The Same 100: Let’s Create a New Problem: Building the Conditions for Relevant Skills and Business Growth

Introduction

Let’s create a new problem – one specific enough to tackle, meaningful enough to impact millions of people, and outrageous enough to mobilize action.  Let’s tackle the “Same 100” challenge in a way that creates a “new 10,000” problem that, at a different scale, constrains business growth, impacts economic development, and helps to meet some of the expectations of millions of people. 

But first, the Same 100 challenge.  

We all know the issue: Too few people exist with the leadership, technical, and business skills needed to grow our businesses sustainably given changes in customer expectations and challenging competitive environments.   Pragmatically, the Same 100 refers to the blunt reality that many, if not all, of us go to the same few folks – the same 100 – to drive key programs in the new ways that need to be developed to meet the objectives that each of our businesses has.  With what result?  Constrained opportunities and challenges to free up the scarce talent each of us has since we tend to have neither the numbers nor the right types of skill-sets and capabilities needed to capture, enable and sustain value.

Why this matters is simple. 

Many of our businesses are in a fast “race to zero” of profitability – whether the result of high costs or margin pressures from a variety of sources (e.g., new competitors, changes in regulatory requirements, technology shifts).  Only two choices exist to either slow or get out of this race.  First, do more of the same with fewer resources – which requires getting greater productivity out of the capabilities you’ve currently got at lower costs.  Second, do new with new capabilities – which require capturing new sources of value, sustainably.  Both require new ways of working.  Both require new sets of capabilities.  Both require overcoming the Same 100 challenge. 

That’s the topic of this call to action – to suggest how we might start creating a new problem of the “same 10,000” recognizing that:

1. We all face this challenge – of the same 100, of too few folks with the right set of capabilities to capture, enable and sustain value.  This is not a specific company problem.  It is all of ours.
2. This challenge is a profoundly complicated one, with lots of moving parts.
3. No one firm, or entity, can “solve” it alone
4. Consequently, we need to figure out how to work together to do so.  Such collaboration is not only of business interest but also a socio-economic imperative to tease apart its challenges in a pragmatic way that that can have meaningful, and sustained, impacts.
5. Doing so requires a re-set on how to make sense of the problem and how to take action on it.

If only it were that easy.

Building relevant, high-value, sustainable capabilities is a hot topic, much discussed and well funded.  With little to show for it.  Doing more of the same, calling for more training, more education and more dollars to be spent on what has already been proven not to work is the classic definition of insanity: expecting a different outcome through doing more of the same things.  So, how do we get off this treadmill of calls for action but frustrating results of impacts? 

Simple answer: we follow the wisdom of great carpenters who bring the right tools to the table.  Capability-building is a complex challenge with lots of moving parts.  Consequently, we need to bring questions, lessons and answers that tease apart these parts in a way that respects their complexity while allows us to chip away at the challenge.

Following the wisdom of great carpenters

Let’s start with a different question.  Often, different questions raise new insights into what business issue to tackle and how to do so.  Calls for more training and capability-building regarding the Same 100 are incomplete.  The issue is not just a training or capability-building issue, but the sets of activities – the “ecosystem of activities” – that surrounds any training and capability-building.  Let‘s look at this in more detail.

The issue of capability-build lies not in more education, more training, more investments, and so on.  Yet these serve as the core of most of the recommendations to build capability.  These are all fine recommendations.  But they fail the “so what” questions: more education, more training, more investments “to do what,” for how long, and under what conditions?  Sure, you can train people for more IT skills, deeper project management capabilities, greater analytical insights.  However, unless you have specific business and technical issues to which those skills, capabilities and insights can be applied, what do you have?  Frustrated people with book knowledge or capabilities that will atrophy due to lack of use, resulting in no sustained impact or ongoing development of capabilities, and hence no sustainable business logic or economic basis on which to fund such initiatives.  Consequently, the issue is not resources, but the use of them in a way that they can be applied where they have the most impact, with the least wastage.  Every investment in training, in capability-building, is thus embedded in a broader context – an ecosystem – of other activities and different organizations, impacting each other directly or indirectly.  This connectedness of capabilities-build is what makes the issue so complex, and turns it into a “wicked problem” of lots of moving parts.  Yet, here is precisely where the lessons learned on how to tackle wicked problems, of ecosystem-based insights, becomes helpful, and pragmatic.

Given that, let’s re-cast the strategic question around capability-build recognizing the connectedness of the challenge.  Why? Because recasting of the strategic issue can help reframe what we need to focus on as well as the how to realize its opportunities.

The strategic question to tackle the Same 100 is deceptively simple: 

How do we build the conditions for sustained impact of relevant, high value capabilities, and thereby meet our growth and profitability objectives?

Three implications result from this question, as do three ideas as to what to do about them.  The rest of this post sketches the three implications, answering the “so what does it mean to me” question as well as the question of “so what might I do about it, pragmatically?”

The implications:

• First, it shifts what we tend to focus on recognizing that lots of moving parts exist to this challenge, making up an ecosystem or networks of different actors – whether businesses, government organizations, civil society, individuals – each with differing priorities, incentives, and ways of working.  This shift towards an “ecosystem” focus raises a key question: how do we tease apart the network of interactions – this connectedness – in a way that any of us can have pragmatic impact, in a timeline that provides measurable benefit?

   

• Second, it centers the topic around a key business imperative, namely, Return on Equity (RoE).    Businesses go out of business as the cost of capital continues to exceed their returns on investment.  Core to an effective return is relevant people with the skill-sets needed to enable ongoing profitable growth.  Sustainable, and relevant, talent is embedded within a complex ecosystem.  Obtaining insight into the networks in which it is embedded, and figuring out how to shape those networks, becomes vital to figure out how to sustain that growth, and realize the RoE critical for all of our growth objectives.  Therefore, a key question becomes how does the RoE lens help to prioritize those conditions critical for relevant, and sustainable, capabilities?
• Third, it highlights the opportunity to transfer if not share risk in a way that firms with typically different if not competing agendas to work together.  A key question becomes: how do you collaborate in a way that accelerates your objectives while it mitigates the risk of doing so?

Let’s look at each of these implications in turn.

Answering the “so what” question

Implication #1: it’s about the Ecosystem.

Sustained talent build is embedded within an ever shifting ecosystem of multiple stakeholders, each with their own pressures, priorities, constraints and opportunities.  The figure below depicts the set of activities that make up the talent-build ecosystem.

 

Each of these layers of the figure above consists of its own set of activities, organizations and people who influence them, as well as methods of engaging in them.  These interactions influence the next layer which consists of its own set of interactions, points of influence, and priorities. 

Ecosystems cannot be controlled; nor can they be managed.  Think of the web.  No single firm, or organization – whether government or civil – “controls” the shape of the web. Each of the tens of thousands of businesses and millions of people influence each other to shape their relevant portion of the ecosystem that is the web.  Ecosystems cannot be managed, but only nudged, or influenced in a way that motivates people to change what they do individually with ripple effects on the behavior of others which collectively changes the shape of the networks through which they are connected.  The figure below graphically depicts such an ecosystem.  Think of each of the colored areas as a different layer of our ecosystem and each node as a specific activity – e.g., a type of project, a form of investment, a training program, and so on. 

 

As in any ecosystem, there is no specific node to manage; instead, it is the overall shape of the network that matters.  This is why focusing on building the conditions for sustained impact becomes critical.  Building the conditions is shorthand for focus on influencing the overall shape of the network, not just one part of it.  Building sustainable relevant talent is a complex, adaptive network.  Isolation on any one layer, and certainly nodes, within that network provides, sure, an outlet for funding and effort.  But, it will not result in any sustainable impact. 

Let’s make this point tangible.

Focusing on the conditions for sustained impact shifts the attention away from any specific skill-sets to build – e.g., more project managers, more analytical insights, more IT skills – towards the so what questions of how they will be used, nurtured, and extended.  Training, educating and deepening skills in isolation of how they will be used are exercises in frustration and waste; we have seen this globally, in different industries, and in different sizes of companies and countries.  Here’s why.  No activity – whether policy, investment, or company action “exists” in isolation.  They are always embedded in broader context of activities.  How could you build a telecommunications infrastructure if there weren’t mobile devices to be used?  Why would you build a mobile payments platform unless there were mechanisms both to transfer funds and debit accounts?  Both of these activities – building a telco infrastructure and designing a payment platform – requires other activities – let’s call them pre-conditions for their use, in this case, mobile phones and processes for exchanging monies, as well as people who both know how to use the applications and process the payments.  Both of these require, as well, other activities to make sure that their capabilities can be used by many, in a sustainable manner – let’s call them post-conditions.  It is not enough to exchange payments, you need to make sure that what is purchased can be delivered to you and supported in an ongoing manner as needed.

The same holds for building capabilities.  Pre-conditions exist for training and capability-building to be effective.  Like what?  Literacy, access to capabilities – people, programs and processes – *for* training.  And, for training to be sustainable, and useful, it needs to be used in a manner that drove its design.  For example, you can build a micro-hydro well, but unless you have the raw materials to do so that are locally sourced and plentiful (e.g., pre-conditions), the costs of its construction will be uneconomical over time; and unless you have processes and pipes to use the electricity generated as well as an ecosystem of people and capabilities to maintain and improve the well (e.g., post-conditions), it will fall into mis-use and be yet another white elephant of costs, expensive and ultimately neither useful nor used. 

Sound familiar?

The same holds for capability-build and training programs.  Training programs do not exist in isolation.  They, too, exist within an ecosystem of other activities, both pre-conditions and post-conditions for sustained impact, and use. 

Re-casting capability-build as existing within an ecosystem of activities changes its “unit of focus,” from any particular program to a set of activities that will shape the likelihood of success for any and all programs.  Pragmatically, this means that as much times need to be spent on the pre-conditions for specific training and capability-building as on its post-conditions of how they will be deployed, evaluated, sourced and improved.  It also has implications on who does what – individual companies, industry groups and government – regarding their role within this ecosystem of capability-build.  Again, no one actor – individual, company, industry group or government agency – can do it by themselves.  Capability-building is a systemic issue requiring bringing to bear a systemic approach – hence the re-casting of the strategic question of capability-building.

Implication #2: It’s about Return on Equity (RoE)

Only two options exist to increase return on equity.  Option number 1 is to do more of the same with less, as measured by greater productivity.  This is the cost optimization option – making sure that, simply put, your cost base is growing less than your revenue base.  Option number 2 is to do new, as measured by new sources of sustainable profitable growth.  This is the new revenue stream option – making sure that, simply put, you are meeting if not creating new customer needs, capturing, enabling and sustaining new sources of value.

Both options require capabilities.  But both require different kinds of capabilities. 

And here it gets interesting.

Many of our growth strategies are based on doing more of the same, only more cheaply.  The problem with this, of course, is that markets shift, based on changing customer needs, new technology affordances, and increasing competitive pressures.  So, doing more of the same, only more cheaply, continues the Race to Zero problem of attempting to protect margins on products and services in a competitive world that doesn’t value them the same as they were valued before.  Bluntly, many strategies are based on a world that no longer exists.  Which takes us to the other option: doing new, attempting to capture new sources of value profitably and at scale.  The problem here, of course, is that doing new requires insight and capabilities to identify what is new (in terms of what customers are willing to pay for), capturing it, and sustaining it… which highlights the tricky balance (using a well worn business analogy) to “change the tires of the bus (capturing new sources or value) while it is driving quickly down the highway (keeping the business running based on previous and existing sources of value).

Let’s highlight three points here.

First, value comes from knowledge codified, and used to meet customer expectations and needs.  A customer wants a new service, for example.  Someone in your firm recognizes that and develops a modification or new product to meet it.  The time between recognition, development and meeting the need can be lengthly, and costly.  The process between recognition, development and meeting the need is that of “codification” – into software, business processes, marketing materials, sales capabilities, etc.  One mechanism to overcome the Same 100 challenge is to ensure that the few, scarce, knowledge we do have gets codified – captured in a way that others can use, through freeing up the few people we have to have them capture new sources of value as well as to transfer their insight to others to sustain our current sources of value. 

Second, codified knowledge has spill-over effects.  Codified knowledge creates the capabilities for scale – for more of your employees to do what your few experts do.  It also has non-surprising implications on broader productivity and GDP growth for the economy overall.  Different types of knowledge create spill-over (or pull-through) effects onto other jobs, and hence growth (what from an economic perspective is known as positive externalities). For example, statistical insight, financial modeling, technology architecture, mathematic acumen, and so on, have all been shown to have greater spill-over effects in terms of value and employment creation than say, IT application testing, or even basic literacy skills.  The latter sets of skills are important, necessary capabilities, of course, but they are table-stakes to play the competitive game, not to win at it.

Much research has been conducted on the spill-over effects of codified knowledge, helping to explain different growth patterns both in terms of different countries’ economic growth, but also across industries.

And the figure below depicts a heat map of different industries in terms of how value spills over across sectors.  In other words, different types of codified knowledge have greater or lesser spill-over effects across industries which, in turn, impacts the types of sustainable economic and business growth a country experiences. 

A lesson of Korea and China increasingly targeting manufacturing industries, and providing focused training capabilities to support them is well known.  India’s focus on building up world-class IT universities tied to specific capabilities and business opportunities (e.g., as much focus on pre- as on post-conditions) is also known.  Indonesia’s recent attempts to become the world’s leading sharia-compliant financial center is underpinned by a shift in education policy and training programs to build tens of thousands of financial analysts, rooted in Sharia-based financial services, also are built on this well known lesson.  The point?  Growth and employment stability is a function of managing the knowledge spill-overs over time.  Which raises the questions of a) what type of knowledge *is* required to capture the emerging sources of knowledge and b) how to do you codify it in a way that maximizes its spill-over not only throughout your firm, but also helps to build the conditions for sustained economic growth – the point of the first implication.

A third point jumps out here.  The task of identifying what type of knowledge is critical either to “do the same” or “do new” is not as easy as it initially seems.  For a simple reason; value, and its underlying capabilities, have a decay-rate.  That is, knowledge loses its relevance, and value its sustainability, over time.  What used to provide differentiating value may no longer, and the costs of maintaining that knowledge may become too great given its financial return.  Simply witness the topple rate of industry leaders both within any country and certainly across industries.  Ask yourself: how often does your competitive landscape shift in terms of who is leading, who lagging, and who you worry about for different parts of your business?  This shift reflects the blunt reality that sources of value shift, and accordingly, so too does ongoing competitive relevance – a reflection of that decay rate.

So what? And why might these points matter to you?

In sum, sustainable RoE rests on being able to capture, enable and sustain value, and taking advantage of the capabilities needed to do so. This, in turn, requires being able to take a three years back look at what will be needed, and building the programs and practices to do so.  Globally, we’ve seen this movie before.  To note, Africa’s current workforce landscape resembles the history of comparison countries, as depicted below.

 

The similarity in skill-set profile of these countries depicted in Figure 6 with that of South Africa, and other fast growing African countries is striking.  Of use, however, is insight into the steps taken by both commercial and government actors within these countries to build the conditions for sustained growth, partially by targeting the types of capabilities needed to nudge the ecosystem in specific directions for ongoing growth.  We will return to this point later.

 

Implication #3: It’s about Risk Sharing

Building sustainable, and relevant, capabilities is embedded within an ecosystem of different actors, each with their own priorities, motivations, incentives and timeframes.  One cannot control an ecosystem much as no single person, or firm, can dictate the behavior of the world wide web.  However, one can influence the shape of that ecosystem through influencing its behavior.  But, doing so cannot be done alone.  It requires collaboration to accelerate what needs to get done in a way that mitigates your risk of doing so.  So, the question becomes, how do you mitigate your risk tackling a very hard problem – of building sustainable capabilities – in a way that requires working with others.   The answer needs to involve figuring how to share, if not transfer, risk tied to shared outcomes.  No easy task. 

Here are three lessons learned about how to take on this task:

• First, define clearly the foundations of any sustainable set of capabilities. 
• Second, focus as much on pre- and on post-conditions for any investment and effort on the specific skill-sets that need to be developed, at scale.
• Third, different organizations take on different parts of the ecosystem, together influencing it in a way to build the conditions for sustained impact.

Each of these points is discussed below, sketching an ecosystem of the New 10,000.

The figure below suggests such an ecosystem.

 

 

The new 10,000 rests on a foundation of information transparency, digital literacy, and access. By foundation, we mean capability infrastructures to support the development and deployment of a wide range of services and capabilities critical to meet the objective of creating The New 10,000.  Domains make up the capabilities critical to capture, enable and sustain the value defined by each of us.  Services are made up of specific activities, practices or projects – the delivery channels of the capabilities.  Each service has clearly defined objectives, metrics and impacts to create, if not extend, the types of skill-sets needed. 

The domains listed here are merely suggestive.  Clearly, different businesses will have a different set of capabilities needed, at differing times.  The point here is to suggest that different capabilities can be delivered through a set of different services.  However, each rests on the foundations of information transparency, digital literacy and access – both to the capability domains as well as to the services that deliver them.  The framework here is also intended to suggest a pragmatic way to start thinking through where different firms might focus, recognizing that it is the connectedness of these interactions that is critical to build some of the conditions for sustained impact. 

Answering the “so what do I now do” question

We’ve suggested three implications of creating a (desirable) new problem around The Same 10,000.  No doubt, many of us would agree that the same 10,000 would be a fine problem to have.  Two questions become: so what do I do now?  And, what specific to dos come out of this discussion that can be addressed, simply and pragmatically? 

Three recommendations. 

First, clarify your emerging sources of value, taking a three-years back view.  Value is derived from your people – the knowledge / insight / assets in their heads that gets codified into processes and business rules, products and services, at scale, that meet if not exceed your customers’ requirements and expectations.  It’s that simple, yet also that difficult.  Clarifying that value, and being able to sustain it, is a long-term game, rather than a set of short-term transactions.  Consequently, arguably three of the most critical questions that need to be asked are:

• how are you capturing (shifting) value,
• how are you enabling it, and
• how are you sustaining it?

Businesses remain successful when they ask, and answer, these questions frequently – and when they stress-test the assumptions that underlie their answers.  Why?   Because customer requirements and market conditions shift.  However, the processes, people and technologies that we tend to rely on were  developed for a customer and competitive world that no longer exists – hence the pressures on catch-up, the calls for ongoing innovation, and the need for new capabilities to re-catch value, enable it, and sustain it.  Being sensitive to the half-life of one’s value, and what makes up that value, has significant implications on the types of skill-sets needed.  This first point on clarifying your emerging sources of value, from a three-years back perspective, is designed to “pull you out of what you’re currently doing” and pragmatically focus on where and how value is shifting, to design from a “future-back” perspective, strategies to create value, partnerships to enable it, and capacities to sustain it. 

Second, train your teams to shift what is typically looked at (e.g., the unit of focus) – from particular capability-build programs to the ecosystem in which they are embedded.  Building the conditions for sustained impact requires this shift of focus, recognizing that you are embedded in an ecosystem of actors, with both competing yet aligned interests in building conditions for sustained impact.  The implication of this shift in focus requires figuring out how to nudge parts of the ecosystem in a way that increases the sustainability of your needed capabilities as it shifts risk of its development.  The New 10,000 framework suggests that building conditions for sustained impact rests on the foundations of information transparency, digital literacy and access.   One can have all of the training programs, define all the capabilities (domains) and set up all of the services imaginable, but without the foundations in place, they will be remain impossible to sustain financially and at scale.  Equally importantly, without as much attention on the pre- and post-conditions as on any of the elements within the new 10,000 framework, the fundamental objective of building sustainable impact will not happen.  The New 10,000 framework is a high level depiction of an ecosystem for building the conditions for sustained impact.  No one firm can be expected in play across this ecosystem; however, everyone will be impacted by it, requiring changing the unit of focus from any particular part of the ecosystem to how to influence its shape.

Third, mitigate risks through outcomes-based partnerships.  Partners can share the risks if aligned to common objectives and supported by a crisp operating model.  It’s easy to articulate high level and shareable objectives.  It’s less easy to translate those into a set of operational activities that create the traction and results needed.  Lots of reasons exist for this, which many of us have experienced.  Two specific steps to increase the likelihood of an effective partnership includes, first, spending as much attention on the pre- and post-conditions as on the specific activities to perform.  A second step involves what we call a “chunking” approach to strategic decision making.  Chunking is a non-technical term for designing work in such a way that it offers discrete benefits that fits into a broader portfolio of projects with their own benefits over time.  Chunking is analogous to fitting together a puzzle with lots of parts.  The analogy breaks down, pretty quickly however.  Building the conditions for sustained impact has no hard, bounded, edges as does a puzzle.  Things change, requiring an approach to decision making that both anticipate as it exploits those changes – which is why the first action step recommended is to take a future-, 3-years, back view on strategies to capture, partnerships to enable, and capabilities to sustain value. 

 

Let’s create a new problem: Summary

Sustainable job creation is an imperative which can only be realized by:

1. Building the conditions for sustained and sustainable creation – for both demand and supply.
2. Deepening capabiliites – and capacity of more people having the relevant skills, and competencies to capture, enable and sustain value.
3. Recognizing the opportunity and imperative to create outcomes-based partnerships that shift risk as they “raise the capability-tides” for everyone.

What we all know

We all know the demographic challenges we’re facing.  We know that Africa has added 37 million stable jobs since 2000, but that 63% of the labor force remains in vulnerable employment.  We know that Africa’s labor will grow by 122 million users during this decade and will be the largest in the world by 2035.  We also know that the share of stable jobs varies across countries.  We know that the effectiveness of many of South Africa’s largest businesses, particularly banks, telcos and retailers rely both on the markets within South Africa as well as throughout the continent.  We also know that discussions of “Rest of Africa,” from a South African perspective, makes no sense.  There is no Rest of Africa; but rather multiple economic corridors that make the entire African expansion from a business perspective fraught with risk unless insight and understanding of the granular sets of economic transactions that make up these corriders are considered. 

We all also know that, in South Africa, a perfect storm is developing given the growing work population yet the mis-match between skills needed to drive our businesses and, consequently, the South African economy. (In the 18^th century in Europe, a similar mis-match occurred between demographic growth and skill-set needs.  The result?  A strong divergence between the haves and and have nots, resulting in significant social unrest as well as a shift from the economic strength of France to the upstarts Holland and England.  Are we witnessing similar early trends here?) A significant risk exists: a recovery in growth will not bring about a comparable recovery in employment – reflecting this mis-match.  This risk has become a reality, from a global perspective, as slow upward trends of GDP growth, consumption and trade investments are not linked to upticks in employment. 

This mis-match is likely to become worse in South Africa for three reasons.  First, we have a talent mix deficit – in terms of the capabilities needed to capture emerging sources of value.  It is not enough merely to do more with less; we must also do new – requiring new capabilities to capture, enable and sustain value.   Many existing jobs are of low quality and fall within the informal sector.  In South Africa, we are witnessing increasing university graduate unemployment as well as the persistence of working poverty.  Second, we have a talent source deficit, whereby we are not capitalizing on available talent.  The employment-to-population ratio was 45.5% in 2012, meaning that fewer than 1 out of 2 people of working age work, including only 1 out of 5 women who work in the formal sector, significantly lower than the global average.  Third, we have an information match deficit – whereby matching labor supply with demand is difficult, creating dark, fragmented insight into where even to go to find work.

Therefore, what we need do

Building the conditions for relevant and sustained capabilities rests on information transparency, ditigal literacy and access.  The specifics of which capabilities to build rest on insight, and action, on how value can be created, enabled, and sustained. These are hard but tractable problems, requiring no less than a workforce transformation that involves as much managerial innovation as it does technology enablement.  That’s why re-casting the strategic challenge as building the conditions for sustained impact has the implications on a) recognizing that we are embedded in network of dependencies to build those conditions, b) that such connectedness is key to strengthening our RoE, and c) opportunities exist to share risks through outcomes-based partnerships. 

Interestingly, we’ve seen this movie before: we’ve seen it historically, drawing upon lessons from other countries in their efforts to build new capabilities to capture, enable and sustain value.  We’ve seen it from industry transformation perspectives, whereby as much attention is spent on managerial innovation – new ways of “making sense” as on “taking action” of hard problems.  And, we’ve seen it from the few companies who have been able to transform themselves, because they have recognized the need to figure out how to nudge their ecosystem in a way to shift risks as they put in place steps to capture, enable and sustain value. 

So, the question is easy: how do we build the conditions for sustained impact from relevant skills to create a new problem of the Same 10,000?  It’s the answer that is devilishly tricky.  But, lessons exist as to what to do and how to do so – following the wisdom of great carpenters.  The question is: what tools can and are you willing to bring to the table to tackle this urgent, critical challenge, now?