The Quest for Capabilities

At the Center for the Edge, we’re launching a new research effort and we would welcome suggestions and ideas.

This research effort is an extension of our most recent research on the untapped opportunity that all institutions have to redefine work and deliver far more value to their stakeholders and the institution itself. At a high level, we encouraged institutions to move all workers in their organization from work that involves tightly specified and highly standardized tasks to work that involves addressing unseen problems and opportunities to create more value. This move becomes much more feasible now because technology is increasingly demonstrating the capability to take over routine tasks, freeing up worker capacity. This research has generated great interest because it is addressing a white space in the crowded topic of the future of work – a white space that has significant value creation potential.

Cultivating capabilities

One of the questions that we encountered when we shared our perspective on redefining work was: what do workers need to pursue this new form of work? This has led us to develop a contrarian view regarding another topic that is running rampant in future of work discussions. Everyone is talking about the need for re-skilling workers. The unstated assumption behind this discussion is that, if we don’t reduce the workforce as routine tasks get taken over by machines, we need to re-skill them so that they can move into other parts of the institution and perform a different set of tightly specified and highly standardized tasks.

We've come to believe that there’s another missed opportunity: to expand our horizons beyond skills and to focus in addition on human capabilities. So, what’s the distinction? Well, it’s ultimately about semantics, but I'll share what we mean by these two terms.

For us, skills are practices that are valuable in specific contexts, like how to operate a certain kind of machine in a particular environment or how to process certain types of paperwork in a particular business process. In contrast, human capabilities are practices that are valuable in any context – practices like curiosity, imagination, creativity, emotional intelligence and social intelligence.

There’s a further distinction that can be made. Some human capabilities are innate – all children display them. These include the capabilities I just mentioned. For these capabilities, we use the metaphor of the human muscle. We all have muscles as humans. If we don’t exercise our muscles, they tend to atrophy, but we still have them. Once we begin to exercise, the muscles grow again.

But there’s another set of capabilities that need to be developed – we don’t all have them at the outset. Capabilities in this category include practices like critical thinking and leadership.

Once again, these capabilities - whether innate or developed – are valuable in all contexts. They are also very valuable in terms of helping people acquire necessary skills more quickly and more effectively. People who have exercised innate capabilities and acquired developed capabilities will be much better positioned to acquire whatever skills they need to be successful.

While institutions are relentlessly focused on skill-building and re-skilling in a world of accelerating technological change, few institutions are paying any attention to capabilities (with the narrow exception of leadership capabilities – the assumption being that capabilities are really only relevant to leaders).

We believe this is another significant untapped opportunity – to expand our horizon beyond skills and to pay more attention to cultivating capabilities.

The quest for case studies

Once we've identified an opportunity like this, our research methodology focuses on developing case studies. We look for institutions that have already begun to address the opportunity and study the approach they pursued, the impact they achieved and the lessons that they learned along the way. Our experience from past research efforts is that, even with very new and largely unaddressed opportunities, we can generally find a few institutions that are “on the edge” and already starting to address the opportunities.

Even though we're based in Silicon Valley and the heart of the tech industry, we're also careful to expand our search beyond the usual suspects. We try to find examples of institutions in a broad range of more traditional industries and a variety of countries to persuade institutional leaders that this is an opportunity for everyone.

The questions shaping our research

So, here’s the ask:

• What does everyone think about the distinction between skills and capabilities?
• Is it a useful distinction?
• What needs to be clarified?
• What do you disagree with, or where would you need more evidence to be convinced?
• Are there examples of institutions that are tracking capabilities within their workforce?
• How are they measuring capabilities?
• Are they seeking to measure the impact of capabilities on performance?
• Are there examples of institutions that are actively seeking to cultivate capabilities within their workforce, especially their frontline workers, and not just their managers and top executives?
• What are they doing to cultivate capabilities?
• How much of the effort involves programs designed to do this and how much of the effort focuses on simply creating work environments that encourage workers to exercise their capabilities more actively in their day to day jobs?
• Are they explicitly measuring the rate of capability cultivation?
• Are there examples of institutions that are explicitly seeking to find candidates with certain capabilities in their recruiting programs?
• If so, how are they assessing capabilities among their candidates?

Bottom line

We believe that institutions that make more focused efforts to cultivate capabilities among their entire workforce will be much better equipped to manage the big shift from routine task work to work that addresses unseen problems and opportunities to create more value. We believe those institutions will ultimately overcome the diminishing returns that's the natural result of a focus on scalable efficiency and routine tasks. They will ultimately be the institutions that thrive in a rapidly changing world by focusing on scalable learning that can create exponentially expanding value for the stakeholders and the institution itself. We’re in the early stages of this big shift but we believe that there are already some institutions that are beginning to address this opportunity. We urgently need to learn from them.

<This originally appeared as a blog post on my Edge Perspectives blog site>