Together, the five forces reshaping work confront us with two questions. First, what will it take in this new era for individuals to reach their full potential at work? Second, how can firms close their talent gaps and build a competitive advantage through a winning talent proposition?
These questions are two sides of the same coin. Rethinking talent strategy through the lens of the individual worker’s full potential will be transformative. It will place firms ahead of their competitors as a desirable place to work, allow them to better tap into the discretionary energy of their people, and enable them to unlock hidden talent pools that already exist within the organization.
Based on our research and client discussions, three big ideas are emerging for forward-looking business leaders when it comes to their people. At the same time, we expect to see significant experimentation and innovation in this area over the coming decade, and view this as only the start of a longer journey.
From talent taker to talent maker
There is a “Great Reskilling” on the horizon. Firms’ talent needs are more dynamic than ever, as a result of rapid technological change and the accelerated cut and thrust of this new era. To operate with speed at scale, many firms are also discovering that new skill sets—like the ability to scale ideas successfully—are being added to their lexicon. For many established firms, the default answer has been to look externally, hiring workers who already have the skills required, and letting go of those that don’t.
“There is a ‘Great Reskilling’ on the horizon. Firms’ talent needs are more dynamic than ever, as a result of rapid technological change and the accelerated cut and thrust of this new era.”
The insurgent firms that are running circles around their larger competitors are taking a different approach. Their rapid growth is forcing them to take a harder look at workers’ underutilized potential and offer opportunities for growth to everyone, up and down the hierarchy. And they are doing this in a way that is far more attuned to the unique strengths of individual workers. At the same time, incumbents tell us that their biggest barrier to building new businesses—a trait that defines these insurgents—is a lack of talent.
Leading firms of the future will reprioritize looking within at underutilized talent pools and reimagine their outdated models of learning and development. To do this, they will need new lenses that help them identify the right opportunities for their people. The six worker archetypes can help leaders make sense of what individuals want from their jobs. Our research on the three communities—executors, disrupters, and scalers—can also help shed light on workers’ behavioral strengths. In addition, firms need to understand the specific skills and experiences of each worker, and identify creative new ways to deploy these across the company.
Firms that do this well will create a significant edge over their competitors. They will also establish themselves as responsible corporate citizens at a time when firms are under mounting social pressure to improve the outlook for workers.
Scale up investments in learning
Incumbents have a hidden asset in the war for talent: a large existing workforce. But making the most of this asset requires investment. Spending on learning was a key casualty of the shareholder primacy era, as firms shifted the burden back on workers. With the pace of change accelerating, leading firms are beginning to realize that this approach is no longer cutting it.
AT&T now invests around $250 million annually in T University, which enables existing employees to develop in-demand expertise in areas such as data science and cybersecurity. It also provides anywhere from $15 million to $34 million annually in tuition aid to support employees with learning outside of the company. Walmart has established the Walmart Academy to build frontline workers’ capabilities in a wide range of areas, including customer engagement, leadership, and change management. The retailer has also recently announced that it will pay 100% of college tuition fees for associates as part of its Live Better U program.
For firms that take this seriously, learning will quickly become one of their single biggest investment items, making it a CEO-level issue. And this big investment will come with big choices:
- Hard skills vs. soft skills: Hard skills are the specific and measurable abilities required for a job—for example, coding software or handling accounts. Soft skills are the more transferrable but less quantifiable traits that shape performance—for example, framing or empathy. While both will be essential in the jobs of the future, we expect the accelerating rate of technological change will dramatically reduce the half-life of hard skills and elevate the importance of soft skills.
- In-house vs. partnerships: External education partners can bring not only relevant expertise, but also greater experience in effective training. For many firms, particularly those at a scale disadvantage, such partnerships will be critical. Chipotle followed this model, establishing a partnership with Bellevue University in 2017.
- Concentrated training vs. ongoing apprenticeship: While intensive bursts of training save experts’ time, the true mastery of a task generally requires ongoing apprenticeship with an experienced colleague. However, firms’ rapidly evolving talent needs will create challenges in establishing and maintaining these apprenticeship chains.
Think laterally about career journeys
Many firms continue to invest in “future leaders” programs that propel junior managers up the corporate hierarchy. To make the most of their workforces, however, firms will need to widen their talent funnels, by drawing on people who are neither suited to, nor necessarily interested in, general manager roles. As our survey shows, the archetype mix of executives is drastically different from that of the overall population.
The professional management system continues to cast a long shadow over how firms think about learning and development, prioritizing generalist skill sets and vertical career ladders. Instead of trying to create all-rounders, firms should cater to the diverse strengths and interests of their workforce. This requires unbundling traditional manager roles and getting creative with lateral moves.
“Instead of trying to create all-rounders, firms should cater to the diverse strengths and interests of their workforce.”
Consider blue-collar workers in manufacturing plants. Rather than simply substituting these workers for machines, firms will need to reimagine their workflows to harness the potential of automation. And there is no one better positioned to do this than the workers themselves, particularly as we move toward self-serve automation. Tesla learned the hard way that removing humans from the production process entirely is incredibly complex. The company has since upskilled assembly line workers to help revamp processes and train and maintain robots. What is true of blue-collar workers is equally true of those working in automatable back-office roles. Of course, engaging workers in the process of automation will require them to trust that new, better roles are in their future.
Next, consider the customer-facing front line. Few of the people responsible for designing a firm’s customer experiences have ever been involved in delivering those same experiences. The front line is in a privileged position when it comes to understanding customers. In fact, these workers already generate many of the best ideas for delighting customers—take Southwest Airlines’ “Bags Fly Free” campaign or some of Starbucks' hand-crafted beverages. Yet few businesses give customer-facing workers the training and opportunities to redesign customer journeys in a meaningful way.
And finally, consider the career of a junior manager. The Peter Principle, coined by Canadian educator Laurence J. Peter, states that workers in hierarchical structures will be promoted to the level of their incompetence. While this may overstate the problem, it’s certainly true that as managers move up the ranks, their role begins to involve tasks that may not play to their strengths, particularly strategic and administrative responsibilities. Many junior managers would likely be happier in—and better suited to—a career path that allows them to focus on ensuring the healthy functioning of teams and supporting colleagues to perform at their best. For example, Buurtzorg, the pioneering Dutch home-care provider, has replaced traditional middle-management with “coaches,” a role for experienced nurses that focuses on guiding and supporting self-managing frontline teams.
Cultivate a growth mindset
Traditionally, workers could expect to follow a linear learning model, in which they gain stable foundations in the first decades of life, with the workplace acting as a kind of finishing school. However, as skills become obsolete at an accelerating pace, this model is no longer working. The problem is compounded by lengthening life spans, which means many workers will go through multiple cycles of reskilling over the course of their careers.
As a result, workers will need to start viewing their current skill set as a depreciating asset. Archetypes that thrive on change, like the Explorer, will view this as an exciting opportunity to sample a broad range of career paths. Archetypes like the Artisan may be reluctant to drift too far from their current area of expertise. Firms will want to encourage a middle ground that elevates the importance of adaptability without devolving into dilettantism.
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Cultivating a “growth mindset”—a term coined by psychologist Carol Dweck—can help organizations find this sweet spot. A growth mindset, in contrast to a fixed mindset, sees ability as something that is developed, not predetermined. Those with a growth mindset embrace challenges and failures as opportunities to learn, actively seek out feedback, and find inspiration in the success of others. At Microsoft, CEO Satya Nadella has championed embedding a growth mindset as a critical pillar of the firm’s transformation.
More broadly, firms need to create better visibility for themselves and their workers on their evolving talent needs. Many companies lack a meaningful understanding of what their talent requirements will be in five or more years’ time, and it’s unrealistic to expect staff to work this out on their own. While it’s difficult to make precise headcount predictions so far out, it is possible to define the direction of travel. This will not only help firms prioritize their reskilling investments, but also reduce uncertainty for workers. Tools that help to clarify the transferability and complementarity of skills across occupations will also prove valuable to firms and workers alike.
Ultimately, workers still need to be in the driver’s seat of their careers. They are responsible for the mindset they bring to the table. Firms can’t force them to think about what they want from a job and where their strengths lie, nor can they force them to reskill. But they can support them with the right tools, better visibility, and an environment where these issues are actively discussed. Firms also need to recognize that more fluid careers will add to the already heavy psychological strain that many workers are currently facing.
Workers ≠ machines
Workers are not automatons. Compared with building widgets or transposing data, workers’ ability to excel at the uniquely human tasks that will increasingly dominate work is far more dependent on their underlying emotional state. With human skills come human frailties, which means firms will need to take a more empathetic approach to managing workers in the decades ahead.
We know workers today are bringing far more mental baggage to their jobs, particularly the younger generations of the West. Constant reskilling and a general increase in ambiguity will only compound these issues, stretching the personal capacity of many workers to the limit. But leaders can start to alleviate some of this stress with a few steps.
Build personal capacity
Some may take the view that the overall well-being of workers isn’t a firm’s responsibility, arguing that a job is only one part of people’s lives. We believe this is misguided. For one, technology has blurred the boundary between our work and our personal lives. Moreover, the breakdown of other civic institutions in the West has left a void, with many workers seeking new sources of support. And perhaps most importantly of all, a failure to help workers will eventually lead to widespread burnout and the firm’s inability to stay afloat amid rising turbulence. As Richard Branson recently put it when discussing mental health, “No business has any more excuses not to take action.”
Many firms have been investing more in wellness activities over the last couple of decades, ranging from free gym memberships and yoga classes to counseling support. However, such initiatives can feel tokenistic and rarely make a major difference for the bulk of the workforce. Workers want leaders who display honest and judgment-free empathy around their professional and personal struggles.
"With human skills come human frailties, which means firms will need to take a more empathetic approach to managing workers in the decades ahead."
At many firms, green shoots of a mindset shift emerged during the pandemic, as managers became more aware of the multiple stressors affecting their teams. Many leaders recognize that mental health is a relevant issue for everyone right now, not only those suffering from mental health disorders. Companies such as Mozilla and Bumble have given staff a full week off to destress. But as we emerge from the crisis mode of the pandemic, business leaders risk snapping back to old modes of thinking.
To maintain momentum, winning firms will train leaders not only to teach their teams good mental hygiene, but also to actively model the right behaviors. Unilever, for example, conducts training for all line managers to provide practical tips for reducing their teams’ stress levels. Setting and honoring clear boundaries between work and personal time is essential, particularly as working from home becomes more prevalent. The best managers will actively discourage workaholism. Leading firms will celebrate managers who act as stress reducers for their teams, rather than stress amplifiers. This won’t be easy. In many cases, it will require leaders to reimagine how their teams operate.
Redesign workflows for humans
The way we organize work today not only adds to the psychological strain on workers, but also limits their ability to perform at their best. The rhythms of work aren’t designed for the realities of the human brain.
The average office worker receives around 120 emails per day. As the cost of communication has effectively fallen to zero, office workers have become accustomed to shooting off messages with limited forethought. Many now use their inbox as a de facto system for organizing tasks.
But this model is deeply unsuitable for the jobs of the future. Cal Newport draws a helpful distinction between “deep work,” where our brain is fully engaged in the task at hand, and “shallow work,” where we are operating on autopilot. Deep work is exhausting, but it allows us to tap into our uniquely human advantages in a world of increasing automation.
Newport’s research shows that email is the enemy of deep work—at least the way most office workers use it today. Context switching, where our brain jumps from one topic to another, prevents us from achieving the mental state needed to solve tough problems, generate new ideas, or navigate difficult conversations. It also adds to our stress. This is simply not how our brains are wired to operate. And instant messaging platforms are making the issue even worse.
One alternative is more meetings. However, in many organizations, meetings tend to be inefficiently run, with no clear decision drumbeat and too many nonessential participants. They often deplete our energy, leaving less for deep work. A more basic solution is clearer team protocols around email usage. Workers should be judged based on their results, not their responsiveness. Many firms are also embracing project management tools like Asana or Trello to create a more streamlined and curated flow of information, though few large organizations have encouraged adoption to the point of meaningfully displacing email.
If they are to get the best out of their people, business leaders will need to continue experimenting with solutions in the years ahead. The nature of the challenge shouldn’t be underestimated—it will require nothing less than a complete reimagining of the workflows that underpin the knowledge economy.
Tailor jobs to support individual purpose
Over the past few years, there has been a surge in discussion around the need for firms to define a clearer corporate purpose as societal expectations shift. We believe this is a nonnegotiable for success in today’s business environment. But it’s not enough.
Leading firms will set an even higher bar, aspiring to help every individual worker build a career that is fully in sync with what they want from life. Individuals who can see a purpose in their work that feels meaningful to them personally will be far better equipped to respond to the inevitable strains that come with a career today.
The challenge is that different individuals find purpose in different places. While a clear social mission is important for some archetypes, like Pioneers and Givers, it’s less important for others. Firms will need to look at every element of the employee value proposition and reflect on how they can use those elements to provide a greater sense of purpose for each worker archetype.
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For instance, an Artisan whose role offers little autonomy to exercise her craft and limited opportunities to work on things that excite her may begin to feel as though she’s wasting her life. But targeted changes to the employee value proposition can make all the difference. 3M famously allows its engineers to spend 15% of their work hours on experimental projects, exploring ideas that don't necessarily have anything to do with their job. Through a similar policy, Google has produced several breakthrough innovations—including Gmail and Google News—over the years.
Similarly, an Operator whose role prevents him from being present at key family moments may question whether his job is giving him the life he wants. Offering him greater flexibility and predictability in working hours, while protecting his time off, would likely make a substantial difference in his happiness and engagement, at little expense to the firm.
Helping individuals find purpose as they define it isn’t easy. It requires tailoring employee experiences in a way that doesn’t create an excessive administrative burden. It also requires fostering a company culture that actively encourages introspection and trust-based dialogues between workers and their managers.
Individuals will always have the ultimate responsibility for building the life they want. There are limits to what a company can and should do. A return to the days of Ford’s paternalistic Sociological Department in 1914—which sent company investigators to workers’ homes unannounced to ensure the employees were actually married, a company requirement, and living in adequate cleanliness—is a bridge too far. At the same time, however, relationships where firms and workers keep each other at arm’s length are increasingly unsustainable.
Out of many, one
In the early stages of a company’s life, the insurgent founder may be able to surround herself with workers who look at the world in the same way she does. However, as companies scale, this becomes increasingly difficult to sustain. One reason is the natural heterogeneity in attitudes toward work that we know exists across the population. Another is the reality that achieving the benefits of scale requires specialization, and as we showed earlier, different types of workers tend to bring different perspectives toward work.
Looking ahead, we believe successful firms of the future will only become more diverse. Part of this is demographic diversity. Firms that break down the barriers of gender, sexual orientation, ethnicity, background, and age in the workplace won’t just be able to tap into historically underrepresented talent pools. They will also improve performance through, for example, reducing groupthink and unleashing the innovation that comes from incorporating multiple perspectives.
“Looking ahead, we believe successful firms of the future will only become more diverse.”
Beyond demographic factors, the imperatives of business building and reinvention require the firm of the future to draw on a widening array of skill sets. Walmart has built up a team of more than 15,000 technologists, including talent from digital native firms who led the retailer’s digital transformation. In establishing its retail bank, Marcus, Goldman Sachs needed to bring in not only product managers and software engineers, but also call center workers.
However, conformity need not be the objective. Bringing dissimilar workers together under one roof allows firms to create something that is greater than the sum of its parts. Alternative perspectives and complementary expertise can unlock new sources of advantage. Making this work cohesively, however, is not an easy task.
Create a shared vision and values
Our ability to act together at scale is one of the key factors behind our success as a species. Nations rise and fall on their ability to sustain cooperation, and so do companies. While workers may be the atomic building blocks of the firm, a successful business adds up to more than just a network of individuals.
The pursuit of a common vision is an essential bonding agent for firms. Without it, trust and reciprocity atrophy, and the business begins to feel more like an impersonal marketplace. The best firms also manage to sustain a distinctive character, underpinned by a set of unifying values, across the company even as they scale.
For example, Apple’s talent pool spans a broad spectrum, ranging from creative designers to hardware engineers to retail salespeople. Yet all are united by a few shared traits that make the business so distinctive: attention to detail, unrelenting optimism, going above and beyond to delight customers, and a passion for innovation, to name a few.
Establishing these unifying threads is hard. Many attempts are uninspiringly generic. And even when leaders succeed in creating a distinctive vision and values, embedding and sustaining them at scale is not easy. It requires a thoughtful combination of leadership role modeling, peer-to-peer activation, formal incentives, and a shared corporate mythology.
Achieving this will be even more difficult as remote and contingent work move into the mainstream, with the relationship between workers and firms feeling increasingly transactional. Creating opportunities for informal—and ideally, in-person—bonding will be critical for remote workers. Leaders will also need to work hard to ensure their contingent workers share the vision and values of the company, particularly when the relationship is one sustained over time.
Build tribes, not tribalism
Homophily—the tendency to gravitate toward people who seem similar to us—is part of human nature. With time, groups of like-minded individuals form a distinctive way of speaking, set of rituals, and common identity.
As firms draw on an increasingly diverse set of worker profiles, it’s inevitable they will start to see the emergence of distinguishable groups. Some will be more reserved and autonomous, others more collegial. Some will celebrate technical excellence, while others will emphasize pragmatism. Some will embrace taking risks; others will focus on predictable results.
This process should be encouraged, not feared—distinctive groups breed the sense of belonging and connection that is essential to attracting and retaining heterogeneous talent. Different workers want different work environments. Cohesion, not conformity, is the goal. For example, prior to the pandemic, Walmart’s technologists had a separate headquarters in the San Francisco Bay Area, where they were surrounded by others who spoke their language.
Sometimes these groups will align neatly to organizational lines, such as a business unit or function. But as firms increasingly move toward more integrated, cross-functional teaming, the picture is likely to become more complex. Firms that want to get the best out of a diverse workforce will need to take the time to understand their organization’s existing groups and how they interact with one another.
Successful businesses will celebrate and cultivate their different groups, while also working hard to ensure their organization continues to operate as a cohesive whole. Inclusive teaming will be critical to this, especially in cross-functional settings. Team leaders need to take the time to listen to each individual and acknowledge their wants and needs. From there, they should facilitate an open group dialogue to agree on a shared set of goals and negotiate ways of working. They must also model inclusive behaviors in group settings to reinforce their importance.
Business leaders that get this right will create a company in which workers feel valued by their colleagues, are connected to like-minded people, and have a sense that they are part of something bigger than themselves. History offers a lesson in what’s at stake here. At the height of its power, one of ancient Rome’s great strengths was the way it allowed diverse communities, with their own religions and customs, to thrive within the empire, while creating unity through a common language and allegiance to Rome. Ancient Carthage, on the other hand, was a far less inclusive society. It was based around a small citizenry that ruled harshly over its subjugated people and employed foreign mercenaries to wage its wars. In the long-running clash between these two civilizations, Rome ultimately prevailed.
“Rehumanizing the way we think about work will be the winning talent strategy of the future.”
The next decade will be one of significant experimentation around work. There is still much to learn about which approaches will be effective. There’s also a large blank canvas for creative new approaches. But one thing is clear: Firms that doggedly cling to old modes of thinking will struggle to stay relevant.
For workers, the coming decade will feel like one of ceaseless change and disruption. In this environment, it is more critical than ever for business leaders to try to understand the hopes and fears of their workers and invest to help them reach their full potential at work. Rehumanizing the way we think about work will be the winning talent strategy of the future.
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