Competency vs Capability Mindset: The Organisation

Design your organisation for the potential of its people and their capabilities, not the limits of an expertise.

I recently noticed that Capability or Competency? Mindsets matter was the second most read post on this blog. Part of the appeal of that post is that it addresses a critical shift in mindset for those grappling with the new dynamics of the future of work. We stand facing an organisational version of the personal insight Marshall Goldsmith described succinctly as “What Got Me Here Won’t Get Me There”

Competency-led Organisations

The Core Competency concept introduced by Prahalad and Hamel refined a concept that had been strong in management for decades. It is undoubtedly true that organisations compete by being better, more competent, at something than their competitors. However the mindset of being more competent differs from a competency. This subtlety was often lost as core competency flowed into the mainstream of management thinking.

The focus on core competencies created a mindset that organisation gets to choose its competencies as part of a strategic planning process and should set targets for competencies to fulfil its strategy.  While Prahalad and Hamel spoke of the need for organisations to look forward to assess and build their competencies, much of the focus in organisations has been historical. The biggest outcome of the discussion of core competency has been a narrowing of organisational ambition and a focusing of activity on historical strengths. “That’s not our core competency” is more common than “We can leverage core competencies”.

Influenced by themes that go back to the beginning of scientific management, we have turned core competencies into rigid processes, standards and policies. We have judged these competencies by what sustained competitive advantage in past markets. We have spent less time on the changing customer perceptions of value and the ongoing dynamics of the future marketplace driven by new competitors. The list is long of disrupted organisations who felt safe because a new entrant lacked their core competencies. In many cases the infrastructure to reinforce and sustain these core competencies became a burden in their ability to adapt and survive. 

Capability-led Organisations

The Big Learning mindset that pervades the future of work highlights that competitive advantage in the next century is based on the ability to build the capabilities required to compete in an environment of uncertainty. Rather than specifying a fixed goal of competency, we seek to build an open capability to fulfil our strategic intent and our customers’ needs as they arise.

Adapting organisations to foster autonomy, learning and change is what enables people to build the practical capabilities necessary to learn, grow and execute. The process you inherit is less important than the customer insight you gain in working to meet your customer needs. Prahalad and Hamel reinforced that in Competing for the Future their update of the core competencies discussion. The discussion on the need for organisations to build open capabilities that can help manage and drive adaptation.  These capabilities include openness to their networks and environment, collaboration, ability to learn, share and drive change. Critical too is the development of purpose as the new focus for organisational activity and the inherent rationale for groups of people to come together in work to benefit others.

Design for Capabilities

Responsive Organisations need to design for a capability-led response to a uncertain future. They need to develop core Big Learning practices like working out loud, personal knowledge management, adaptive leadership and experimentation. They need to design their organisations to allow individuals and the collective to focus on the realisation of purpose.

This organisational design will leverage networks, transparency, autonomy, experimentation and the inherent motivation of employees in ways that we have not yet seen. Developing a new competency in holocracy, agile, lean product development, design thinking, big data or any other single practice is not enough. An organisation must build the capability to continuously adapt to customer needs in a changing market.

Ultimately, it will also focus organisations more strongly on realising the potential of people, customers and other stakeholders. We need to design our organisations to build the capabilities that realise human potential. That can only help make work more human.

The Future Belongs to the Curious #PSKEvents

Curiosity is a critical capability for the future of work. We have reached the end of stocks of expertise.

This morning I was lucky enough to be involved in a fishbowl conversation with Cheryle Walker, Andrew Gerkens, Renee Robson, Charles Jennings and an insightful audience. The final question of the engaging conversation about learning and performance was ‘What capabilities matter for learning and development professionals in the future?’ The question prompted a great discussion of the value of strategic, business, relationship and systems acumen as learning becomes more focused on performance improvement & more integral to work.

My contribution was that curiosity is an important capability. As the attention shifts to how organisations can manage big learning systems, those facilitating this change need to be curious well beyond traditional domains of expertise. When work is learning and learning is the work to quote Harold Jarche, there is a need for facilitators of this process to be looking at their system and looking beyond the organisation with an intense curiosity. The question is not ‘what do I or our team need to know?’ The question needs to be ‘what can we learn that helps us work better and be more effective?’

Traditional approaches to learning often have an implicit or explicit assumption that there is a fixed reservoir of knowledge to be known by employees. Global connectivity has shown us that the required knowledge is constantly expanding, being shared and being created as people experiment with the edge and step into new domains or engage with new systems.

Big learning processes are key to the future of responsive organisations. Performance will depend on how fast and how effectively we learn. To shape this we must remember, the future of work belongs to the curious.

ICYMI: 2015 Top 10 Posts by Popularity

The over 10,000 people who have visited this blog in 2015 enables us to review 2015 by popularity of each post. This blog has covered a lot of ground in 2015 in 206 posts so it is interesting to see what rises to the top of the social sharing. The practice of learning, leadership and collaboration for the future of work top the lists as they are the focus of my work and my interests:

  • Competency or Capability Mindsets Matter: I am a little surprised to see this post do so well. When I wrote it I thought of it as more of a technical post dealing with a key HR and management issue. Clearly the need in the future of work to focus on capability and move from strict competency resonates deeply.
  • The Last Thing We Need is an Enterprise Social Network:  This rant of a post from 2014 continues to circulate, educate and amuse
  • Working Out Loud 3 Tiny Habits: The growth of Working Out Loud in 2015 with the release of John Stepper’s book and two Working Out Loud Weeks has made this post from 2014 (and its various forms of content: posters and videos) enduringly popular
  • Big Learning: I see this post as another pillar of this blog ongoing. The idea of organisations needing to arrange systems to accelerate learning and capability development remains as urgent as ever. Big Learning is the next big challenge. In 2016, I am looking to bring Big Learning further to light with clients.
  • Beyond Adoption to Value Creation: The foundational post of my work in collaboration and probably the most linked post within this blog. Also widely used by others to explain the development of collaboration in organisations.
  • Why Hierarchical Management Survives: Institutional Filter Failure Struck me in a flash. Still surprises. As long as our organisations are deliberately dumbed down we will miss out.
  • The Growth Mindsets of Collaboration: I love Carol Dweck’s work on Growth Mindsets. Let’s hope more managers are inspired to consider & encourage them.
  • Double Loop Learning of Working Out Loud: This world has got to complex for single loops. Let’s help people to reflect on whether they are doing things right and even in a triple loop whether they are doing the right things. Working out loud will continue to be a key focus of my work in 2016
  • The Lean Startup of Me: If the circulation that this post received on Linkedin was added to its stats, this likely would have been #1 post of the year. It is certainly the post I get most questions about. This is still the way I approach my practice and life.  It has been invaluable to me and to those I coach on following the independent path.
  • The Future of Work is the Future of Leadership: Another foundational post from 2014 that benefited from a lot of links in 2015. Leadership work will be a big part of 2016. We need change and we need leaders at every level to get us there.

If I take out the 2014 posts, the next most popular 2015 additions would be:

This list of posts is a wonderful encapsulation of the focus of my work in 2015 and the areas that I will be focusing on growing in 2016. There are a few much beloved posts that failed to make these lists.  There are also many posts on the blog that probably should never have been written. That’s the journey of blogging consistently and working out loud on your practice and learning.

Thanks for your support in 2015 and I look forward to sharing more posts in 2016 and being involved in the great conversations that they inspire.

Bet on Change #wolweek

Change is work. It is not a game of trumps played with opinions. If there’s debate, even more reason to seek to make change and see what happens.

Those trying to stop your change will tell you the job has been done, can’t be done & isn’t worth doing. They can’t be all right, so maybe they are all wrong. You won’t know the answer if you don’t try to make change happen.

People will demand clarity. Others will say you need to be less prescriptive. People will say you are too narrow and too broad. People will say you need to name your change. Others will call your change a fad or dismiss it as mere marketing. The diversity of human opinions challenges all change.

Change agents need to recognise these views for what they are, opinions. Those opinions need to sit alongside your opinion that change is required. Many of these opinion leaders will want to engage you in a long debate at to the absence of merits of your plans. Sadly debates based on opinions are rarely productive.

Remember momentum is your friend in creating change. Action solves the issues of debates. The obstacles are the work and will be overcome as you adapt and experiment forward. Clarity can be refined as you work forward. Value will either be proved or fail. Action helps you recruit more change agents.

For all the people saying there was no need for International Working Out Loud week, there was a far larger group engaging for the first time and learning how to make it valuable. For all the debate about different views of the future of learning and development last week, there was still a need for people to back their views on how to make learning more effective and engaging which won’t happen on a blog or social stream.

Debates are fine. You can learn in a debate when they compare facts and experiences. When debates are just an exchange of opinions, it is far better to move forward, test your opinion and help everyone learn through action.

Lessons from Presenting

Last week I had a long and challenging presentation to give. Here’s some lessons that I take away from that experience:

Blogging helped: all the ideas in my keynote had been explored out loud before on this blog. It is so much easier to put together a big presentation when you have ideas that you have worked up, shared and discussed with others. Where I saw gaps in the presentation, I even blogged them to make sure I had worked out what I wanted to say.

Networks helped: a fortnight out from the talk I lost confidence that what I had to say was worth saying. I asked my Change Agent Worldwide colleagues for advice. As ever they were wonderful encouraging me to speak to my passions, tell stories and be practical.

A Role Models helps:: Looking for a role model to emulate, I studied Nilofer Merchant’s TED talk. At once, I saw a way to connect quickly with the audience and to advance my presentation.

Structure helped:With days to go I had my content, but a mess of a presentation. I went back to first principles and used Barabara Minto’s pyramid principle to rebuild the presentation. I discovered my issue. I had forgotten to explicitly make & support my main point. It sounds obvious but your point can get lost in all the action & theatrics. Fixing that helped.

Practice helped: All the way along I had been practising and refining the pitch. There was one more glitch. The night before I delivered the talk I felt my stories were like a laundry list and not very practical. As I grappled with this I realised I needed to add a pattern to help the audience follow the stories. I settled on Idea>Story>So What>Extended Story. This pattern forced me to make the ‘so what’ real in another story of the same organisation. That was good discipline and helped the flow.

Preparation Helps:Because of all the changes I need not have time to commit my talk to memory. I created a bullet point list of key points, lines and transitions. This enabled me to iron out kinks and simplify again. I was very nervous when I woke but the preparation gave me confidence it couldn’t be too bad. Thankfully my nerves vanished as I began to speak.

The audience enjoyed the talk. I couldn’t have been more thrilled that the message connected and people had idea to take away and try.

Much Loved Tools: Pyramid Principle

In a summer job during university I was introduced to Barbara Minto’s Pyramid Principle as a structure for communication. I’ve used the logic ever since. The lessons of that approach dig me out of all sorts of presentation messes.

Here are the big lessons I’ve learned applying the Pyramid Principle approach to fix communication:

– Remember to have one message: it is surprising how often you see a presentation without a message. These presentations forget to make their point succinctly because they are overfilled with ideas and with elaborate introductions, narratives and evidence
– Structure promotes simplicity: Structure clarifies thinking. Structure clarifies for the listener too. Best of all understanding the structure also makes you more adaptable to change. Only got 5 mins for your half hour presentation? Knowing your key points will help you home.
– Support ideas with evidence: Others forget to support their assertions. In those that do use evidence, in many cases the charts usually tell a different story to the text. Make it easy for your audience to see your evidence.
– Pyramids beats chains: Many presentations are long fragile chains of logic. I’ve seen someone fly around the world only to have the presentation fail at the first question. That presentation depended on all of a long chain of premises. The failure of one idea left all the work bereft. Pyramids stand on other support when one element falls.

Expertise in the Way

Clients often say something to me along the lines of ‘I don’t want to offend you, after all, you’re the expert, but I think we might need to change this recommendation’. I am not offended. I am relieved. I can’t possibly know everything about their problem and circumstances.

Their ideas and knowledge improve mine. I am learning. We are learning together. We can’t let expertise get in the way of mastery.

The advantage of Big Learning approaches in organisations is that they break down the barriers that form around expertise. When an expert says no, trying to move forward can be hard because of both the reactions of other less expert stakeholders and because the expert has now invested ego in blocking.

Shifting the focus to gaining new external perspectives, testing ideas in practice, learning more or experimentation can be a great way to validate all opinions but judge on results. The learning from the tests will move everyone forward. Momentum is your friend.

An expert who doesn’t want to pursue mastery used to be an expert. Never let expertise get in the way of learning more through work.

Execution is a Big Learning challenge

‘Vision without execution is just hallucination’ Thomas Edison

Vision & strategy is nothing without execution. Execution is often presented as a challenge of discipline. However the discipline at the heart of great execution is learning. Organisations need to use Big Learning systems to adaptive lay execute their strategy

Vision & Strategy are Hypotheses

The PowerPoint deck might land on the desk with a reassuring thud. The tables of data, the charts and the pictures explaining the vision and strategy are impressive. No matter how excited your strategy team is their plan is just still a guess.

Competitors don’t sit still. Customers are fickle. You underestimated the effort. You over estimated the upside. Reality is always different when you execute a strategy. Local leaders need to adapt the strategy to the reality they must tackle.

Organisations have tried to enforce stronger execution discipline to prevent this adaptation. They worry that the fragmentation of approach will cause issues. However a disciplined execution of a strategy that is not fit doesn’t add any value and can be disastrous. The learning opportunities for the organisation are lost.

Learning and adapting in coordinated ways throughout the organisation is the art of Big Learning. If your vision and strategy can’t adapt to reality, it is still a hallucination, no matter how widely it is shared. Organisations need to focus less on the discipline and more of the coordination of learning throughout the organisation. Finding effective adaptations and proofs of the strategy at work, changing to align and sharing them widely is what brings a vision to life.

Flip the question

John F Kennedy in a famous piece of rhetoric said ‘ask not what your country can do for you — ask what you can do for your country’. We can all benefit from the perspective of a flipped question.

As you congratulate yourself on your 3% conversion rate, do you wonder what went wrong with 97% of your efforts? As you hear about the engagement of employees are engaged, do you ask what engagement you have in their work and life? When you talk of driving employee motivation what if your not in the driver’s seat? When you measure your market share do you also consider your share of wallet? What happens if you flipped all the positive performance indicators in your business? And now the negative ones?

Taken too far like Kennedy’s quote flipping can become trite rhetoric. However there are moments when it can open a new insight, particularly in settled and traditional modes of business and thinking.

Organisations that are successful and dominant in their industries are inclined to accept the usual logic. Success is its own momentum and brings its own blinkers. Many times the attackers will come with new metrics or a flip of the traditional logic.

Ask not how this data confirms your thinking – ask how your thinking is challenged by the data. That’s where the Big Learning lies.

Learn from the Practice of Work with #wol

Working out loud is key practice to move beyond the theory of work. Working out loud helps solve the obstacles of work, tests ideas and creates interactions to keep work grounded in reality.

The most theoretical conversation in the modern workplace is often when a stakeholder says ‘I agree’. What they are actually saying is ‘I agree in principle to your approach given our common theoretical understanding of what you are doing, the absence of obvious obstacles and my limited understanding of the context’. Agreement like that falls apart when practice diverges from theory, obstacles occur or when more context surfaces.

The theory of work diverging from practice impacts more than stakeholder conversations. It is at the heart of breakdowns of many customer experiences, work processes and policies, incentive schemes, restructures, change initiatives and many other domains. In each case as the theory leaves the design table it meets obstacles, exceptions and other challenges in practice.

Some organisations try to eliminate these issues with a stricter adherence to theory. Instead, the defining practice of an effective modern organisation is how it accepts theory’s limitations and focuses on learning the lessons of real practice. Big learning practices take advantage of the organisations ability to learn through each employee’s work and adapt to break the boxes of the theory. Knowing obstacles are the work, organisations plan to learn and adapt. These organisations never get stuck in theory because it is always subject to improvement in a live test.

Working out loud plays a key role in these responsive organisations bridging the gaps between theory and practice. Working out loud puts ideas out for early tests, surfaces obstacles and shares context widely. A stakeholder who says I agree in a process of working out loud has a surer foundation and a better expectation of what is ahead.

Judge the success of your work in practice. Allow for learning and adaptation. Use working out loud to strengthen the culture of learning in your organisation.