Help Your Employees Develop the Skills They Really Need

In an age of disruption, the only viable strategy is to adapt, and that has never been more true than it is today. A generation ago, the half-life of the value of a skill was approximately 26 years. Now the half-life is often less than five years. So, it is perhaps not surprising that, globally, corporations are expected to invest more than $380 billion in learning and development programs this year.

Yet we need to do better. We know that, after decades of trying, skills related to lean manufacturing, agile development and overcoming unconscious bias, just to name a few, are woefully under-adopted in most organizations. In fact, a recent report by McKinsey found that 87% of firms surveyed expect to have a skills gap in the next five years.

More training is not the answer. We can’t simply send employees to workshops focused on whatever proficiency is fashionable at the moment and expect to get results. What is essential is to build coherent skills-based strategies. We must think seriously about which specific skills are to be targeted, who has to learn them, and what mix of education, experience, and exposure will be effective to create the skills-based organizations we need to meet the challenges of the future.

For example, at the software company PKWARE, where Todd was executive vice president, the company invested more than 1% of revenues on sales training focused on aligning the team around a particular process. While the staff was educated, it failed to yield the expected impact because the employees weren’t consistently getting the mentoring and real-time coaching they needed to sustain the initial improvements.

Compare that with Wipro, where Abhijit was previously chief learning officer. Business leaders from the insurance unit were trained in a specific skill: storytelling. Executives went to a literary festival in which they were exposed to professional storytellers over three days. Each night they also attended a structured workshop that helped them process what they observed. After returning to the office, they received continued peer mentoring for an extended period and were encouraged, in turn, to train their own teams on storytelling. This not only helped spread the skills, but gave the leaders the opportunity to further deepen their own proficiency as they taught others. The result: a dramatic improvement in winning deals and a significant boost in revenue growth.

Anders Ericsson, who has spent decades researching expertise, points to the importance of deliberate practice in developing world-class performers. Mere instruction is not enough, you also need to practice skills, identify areas for improvement, and receive coaching. It is this combination of education, experience, and exposure that improve performance. The

70/20/10 Learning Model

If our organizations are to learn the skills needed to win the future, we recommend a “70/20/10” learning model incorporating education, exposure, and experience. Here’s how it works:

10% Formal Instruction (Education): This portion of the learning strategy involves structured educational experiences, such as the storytelling workshops the Wipro executives attended at night. Other examples include webinars or in-person courses that focus on specific skills.

20% Social Learning (Exposure): Social learning involves learning from others. This is the role the professional storytellers played in the Wipro example. Other options include mentoring, coaching, or peer-to-peer interactions. For example, setting up a mentorship program within an organization can help employees learn from more experienced colleagues. Regular team-building activities can also foster a culture of continuous learning and help improve skills.

70% Learning in the Flow of Work (Experience): This is the most significant part of the learning strategy. It involves learning on the job through real-life experiences and tasks. For example, employees can improve their problem-solving skills by working on complex projects. Regular feedback sessions can help employees reflect on their performance and identify areas for improvement. When the participants of the storytelling workshop continued to teach their own colleagues and apply it in their business pitches and reviews, they got precious hands-on experience that deepened their storytelling skills.

This is very different from more traditional corporate learning approaches that focus primarily on MBA-style classroom instruction, like the one General Electric made famous at the Management Development Institute at Crotonville during the Jack Welch era. To be successful in the 70/20/10 learning model, managers need to take an active role as coaches, rather than as taskmasters, working to mentor their staff to improve performance. At the same time, Learning and Development (L&D) departments are going to have to do more than merely source curricula; they need to collaborate intensively with leaders to design personalized learning environments. Learning needs to be inclusive, continuous, and collaborative.

For example, as part of a regional initiative to reinvigorate the Texas Panhandle region, BOC Bank sought to help its managers make the transition from seeing their roles as performance evaluators to upskilling coaches. The L&D team didn’t start with a preexisting learning plan, but first spent time with leaders to identify tasks for performance improvement. Those tasks were then broken down into skills that individual employees needed to learn, and the L&D team mentored managers as they took the lead coaching their staff through personalized learning plans, using the 70/20/10 model. Within nine months, they started seeing measurable results in terms of the company’s standard business metrics. “Our adoption of the 70/20/10 model is directly fueling our ability to innovate, enabling us to build distinctive core software that sets us apart in the banking sector,” said Alex O’Brien, CEO of the bank.

If we are to compete for the future, we need to shift from a “war for talent” mindset to a skills-based mindset. Talent isn’t an innate property that firms can attract and bid for, but a capacity that needs to be built — and in any case, the most vital skills of the future don’t exist yet. In the same way that venture capitalists invest in and manage portfolios of companies, corporate leaders need to pursue portfolios of skills, divesting in some that become obsolete while doubling down on others that begin to pay off.

The future of work will not be determined by technology, but by creating the right mix of education, exposure, and experience needed to develop skills and put them to work, creating a vastly more productive workplace and economy.

Copyright 2023 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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