Building a Skills-based Organization: Why Starting Small is the Best Approach

The future of work is evolving rapidly, and organizations can no longer afford to rely on outdated people development and hiring models. As Michelle Sims highlights in her Forbes article Skills-FirstIs More Than a Hiring Strategy, It’s a Mindset, the global skills gapis widening, making a skills-first approach essential for long-term business success.

According to McKinsey & Co., 87% of companies have or expect to have skills gaps in the next few years, while Korn Ferry estimates that the skilled talent shortage could cost the U.S. $1.7 trillion in lost revenue by 2030.

These figures underscore the urgent need for companies to shift from traditional HR processes to a more data-driven skills-based approach. Yet, many organizations get stuck before they even begin, tied down in lengthy discussions about which skills to include, how to assess them, and how to ensure the process is accurate.

We believe the solution lies in starting small – an agile, practical and scalable approach. In this blog, we share insights on how you can overcome analysis paralysis, launch a skills-first initiative, and build your skills framework through continuous learning and adjustment.

Why Overplanning Skills Selection is a Trap

Many companies fall into the trap of over analyzing their skills selection process. Lengthy conversations about how many skills to include, which skills matter most, and whether they’ve captured every needed skill can go on for months, even a year. This delays the progress and prevents you from having a good grib of what you have and what you need, to succeed.

These are some of the reasons we’ve heard:

1. Fear of missing important skills: organizations worry about missing essential skills.
2. Desire for comprehensive coverage: some feel there’s pressure to include all skills in the “house” and create an extensive skills inventory from the start.
3. Analysis paralysis: others try to involve all possible stakeholders, which can result in endless debates and stalled decision-making, i.e. “should we choose teamwork or collaboration as the skill?”

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Start Small - Define 25 Critical Skills

Instead of trying to build a comprehensive skills database from day one, we recommend starting small. Begin with 25 critical skills that are most essential to your strategy and business goals.

Why 25? It strikes the good enough balance, providing meaningful data while covering both technical and power skills, without overwhelming anyone during the assessment phase. Attach these skills to key job families and roles, then assess your workforce based on this targeted list.

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Why this works:

1. It creates a clear focus: a small skill set keeps the process manageable and delivers results quickly.
2. Strategic alignment: it focuses on business-critical skills, ensuring that development efforts drive firstly the strategy and business goals.
3. Faster rollout: a smaller, well-defined list enables quicker implementation, allowing you to gather valuable data and adapt.

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How to define 25 critical skills:

1. Collaborate with an external partner, such as Kined Consulting,  and with your business leaders, HR, and managers.
2. Identify strategic goals and corresponding capabilities.
3. Select skills that are critical for business success in the next 1-2 years.
4. Attach these capabilities and skills to relevant job roles, either in excel or a tool such as Skilbit.
5. Visualize your skills map, skill gaps and strenghts through self assessment.

Allow Imperfectionin Skills Assessment

After defining critical skills, many companies hesitate to proceed because of concerns about skills assessments. Employees may overestimate or underestimate their abilities, leading to uneven data. But this fear should not cause delays; in fact, you can approch assessment discrepancies as opportunities, not failures. Here are some reasons why we believe the focus should be shifted away from the accuracy:

Conversation starters

Self-assessments are great foundations for sparking meaningful conversations between managers and team members about expectations, growth, and development. You can start by asking your team member: “can you walk me through your assessment process and how you arrived to the values?

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Improvement over time

Assessment accuracy and skill levels will improve through time as employees gain experience, learn and grow, get peer feedback and manager assessments.

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Action-oriented data

Even imperfect data reveals trends, strengths, and gaps that can support you in better learning and development initiatives. Use the skill gap data to drive more targeted learning content and strengths to execute strategic intiatives.

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Learn by Doing: Launch, Assess, Adjust

The most effective way to build a skills-powered organization is through action and iteration, not perfection. It’s time to start now. Here's how:

1. Launch the initial framework: conduct assessments based on your 25 most critical skills.
2. Analyze the data: review gaps, strengths, and trends in the results.
3. Refine the skill framework: add new skills and adjust skill descriptions based on insights gained from the first assessment cycle.
4. Normalize skill conversations: use assessment results to spark development discussions between your team leads and team members.

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What Companies Miss by Delaying Action

Organizations that delay launching the skills-based approach due to overplanning miss out on critical learning opportunities. Every day spent debating which skills to include is a day lost in driving actual business impact through development conversations and skill-building activities.

These missed opportunities include:

• Career development talks: employees and managers miss out on setting and executing personalized development plans.
• Skill-gap insights: companies lacks real data on existing skill gaps and strengths, spending excess time for example in building learning & development content that doesn’t necessarily match with the biggest needs.
• Strategic readiness: business may fall behind competitors that have already launched their skills initiatives.

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Aligning with a Skills-First Mindset

As Michelle Sims emphasizes in her article, adopting a skills-first mindset goes beyond hiring, it should spead through every level of the organization, from onboarding to ongoing development. Companies must move beyond eliminating degree requirements and commit to building long-term learning pathways for all employees.

Key takeaways from the skills-first mindset:

• Long-term skills development: offer certifications, online courses, mentoring, and leadership development programs for knowledge building and don’t forget projects, tasks and gigs where those new and polished skills can be applied to.
• Internal career mobility: create clear career paths based on skills progression, not tenure or pedigree but don’t forget diverse possiblities, for example growth through critical capabilities.
• Diversity and inclusion: recognize that diverse, non-traditional talent can excel when provided with equitable development opportunities.

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Final Thoughts: Start Small, Think Big

Building a skills-powered organization doesn’t require perfection on day one. Start small, launch fast, and learn continuously.

1.         Start small by defining 25 critical skills,

2.         Conduct assessments, and

3.         Let real-world conversations guide the next steps.

The most successful organizations are those that embrace imperfection, act on insights, and continuously refine their approach.

Adopting a skills-first approach is more than just a strategy, it’s a mindset that values potential, promotes continuous learning, and drives long-term business success.

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If you’re ready to start small, we’re happy to support you in taking those first steps. Use this link to reserve a 45min call to hear more about our processes and best practices.

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