If your company is going to survive the fourth industrial revolution, you’ll need to upskill your people. If that sounds like an absolute statement, it’s because my research and experience as a Fortune 25 executive over three decades has taught me that without company-wide, continual commitment to technology skill development, chances are that your organization won’t survive.
Today, it’s essential that everyone in your organization has a basic level of digital competency. Everyone. CEOs that fully rely on CIOs and digital officers for technical knowledge risk developing blind-sides on new business models and strategies that are technology-enabled. Your Board of Directors should also know enough about technology to lead for the future. According to a McKinsey study, only around 20% of boards are equipped with the know-how they need (and only around 5% of boards have a digital director).
Your engineering team, however, can’t get away with just current technology competency. Their skills will depreciate if you don’t have a strategy for technology skill development. Simple training solutions don’t cut it. You have to know where disruption could come from, and be in a position to lead your team through that disruption by empowering them with the right skills at the right time. A formal technology skill development strategy fuels innovation velocity—how quickly you can build new skills that translate into Wall Street metrics.
What makes you successful today could be a millstone around your neck in the new digital era
Fortune 500 companies have a lot of assets that, if properly taken advantage of, can yield incredible results. These include a network of suppliers and customers, plus venture capitalists, that can help them along the way.
I enjoyed making the most of resources like this during my time at Procter & Gamble, and we did incredible things with this toolkit. We were considered best-in-class in our industry, but we faced a very ironic problem. About four years ago, we realized being the best in our class was insufficient because our competition was no longer other large companies. It was startups. They had a 50% cost advantage and a 10x agility advantage. We needed to figure out how to compete with them.
In general, larger companies are less nimble and slower to enact change. At Procter & Gamble, we had to figure it out—and fast. To stay competitive, we focused on continuous improvement and disruptive innovation, which required a willingness to experiment with new approaches. Technology skill development was critical to making innovation velocity our competitive advantage.
At Procter & Gamble, it started with clarity.
At Procter & Gamble, it started with clarity. Once it became clear we had to create an edge organization to disrupt our global business services, we set a goal. We would take on a project only if we found a way to do it with a 10x return. I was not interested in a 20% or 30% improvement. We aligned completely to our goal of 10x by being direct about vision with everyone involved—from partners to employees. From there, we organized and operated very much like Alphabet’s X (formerly Google X), pushing boundaries of what was possible. And we could do it because systemic technology skill development was at our core.
If you want a chance at survival, you need to have a technology skills strategy that’s continually being activated and refined. Amazon recently announced that it is investing $700 million in skill development for its employees. I almost fell off my chair when I heard that because Amazon is one of the most tech-savvy companies in the world. They realize that this is not a static goal but a constant reinvestment; it’s the difference between a company that’s just starting to think strategically about technology skills and one that’s a disciplined market leader, having reached the peak stage of digital transformation, which I refer to as stage five in my book Why Digital Transformations Fail.
Technology is changing the way companies compete—and which ones compete.
Both digital transformation and technology skill development are continuous
Digital transformation has become a common phrase among leaders across every level of a company. And while it’s said often, many organizations don’t yet grasp that digital transformation is a long game. It’s an ongoing journey and the only way to get on the right path is by changing the technology DNA—or skills—of your team.
You have to change continually. It’s not enough to wait to be disrupted by an outside threat. You need to cannibalize your own business models and reinvent them. And this should continually inform your technology skills strategy. In the top 1% or 2% of companies in the world, this practice is second nature. Netflix has reinvented its business model four times now, from mail-in to streaming to original content to international. It’s paid off multiple times over in metrics investors care about.
It won’t matter if you have the best ideas to cannibalize your business or disrupt someone else’s if you don’t have the right skills to propel them. Establishing a solid strategy for technology skill development will allow you to stay ahead of evolving trends and avoid a situation where your engineers become less useful the longer they work for you.
Technology is changing the way companies compete—and which ones compete. You can no longer be only aware of the traditional players in your space; you also need to be on the lookout for emerging competition from completely different industries. The competitive advantage today doesn’t belong to the company that’s learning the fastest; it belongs to the company that’s aligning and applying new skills in a strategic way. Bottom line: A skill development strategy is non-negotiable in 2020—if you want to make it out of the fourth industrial revolution alive, that is.
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