Skills and Speed: Why Access to the Right People, Skills, and Expertise Fuels Business Agility

Alexander Becker

The ability to access the right people, skills, and expertise has never been more imperative for business agility. Rapid technological change and shifting consumer preferences have shortened product cycles and widened the competitive gap between companies that can innovate and execute quickly and those that cannot. Finding and engaging the right skills for the right work is both critical and increasingly difficult as traditional talent acquisition strategies prove unable to keep pace with rapidly changing skill requirements and fierce hiring competition.

Constant Change, Shorter Product Cycles

Brutal competition. Volatile markets. Constant change. Today’s business leaders recognize these trends not as exceptions, but as rules. According to PwC’s 21st CEO Survey, 76% of global CEOs see the increased pace of technological change as a threat to the growth prospects of their companies, while research by EY reveals that 50% of CEOs believe their companies are not well prepared to take advantage of disruptive change.

76% of CEOs see the increased pace of technological change as a threat to company growth
50% of CEOs believe their companies are ill-prepared to take advantage of disruptive change

Macro-level data from across industries and sectors reinforces C-suite observations about the pace of change. According to The New York Times’ Nicholas Felton, the time required for new technology to reach market-shifting levels of adoption has dropped consistently over the past century. Research by the U.S. Census Bureau and The Wall Street Journal reveals that while television took over 25 years to be adopted by 25% of the U.S. population, the PC achieved this mark in 15 years and the smartphone in under 5 years. Between 2012 and 2017, the number of total global Internet users grew by 82% or nearly 1.7 billion people while the number of mobile connections grew by 2.2 billion during this period. In an increasingly interconnected world, new technology will continue to be adopted by more people faster than ever before.

television-white

25 years

Television adopted by 25%
of U.S. population

laptop-white

15 years

PCs adopted by 25%
of U.S. population

smartphone-white

5 years

Smartphones adopted by 25% of U.S. population

As the pace of technological adoption has changed, so have consumer preferences and expectations. The impact of new technology on individual consumers and brands that sell to them has been well-documented. Research by Microsoft, for example, shows that today’s websites start losing material traffic to competitors when load times increase by just 250 milliseconds, while 85% of Millennials trust anonymous online reviews more than traditional advertising. The shift in consumer preferences towards high quality, intuitive digital experiences has opened the door for startup direct-to-consumer offerings and pushed established brands to re-examine their models in industries ranging from retail to banking.

Far from being limited to the B2C or consumer goods spaces, these trends increasingly impact the way businesses purchase and use tools and services. As McKinsey’s Liz Harrison, Candace Lun Plotkin, and Jennifer Stanley write “[B2B] customers increasingly gravitate toward digital tools to research and buy products- after all, they use Amazon at home just like everyone else does.”

85% of Millennials trust anonymous online reviews more than traditional advertising

Source: The Future of Marketing in Consumer Products,
Bain & Company

While the impacts of rapidly evolving tech and shifting preferences will continue to unfold, enterprises of all types already feel two critical effects of these trends: tighter timeframes to react to new market data and shorter product cycles.

In the automotive industry for example, average product life cycles across consumer vehicles of all types have plummeted over the past two decades based on data from the Center for Automotive Research. According to McKinsey, 70% of CPG sector growth in recent years has come from small to medium-sized brands that routinely “outlaunch” established competitors with increasingly niche products based on in-depth consumer insights and rapid product development processes.

“Fast fashion” brands like Primark, H&M, and Forever 21 that structure their businesses around product cycles measured in a few weeks rather than months have achieved revenue growth rates more than double those of traditional industry competitors. The software industry remains the undisputed champion of rapid product development and iteration, where even a giant like Amazon releases product updates every 11 seconds on average, totaling more than 8,000 per day.

70% of recent CPG sector growth has been captured by upstart brands

Source: Agility@Scale: Solving the growth challenge in
consumer packaged goods
, McKinsey

iterative-development-indigo

An average of 8,000 software changes are released by Amazon
each day

Source: How the Software Industry Redefines
Product Management
Harvard Business Review

In a world where 60% of companies report taking a year or longer to get a single new product to market, speed increasingly defines winners and losers. The question remains however, what is the specific relationship between people, skills, and speed of execution?

Skills Fuel Execution

The increasingly rapid pace of change has impacted the relationship between enterprises and the people, skills, and expertise they need to get work done in two fundamental ways. First, the need to shorten product cycles and time to market has made seamless access to key skills critical to remaining competitive. Second, rapid shifts in tools and technology, coupled with a tight labor market, have made key innovation-focused skills harder to find and engage than ever before.

Business leaders with experience managing complicated innovation projects or product launches understand that immediate access to the right people, skills, and expertise defines the speed at which they execute. As McKinsey’s Marc de Jong, Nathan Marston, and Erik Roth write in their article The Eight Essentials of Innovation, “successful innovators achieve significant multiples for every dollar invested in innovation by accessing the skills and talents of others. In this way, they speed up innovation and uncover new ways to create value for their customers and ecosystem partners.”

The need to bring multiple skill sets under one roof to drive rapid execution and faster time to market has led to the proliferation of cross-functional teams built, in theory, to lower the barriers between functions and areas of expertise that often hamstring innovation efforts.

Successful innovators achieve significant multiples for every dollar invested in innovation by accessing the skills and talents of others.”

Source: The Eight Essentials of InnovationMcKinsey

In reality however, cross-functional teams only work effectively when stocked with the right skills and expertise.Cross-functional teams have become ubiquitous because companies need to speed innovations to market. The teams are like arteries, connecting parts of the body, enabling the whole organism to renew itself,” writes management scholar and researcher Behnam Tabrizi in Harvard Business Review. “That’s why it’s so important for leaders to pay attention to the way cross-functional teams are set up and how well they work: when they don’t function, the organization’s arteries harden.”

What grinds even the best-designed innovation teams to a halt faster than any other factor? Lacking the right people, skills, and expertise required to do the work in the first place.

Shifting Tech, Scarce Skills

The quickening pace of technological change and business model disruption hasn’t just impacted consumers, it has fundamentally changed the global market for skills and expertise. In a world in which business once adopted new tools or shifted their business models over the course of decades, enterprises could afford to wait for universities and other firms to educate or retrain new pools of talent. For today’s cutting edge skill sets like predictive analytics or machine learning, this cycle no longer works at scale. As Harvard Business Review Senior Editor Eben Harrell writes, “the quickening pace of technological change has shrunk the shelf life of skills acquired by today’s university graduates to just a few years.”

80% of CEOs report concern over the availability of key skills
47% of companies take over 90 days to fill high skill roles
84% of CEOs believe that the best people, ideas, and capabilities exist outside the walls of their company

Sources: 21st CEO Survey, PWC
Reimagining Work 20/20, Catalant

Enterprises feel the results of technology’s impact on skills and talent pools in two places: widening internal skill gaps and more difficult hiring. “As technological churn renders new skills outdated at an ever-faster pace, new skill gaps are showing up more often and in more places, increasingly decoupling labor supply and demand” write McKinsey’s Richard Dobbs, James Manyika, and Jonathan Woetzel. According to their research, global enterprises could face a shortage of up to 85 million workers with the skills required to operate next-generation business tools by 2020.

Even when in-demand skill sets exist within the labor market, fierce competition makes hiring difficult and time consuming. According to PwC, 80% of CEOs report concern over the availability of key skills, while 47% of companies take over 90 days to fill high skill roles on average. As highly skilled workers increasingly congregate in a limited number of geographies and sectors, 84% of CEOs report that the believe the best people, ideas, and capabilities exist outside the walls of their company.

As technological churn renders new skills outdated at an ever-faster pace, new skill gaps are showing up more often and in more places, increasingly decoupling labor supply and demand.”

Source: How US Companies Can Fill the Skills GapMcKinsey

The right skills and expertise will remain critical to rapid execution, and experts do not project the global gap in critical innovation skills to close any time soon. Competition will not abate, and consumers will not become any less fickle or demanding. In the new normal of this environment, business leaders must consider access to the right people, skills, and expertise to move mission critical work forward imperative to agility, innovation, and future growth.

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