part of any business strategy but in the meantime, I do think it's helpful to use this term to emphasise the need for a more holistic approach to business strategy. And of course, while not the focus of this post, people-centric of course goes beyond skills and should also cover topics such as diversity, equity and inclusion, succession planning, employee engagement, health and wellbeing, flexible or hybrid working, compensation, career development, etc.. And while all these topics are interconnected, skills can be a good starting point and is certainly a key way into the strategy conversation for HR professionals.
So why not use 2023 as a starting point for your business to make people topics a priority? Take a step back and re-evaluate your strategy through a people and skills lens. Then take ownership of the way in which you develop your existing and future workforce to enable your organisation's growth.
In part 2 of this post, I'll explore some practical steps organisations of different sizes can take to address potential skills shortages or gaps and start to be more proactive.
Learn to Grow is a boutique organisation development and change management consultancy that partners with organisations on the topic of people-centric strategy, talent development and change readiness. To discuss this topic further in the context of your organisation, get in touch.
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