Organizations Should Not Stop Competence Development — Even When Times Are Tough

In an unstable environment, organizations are less willing to do investments and the focus shifts to finding ways to cut costs. Unfortunately, cutting investments usually means cutting from development and education. Even, when we know that adapting and developing are the only ways of surviving in change.

Riitta Lumme-Tuomala points out that developing competence is more important than ever, in an unstable environment.

Riitta Lumme-Tuomala, 06.09.2022

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Although the world is changing, one thing is for sure: organizations must stay alert and find agile ways to apply the skills and abilities that their teams possess.

Currently, we work, innovate, invest, and study in the midst of at least three different crises: climate change, a pandemic and its aftermath, and a war that is raging in Europe. The war has a multitude of effects, but the precarious state of the economy and the prolonged global crises should not be forgotten either.

Currently, we work, innovate, invest, and study in the midst of at least three different crises"

Unstable and volatile has turned into something incomprehensible, and complicated is now following the formula of non-linear logic. In addition, these changes are systemic—they are difficult to face and interdependent.

All these things are cut out to trigger anxiety. This anxiety causes passivity and fear of making bad decisions, and this applies to not only people but to organizations as well. 

Employees’ expectations and the work itself have changed

Predicting the future is tricky—and it has always been. Although some risks became reality—some of them darker than the black swan—trends and the economic cycles of the past reveal us something that can help us prepare for the future, growth included.

However, this can only be done if competencies within organizations are suitable for it. We must accept that the things that enable success and growth are not the same as before and organizations have to change themselves as well as their approaches and mindsets.

Employees’ expectations have changed; most of us want to work with something that really makes a difference."

The pandemic made people work from home and now we are shifting into hybrid work and moving back to offices. The development of technology has been dramatic and there are now more digital tools to use than ever before.

Employees’ expectations have changed; most of us want to work with something that really makes a difference. Organizations must have a dream - a purpose - and the purpose has to be bigger than any employee, but also something that every individual wants to be a part of.

In countries like Finland, the waves of the Great Resignation were not as big as we thought they would be, and now we are already speaking about a big sabbatical year. Another new topic of discussion is quiet quitting. The focus in both is the need to separate work and free time, which were overlapped during the pandemic, and doing the work well but within a limited time period—together with purpose.

Only time will tell which trends and phenomena will be the ones that leave a lasting mark, but I personally believe that among those will be the purpose and the meaning of an organization.

Developing one’s competence is now more important than ever

In its September/October 2021 issue Harvard Business Review published an article that was titled “Future Proofing Your Organization”. Authors Michael Mankins, Eric Garton, and Dan Schwartz are partners in the consulting company Bain. In their article, they suggest that organizations should consider the changed employee expectations and figure out what tomorrow’s “stars” want from their employer.

In addition to these, it is neccecary to understand which roles are critical to the implementation of strategy and what an excellent performance looks like now and in the future.

Additionally, the article highlights the significance of management development, which is something no organization can afford to quit. It still needs to be invested in as much as before, or even more.

What an excellent performance looks like now and in the future."

In recent publications all consulting companies and research institutes have mentioned the importance of acquiring new skills and advancing current ones.

The World Economic Forum (Future of Jobs, 2020) is of the opinion that 40 percent of employees will require reskilling by 2025. According to the same report, during this time a large amount of “old” work roles will disappear and 97 million new roles that require the cooperation of human and machine will be created.

We will only make it through this situation if we reskill, acquire new skills and find new talents. According to McKinsey (Building workforce skills at scale to thrive during—and after—the COVID-19 crisis, 2021), 69 percent of organizations report that they invest more in reskilling, upskilling, and people development in general than before the pandemic.

Especially these skills are needed 

So, what skills do organizations need? Digital, of course. However, it is interesting that those skills that were invested in the most since 2019 can be divided into two categories: social and emotional skills and advanced cognitive abilities, as well as skills aimed at solving complex problems.

In the post-pandemic world, there are twice as many organizations that invest in emotional and social skills. 

One thing that is certain is that the right kind of competence plays a crucial role."

Although these studies were not conducted in Finland, I do not see why the situation would be any different here. Right now, attention should be paid to competent people, life-long learning, critical skills, and management.

Tomorrow is a mystery, but one thing that is certain is that the right kind of competence plays a crucial role on an individual level as well as in the organizations and society. All three entities have their own areas of responsibility when it comes to talent and competence development.

Aalto EE and its predecessors, as part of the Aalto University community, have worked towards developing competencies for five decades already. We will continue to develop towards a better world with better leadership in the coming decades, together with our customers.

Dr. Riitta Lumme-Tuomala is Senior Advisor at Aalto University Executive Education Ltd. 

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