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THE NEXT NORMAL 1
The Next
Normal
Capabilities and the
next generation of work
WWW.CAPABILITY.CO
MARCH 2023
THE NEXT NORMAL 2
Copyright
© Capability.Co. March 2023
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Author
Dr Marcus S. Bowles, Director & Chair, The Institute for Working Futures Pty Ltd,
&AdjunctProfessor,TorrensUniversityAustralia
The most common
leadership failure
stems from trying
to apply technical
solutions to adaptive
challenges
– RONALD A. HEIFETZ
THE NEXT NORMAL 3
Capabilities and cutting through the mumbo jumbo of skills and jobs 4
Background 4
Introduction 4
The mumbo jumbo of jobs and skills 5
Extending thinking to a future state without jobs 6
Moving beyond job performance to adaptive capacity 8
Skills 8
Competence and competency 9
Capability 10
Why capabilities are the currency for the next generation workforce 12
A capability framework 15
Inner human capabilities and why they matter 16
Conclusion 18
Endnotes 19
Contents
THE NEXT NORMAL 3
THE NEXT NORMAL 4
Capabilities and cutting
through the mumbo jumbo
of skills and jobs
Background
Thispaperistherstinanewseries,the
Next Normal. It builds on the success of the
New Normal white papers released in 2020
by The Institute for Working Futures Pty Ltd
(WorkingFutures™)duringtheheightofthe
COVID-19 pandemic.
This series of research and summary white
papers are sponsored by Capability.Co.
TheNextNormalserieswillprovideinsights
thatpromoteviablesolutions.Theaimis
tobypasstheovercrowdedbandwagonof
self-proclaimed ‘experts’ drowning out any
scholar or practitioner making informed
observationsabouthowtopreparepeople
and organisations for the future of work.
Rather,WorkingFutures™willofferevidence-
based insights from work with leading
organisations that outline not only why
but also how certain solutions work. These
solutionswillcontributetosolvingsomeof
themostvexingproblemscurrentlylimiting
howpeopleandorganisationsdiscoverand
reach their potential in the next generation
(NextGen)ofwork.
Introduction
“Sooner or later, everything old is new again.”
– Stephen King, embellishing on Jonathan Swift
The growth of employment in Australia
is dominated by high-skilled work in new
economicactivities.1 Despite the fact that
routine low-skilled jobs are automated
and employment demand has stagnated
asarelativepercentageofthetotalworkforce,
labourshortagesstillexist.However,
employmentisrapidlyincreasinginactivities
where technology is harnessed alongside the
cognitivecapacityofhumanstodrivegrowth
in the dynamic new economy.2
In the past, the demand for both employment
andskilldevelopmentoccurredwithinexisting
industries and known areas of economic
activity.Today,aswelooktotransformand
driveeconomicgrowth,theNextGenworkforce
is essential to areas where nations are
creatingneweconomicactivities.
Theimperativetoreorientlearningandtalent
developmenttobuildnewcapabilitiesis
well-understoodbyorganisationsthathave
undertakendigitaltransformation.However,
thisimperativeseemscompletelylostinthe
current national skills and jobs debate, which
hasmadeedglingeffortstoremediate
complex problems caused by the shift away
from existing job and career hierarchies.
No-one wants to spend time correcting
languageorarguingoverthemeaning
of key terms. But we must to cut through the
mumbo jumbo surrounding jobs and skills.
Ifwewanttostimulateviablesolutions,we
must challenge any effort to ‘dumb-down’
complexconceptsintooverlysimplisticterms
and discordant approaches. This is necessary
as we are in danger of ignoring non-traditional
solutionsthatmovebeyondasolefocuson
technical skills and job performance, to grow
humansinwaysthatenhancetheadaptive
capacityofnotjusttheindividualbutalsothe
entire organisation.3
Speed is essential. Neither employers
norgraduateshavethetimetowaitfor
educational solutions that look backwards
towardsskillsandjobsthathavelittle
relevancetotheNextGenworkforce.
This paper sheds light on key terms
andhowtheyttogetherinworkforce-
developmentstrategiesbasedonideas
originallyputforwardbyWorkingFutures™
in the mid-1990s.4 With nearly 30 years of
researching and writing capability models, it is
unfortunate that in 2022 the hyperbole on skills
and jobs is still occurring in an echo chamber
that pays so little regard to what skills or
employabilitywilllooklikeinNextGenwork.
THE NEXT NORMAL 5
The mumbo jumbo
of skills and jobs
In 2022, the newly elected Federal Australian
Governmentinitiatedaconversationwith
the nation about skills and jobs. The outcomes
being sought were far reaching:
‘Government, employers, unions and
the broader community will take forward
initiatives to help build a bigger, better
trained and more productive workforce, boost
real wages and living standards, and create
more opportunities for more Australians.’ 5
In this context, 100 roundtables were
conducted across the nation, alongside a
national summit to bring together businesses,
employersandworkerrepresentatives.
The national outcomes sought to construct
a set of insights and solutions for issues such
as skills/labour shortages, job security, skills
andparticipation,adropinrealwages(pay)
and employment opportunities in new and
emergingindustries.However,thelanguage
usedseemstoreverttotraditionalideasabout
skills/jobsand‘solutions’thatdependheavily
on using public funds to expand traditional
vocationaltrainingandhighereducation
providers.Asnewareasofworkgrow,these
approachesarerelevanttoadecreasing
proportionoftheoveralleconomy.Atsome
stage the situation will reach a tipping point,
but we can’t afford to wait. The need for
change is already clear.
Itisproblematictotrytosolvefourth
industrial-age skill supply shortages by
relying on mechanisms and ideas from a
previousindustrialage,asthiswillreduce
speed,exibilityandprecision.
Large-scale industrialised education
institutions work best when suppling skills that
are consistent with jobs that neatly line up with
occupationsandverticalcareerhierarchies.
Although this approach worked for nearly
a century whilst we had stable trades and
professions, it is completely misaligned to
NextGenworkwherecognition,non-routine
and human work approaches are dominant.
Most students and workers seek to raise their
employability and build sustainable careers
inevolvedformsofwork.Althoughcareer-
advisoryserviceslaginschools,judicious
regard for salary and future employment
opportunities still shape choices. In the
past,manyfoundworkandtooktheirrst
careerstepsvialabour-intensiveroutine
low-skill jobs, but these jobs are now in
decline because automation has reduced
employment growth and placed pressure
onaveragewages.Althoughlabour-intensive
non-routinelow-skilljobs(e.g.storeperson,
aged carer) still exist, employment is growing
more rapidly in the newly minted work roles
and careers in digital, data and renewable
elds.Thesenewrolesaretypiedbyhigh
averagesalarygrowthandexiblework
arrangements due to businesses across the
worldcompetingtollcriticaltalentshortages
thatdeterminetheircompetitivenessinthe
new economy. These growing employment
opportunities are emerging in areas where
therearenoqualications,traineeshipsor
professions.
These new fast-growing work and career
areasalreadyhavesevereskillandlabour
gaps due to the fact that supply from
traditional publicly funded education
mechanisms in response to market
demandhasbeeninadequate.Thismeans
thatanysolutionservedbyfundingthe
existingconveyorbeltoftertiaryeducation
qualicationswillarrivetoolateandsocause
undesirableconsequencesforworkers,
employers and the broader economy.
THE NEXT NORMAL 6
Extending thinking to a future
state without jobs
“The world of work has always been evolving.
COVID-19 has just brought a giant dose of
reality to discussions about what this means
for workers, employers, governments and
society in general.”
–SimonHann,CharteredAccountantsANZGroup
ExecutiveEducationandLearning
Thenarrativeatthenationallevelistoexpand
beyond traditional concepts of skills and jobs.
Inthiscontext,therststepistoescapethe
language and mental constructs supporting
an industrialised approach to education and
trainingthatlinktheacquisitionofcertainskills
orcompetencieswithanygivenjob.
The mumbo jumbo of jobs and skills obscures
the rapid progress that has been made in
the last decade. For instance, where research
andapplicationhaveveriedwaystodevelop
the tacit, soft skills or to measure and grow
mindsets.
Theneedistoraiseourvisionandlanguage
beyondtheskillstiedtoperformingactivities
and tasks, beyond the competency tied to a
specicjobandacareertiedtoadiscipline,
toadoptabroaderdenition.Wemust
developsolutionsthatcoverworkrolesacross
occupations and ignore industrial boundaries
tobetterreectemployabilityintheNextGen
labour market. We need to build workforce
capabilitiesthatprepareworkersforexible,
future oriented careers.
Digitaltransformationandautomationhave
seriouslyerodedtherelevanceofexisting
methods used to describe and classify skills
andactivitiesintojobs.Afterall,organisations
cannot accurately predict future workforce
needsandthendevelopaskillsstrategy,
manage talent or organise succession
planning/careerpathwaysusinginexiblejob
classicationsfromapreviousindustrialage.
Oldoccupationclassicationslackrelevance
andhavebecomeapoorbasistopredict
whereinvestmentisrequiredtosupplythe
requiredfutureskillsandproductivecapacity.
For instance, 2020 predictions suggested that
more than 80% of the 280,000 new-collar
jobs6 being created in Australia by 2025 are
notreectedinthenationaloccupational
classicationsysteminAustralia(i.e.ANZSCO)
or the O*NET content model used in the United
States.7 Many work roles currently
being created are human centric: they
are constructed with greater emphasis
oncognitiveactivitiesorbyreshapingthe
rumpofhumanactivitiesleftoverasolder
jobs become automated.8
When it comes to changing our language
and thinking about jobs, the challenge we
face is a large one.
Weneedtoescapedeningwhoweareby
the job we hold. After all, our job does not
deneourpersonalpotentialnorourfuture
valuetoanemployer.Weknowthatfourout
ofevery10jobsthatwillexistin2030do
not exist today, and, therefore, we need
policymakerstotaketheprotectiveguard
rails off solutions that suggest a young person
completing high school has an educational
trajectorytiedtoaspecicjoborcareer.9
We need to go beyond the short-term
performance-centricviewofhumancapital,
i.e.theideathatthevalueofapersonand
workforce is entirely judged by how well
they can deploy skills or competencies in
jobrolestoproduceeconomicvalue,ina
speciccontext,today.Thisapproachreects
thepreviousindustrialage,and,inaworld
wherehuman-centriccognitivenon-routine
activitiesdominate,itcompletelymisesthe
mostimportantpartoftheequation–the
abilitytoadaptandpositivelyrespondto
future opportunities.
Although the focus on skills and competence
iswarranted(currentproductivecapacity)10, it
requiresafocusonmindsetandinnatefactors
thatshapeculturalalignment(futurepotential
productivecapacity).Whetherexamining
thevalueofapersontoanemployer,orthe
organisationtoaninvestor,itisthepotential
productivecapacitywherethefuturevalue
resides. Failing to measure this capacity
dilutesthevalueofavailablehumancapital.
We need to build organisational cultures
where leaders, particularly at the team
andmiddlemanagementlevels,domore
than solely focus on job performance. In a
mechanisticmodel,managersbaseindividual
developmentonperformanceagainst
tangiblejobspecicationswiththeirnarrow
industrial rules outlining skills and competency
requirements.11
THE NEXT NORMAL 7
Thisisaninsufcientwayofdevelopingthe
future potential of workers. Instead, managers
must look beyond role competency to
ndandfosterthedevelopmentoflatent
capabilitiesinindividualsandgroups.This
meansthatorganisationsmustinvestin
providingmanagerswithnewtoolstohelp
raise employee engagement and ensure that
newrecruitsaremotivatedtostaywithan
employertollfutureroles.12
Employers also need the human-resources
teamtosponsorthehigh-orderdevelopment
oftalentandcapabilitybeyondtheconnes
of any job or function. One example of this is
adapting to manage succession or retention
activitiesinatterorganisationalstructures
using cross-functional teams, missions,
squadsortribesthatenhanceorganisational
responsivenessandagility.Anotherexample
isundertakinginnovativeapproachesto
ndingandllingcriticaltalentshortages
in one function area by mobilising talent
misaligned or hidden in a seemingly unrelated
functional stream. Ultimately, organisations
cannotpreservehumanresourcesand
talent-management approaches that adhere
to traditional skill and job hierarchies or
occupational boundaries at the expense
ofimprovingagility.
Justasthenationalnarrativemustchange,
so must employers in the more dynamic,
complexanduncertainactivitiesofthenew
economy.Inresponse,theymustdevelopa
guiding purpose and a culture that wants to
engageanddevelopeveryemployeetolearn,
adapt,thinkcritically,problemsolve,innovate,
collaborateandachievemeaningfulcustomer
and social outcomes.
Whatwedonotwant,isadividedeffortbased
on a poor understanding of language and
intent. The worst scenario is for employers
who need to be agile and compete in the
new economy pulling one way to build their
workforce capability, and a national debate
only pushing solutions for employers seeking
tollstablejobsthatcanaccesshighvolume
solutionsfrominstitutionsbestequipped
to supply skills for traditional, industrialised
vocations.
THE NEXT NORMAL 8
‘Falsehood ies, and truth comes limping
after it.’
– Jonathan Swift
TheEnglishlanguageisverydynamic,
continuouslyevolvingandchangingthrough
use.Unfortunately,evolutionofaconsistent
taxonomy can fail to emerge. This is true for
the skills, competency and capability debate.
Business,educationandgovernmentappear
to use the same terms but often with different
meanings. The distinction between them is
important. By exploring these differences,
we can appreciate why understandings or
perspectivesmayvary.
This is not to say that educators or employers
use the terms consistently. Rather, employers
(particularlyinthesystemsdevelopment,
strategy, talent, human capital and workforce-
planningareas)takealong-termperspective
that extends well-beyond current earning
outcomes and job performance. Skills,
competencies and capabilities form different
buildingblocks,whichcollectivelybuilda
workforcethatcanevolveandachievethe
organisation’s current and future strategic
outcomes. Capability is used to create
auniversallanguagethatlinksindividual,
workforce and business outcomes.
Unfortunately,thedenitionallinebetween
skills, competencies and capabilities has
always been nuanced. The problem occurs
when the terms are used interchangeably or
in ways that are not aligned with intent. An
exampleofthisiswheninvestmentismade
in technical-skills training but the intent is
toraisetransverseskillsthatenhancethe
employability of new school graduates across
many occupations. Another example is when
vocationalcompetencyapproaches13 are
usedtodevelopbehavioursviacompetence
or capability approaches.
Analexampleiswhenacompetency
framework is simply renamed a capability
framework without appreciating why the
existingmeasurementandevaluationcannot
be extended to support human capital
measurement or workforce-capacity planning
aspartofave-yearstrategicplan.
Inordertodrivetalentmanagement
and future success, increased precision in
conceptsandpracticesarerequired.Withthe
current mumbo jumbo and imprecise use of
terms, this is not possible.
Skills
Askillcanbethoughtofasaspecicl
earntabilitythatanindividualpossesses.
The skill may contribute to performing well in
apredenedtaskoractivity,anditistypically
appliedinaspecicsettingtoaccomplish
apredeneddesiredresult.
The distinction between hard and soft
skillsisoverused.Ontheonehand,askill
is considered ‘hard’ because it is technical
andcanbeeasilycertied;itiswidelyheld
that these types of skills dominate when
prolingtechnicalandprofessionalroles
and occupations. Hard skills tend to be
explicit, transferable through learning and
demonstrable.
On the other hand, soft skills are non-technical
andmaybeusedtoprolemanyrolesand
occupations;theytendtobetacit,hard
tocodifyandteachandcanbeobserved
in practical contexts or through social
interaction.However,asshowninTable1,
non-technicalorsoftskillsalsohaveseveral
other descriptions.
Moving beyond
job performance
to adaptive capacity
THE NEXT NORMAL 9
TheO*NETclassicationframeworklists
softskillssuchasactivelistening,persuasion,
instructing, coordination, judgement and
decision-making.15Cognitiveskillsinclude
critical thinking and analytical reasoning.
Transverseskillsincludeproblemsolving,
collaboration,innovationandcommunication.
Related skills can be bundled into
competenciesthatunderpinabehaviour
orperformancerequirementinajob
or occupational outcome. In forming
competencies,theknowledgerequirements
are also considered. The concept
of knowledge is associated with the
requirementstoperformaspecictask
oractivitythatcanbetransferredthrough
learning or experience.
Competence and competency
The original intention of authors such as
DavidMcClelland(1973)wastoestablish
competence frameworks that identify
the underlying characteristics, skills and
knowledgethatcouldbe‘clustered’todened
outcomesinspecicjobrolesorfunctions.16
Subsequentbehaviouralapproachesframed
‘competence’ as being more than just
achecklistconrmingtaskperformance,
the intent being that the underlying
characteristics and nature of a person
are better predictors of performance.17
Most competencies draw on theoretical
constructsdevelopedbytheearliestwriters
intheeld,notablytheearlyworksbyArgyris
(1962)18andBoyatzis(1982)19. Boyatzis was
specicallyinterestedincompetency-
based approaches to management training,
educationanddevelopment.Insimpleterms,
hesaweffectiveperformanceasbeing
dependent on three factors: job demands,
organisationalenvironmentandindividual
competence20. Unlike earlier theorists such
as Mintzberg, who emphasised the different
waysmanagersperformedspecicwork,21
Boyatzis sought to integrate these factors into
acommonsetofperformancerequirements.
Later authors working on leadership or
functional competencies broadened the
focus to include core competencies that
all employees should possess to secure
career progression and contribute to the
organisation’scompetitiveness.22
Table1Alternativedescriptionsfornon-technicalorsoftskills
Skills Terminology Denition
Employability skills Thenon-technicalsoftskillsthatplayasignicantroleincontributing
toanindividual’seffectiveandsuccessfulparticipationintheworkplace.
Cognitive skills Cognitiveskillsrelatingtohowwethink,read,learn,remember,
reason and pay attention.
Foundation skills These are fundamental to participation in work and life.
They are a combination of language, literacy and numeracy skills
aswellascognitive/reasoningandemployabilityskills.
Transversal skills UNESCOdenestransverseskillsasthose‘thataretypicallyconsidered
asnotspecicallyrelatedtoaparticularjob,task,academicdiscipline
orareaofknowledgeandthatcanbeusedinawidevarietyofsituations
andworksettings(forexample,organisationalskills).14 This skill category
is often addressed by the 21st-century skills model used in school systems
across the globe.
Enduring skills Slow-to-change long-lasting lifelong skills and traits that fundamentally
allowapersontoourishinlifeandwork.
THE NEXT NORMAL 10
Thebehaviouralapproachtocompetence
design,developmentandtestingisthe
primary model in the US and in global
companies where competence models
such as McLelland/ McBer and Lominger
were deployed. These models produced
behaviouralcompetenciessuchasanalytical
ability,initiative,negotiation,intellectual
horsepower, strategic thinking or
self-management.
Although many organisations across the world
maintaintheUSbehaviouralcompetence
approach for national systems, the reality
isthebehavioural‘input’approachwas
deliberatelypassedoverbymostcountriesin
favourofavocationalcompetencyapproach.
23Assessingbehaviouralcriteriatopredict
performanceistoofarremovedfromaperson
demonstratingcompetencyinagivencontext,
to an agreed standard and across a range of
variablesthataffectapplication(e.g.different
technologyorcompliancerequirements).24
Accordingly, for the design of national
education and training systems using
competency-based approaches, the
community shifted its focus to assessing
competency based on an agreed-upon
standard of performance expected at any
givenlevelofwork.Thisapproachhasbeen
historically embedded in guild and trades
areasofGermanyandmanyotherEuropean
countries, but, from 1988 to 1998,
itwasadoptedacrosstheworld(e.g.UK,New
Zealand, Australia, South Africa, Singapore and
Malaysia).
The main pillar of these national systems
was the use of occupational competency
frameworksthatspeciedastandardfor
technicalandvocationalperformance.
National competency standards frameworks
in Australia and New Zealand, for instance,
soughttohaveeachindustrydeneabroad
specicationoftheskills,knowledgeand
attributesrequiredtoperformparticulartasks
anddutiesinagivenoccupation.25
Thesemodelsproducedavarietyof
vocationalcompetencies,suchasperforming
in an ethical manner, building a database,
advisingandmanagingsecurity,assessing
andrespondingtoindividualriskandinitiating
and leading applied research. As stated,
each competency sets a standard for the
expectedjobperformanceatadenedlevel
ofprociency.
Capability
The origins of capability were originally
positionedinverydistinctwayforbusiness
andworkforcedevelopment,andlaterfor
education. Early research attempted to
identify and measure human abilities that
are forward looking and transcend job
or role outputs.
In the 1980s, as a mechanism to measure
humandevelopment,theIndianeconomist
and Nobel prize winner Amartya Sen proposed
the capability approach, which sought to
directly counter utilitarianism and resourcism
approaches to determining a person’s
economicvalue.Senarguedthatthemost
important thing is to consider what people
are actually able to be and do.26 The aim
is, therefore, to reduce the constraints that
impairanyindividual’sabilitytoexpandtheir
capabilitysetandachievethetypeoflifethey
want to enjoy.27
In the mid to late 1990s, the term capability
was being tied to how organisations respond
toenvironmentalchangeandcompetition.
Asearlyas1996,CharlesSavagepredicted
that the ‘basis of wealth is shifting from that
which is possessed as a commodity to the
valueofhumancapability’.28DavidTeece
(andhiscolleaguesGaryPisanoandAmy
Shuen)codiedatheoryofrmperformance
called the Dynamic Capabilities Model.29
Indoingso,theymovedawayfromtryingto
describe static and stable competencies that
are core to an organisation, common
toafunctionorspecictoajob.Instead,they
deneddynamiccapabilitiesas‘theability
tointegrate,build,andrecongureinternal
and external competences to address rapidly
changingenvironments’.30
Capabilities can be embedded and expressed
injobprolesandoperationalprocesses,
but the underpinning idea of the dynamic
capabilities model is that they transcend
operationalskills.Moreover,theyareinherent
ineachpersonandinhowanygivenculture
(anditsvalues)isexpressedwhenperforming
or making decisions.31 Capabilities are,
therefore, fundamentally strategic.32
THE NEXT NORMAL 11
Skills
Tasks & Activities
Competencies
Capabilities
Capability
Few
Many
A workforce level effort to determine the capacity to deliver
performance today, plus the potential for an entity to adapt
and deliver its strategy and culture tomorrow.
Competency
The skills and knowledge required to achieve job outcomes
in functions that are sorted and relate directly to an individual
attaining certain standards of performance irrespective
of who they are or the context.
Tasks & Activities
Combination of skills applied to achieve defined output
within a job, activity or responsibility.
Skills
The building blocks that underpin demonstrated performance.
Asorganisationsnavigatedincreasingly
turbulentanddynamicenvironments,
thefocusshiftedtodevelopinghuman
capabilities that both raise a person’s
potential to access their preferred careers
andelevatetheorganisation’scapacityto
be agile.33Althoughorganisationsoftenhave
capability frameworks contextualised to their
needs, consistency became the main aim.34
Acapabilityisnotauthoredtoachievethe
same outcome as a skill or a competency.
Capabilities can co-exist with competencies
(behaviouralorvocational)andskills,
howevertheyareorientedbeyondthescope
of skills or competencies. This is consistent
with McClelland’s opposition to using
criterion-referenced assessment to measure
behaviouralcompetenceandthusdetermine
a person’s likely performance in a job role
whileignoringtheirfuturepotential(beyond
thatrole)ortheperson’sculturaltandability
to be promoted.35
Inessence,thedevelopmentanddeployment
of capability frameworks by an organisation
orprofessionreectsanenduringdesireto
improvetheadaptivecapacityofindividuals
and the workforce to respond to their
environmentandanyfuturecontingencies.36
It is important to establish that capabilities
extendbeyondthetypicalcoverageascribed
to competencies. A capability is:
A high-level denition of the abilities
(skills, knowledge, and innate personal
abilities such as mindset, cognition, or
disposition) that individuals and a workforce
require to adapt and succeed in the future.
It is concerned with the holistic view of an
individual’s ability to perform today and
their potential to improve tomorrow.37
Figure 1: Taxonomy and relationships
THE NEXT NORMAL 12
Thetypical‘job’classicationparadigmsused
bygovernmentsandjobarchitecturemodels
relyonrelativelystabledenitionsofjobs
(occupations),jobfamilies(professionsor
functions) and their hierarchical relationships
and boundaries. Education systems also
expecttheclassicationstoremainstable
so they can supply workers to jobs with the
requiredknowledgeandskillsorcompetency.
TheNextGenecosystemofworkisdominated
byrapidandconstantevolution.The
operatingenvironmentisinastateof
constant instability and ambiguity, and
thus an organisation’s system, strategy and
structure must become more agile and
able to respond rapidly. For businesses, this
meanshavingastrongguidingpurpose,
embarking on digital transformation, using
data, automating repeatable technical
activitiestoreducerelianceonhumans,
focusing on changing customer needs and
buildingmoreresponsivebusinessmodels
and structures. It also suggests that Frederick
Taylor’searlyindustrial-ageidealsofscientic
management and mechanistic approaches
to work and specialist skills training for
workers38haslimitedrelevanceinthefourth
industrial age.39
Whatisrequiredinthefutureismore
dynamic interaction of human and digital
structures,whichwillallowpeople(andthe
organisation of work) to organically adapt to
a changing world.40 The COVID-19 pandemic
has accelerated the search for greater
responsivenessandresilience.
Jobs are being unbundled into component
activitiesandtasksandresortedas
hierarchiesareattenedandworkroles
executed in cross-functional approaches
promoted by methodologies such as Lean,
AgileandDevOps.Newmodelsofworksuchas
hybrid, freelance and contract are seeing skills,
knowledge and personal attributes resorted
into new work roles that pay little regard to the
educationconveyorbelttargetingoccupation,
functionorevenindustryboundaries.
Consequently,theconnectiongraduates
hadlinkingqualicationstoareasofnew
employmenthasbeenlostinthisrecongured
world of work.
The capacity of a workforce is one of the major
resource issues determining strategy. Skills
and competency frameworks are excellent
means of enhancing work performance
across roles, but they are too cumbersome
whentryingtoraisetheadaptivecapacity
of a workforce responding to unknown
futurecontingencies.Whenyouaremoving
at speed and working across disciplines or
occupationalclassicationsandcreating
new work roles to effect rapid change and
innovation,employersneedasfewleversas
ispossiblethatcanbepulledtoimprovethe
capacityoftheworkforcetodelivercultural
and strategic outcomes.
Why capabilities are the
currency for planning the
next generation workforce
THE NEXT NORMAL 13
Rather than organisation as machine, the agile organisation is a living organism.
Bureaucracy
Detailed
instruction SILOS
Top-down
hierarchy
Quick
changes,
flexible
resources
“Boxes and lines”
less important,
focus on action
Leadership shows
direction and
enables ation
Teams built around
end-to-end
accountability
From organizations as “machines” to organizations as “organisms”
Skills frameworks tend to list an incredible
number of descriptors for standard
taxonomies. For instance, LinkedIn boasts
35,000 standardised skills in its skills
ontology.42 Competency frameworks,
depending on how they are authored, can
also be incredibly large and unwieldy. In 2018,
theAustralianGovernmentlaudedthefact
that the Australian VET system had 68 training
packages containing more than:
–17,000unitsofcompetency;
–1,450qualications;
–1,300skillsets(bundledcompetencies);
– 750 accredited courses that contain
more than 3,550 units of competency
and modules.43
Atthecorporatelevel,itisnotunusual
forframeworkstohavemorethan2,000
unitsofcompetencycoveringover300job
roles.44However,sincetheaverageshelflife
of a technical skill or competency is now
2.5 years, maintenance is both costly and
resourceintensive,45 which, in turn, means
that manipulating workforce capacity
andresponsivenesstoaddressfuture
contingencies is becoming increasingly
problematic.
Atthestrategiclevel,organisationsmust
focus on the few enduring capabilities that
canbedevelopedtooptimisetheworkforce’s
capacity to adapt. Typically, contemporary
professional and corporate capability
frameworksenhanceadaptivecapacity
by focussing on non-technical, human
capability standards.46 Most organisations
haveasfewasvetoeightcapabilities.Some
large professions will use up to 15 when they
encompass both personal or professional
standards. These capabilities support
organisationalorprofessionalresponsiveness
ateverylevelofworkandacrosseverywork
role and function.
Where once demonstrated skills tied to
productivitywastheonlywaytomeasure
workforcecapacityandplaceavalueon
humancapital,technologyadvanceshave
changed the game. Through a combination
ofpsychometricproling,deploymentof
articialintelligenceandmachinelearning
it is possible to predict which human
capabilities employers not only need in the
future,butmakevisiblethecapabilityand
potential within the existing workforce that
had been hidden.47
Figure 2: Agile and the new dominant organisational paradigm41
THE NEXT NORMAL 14
The skills dimension of a human capability
standard establishes the demonstrated ability
supporting performance of a capability
atagivenlevelofprociency.
Skills(andtheunderpinningknowledge)
constitutethecapacityofagivenworkforce
toperformanddeliveranorganisation’s
strategic outcomes.
The mindset dimension of a human capability
standard establishes a person’s innate
disposition, traits and abilities, which can
shapebehaviour,motivationandthereasons
why people think, emotionally engage, interact
or lead in a certain way.
Indeed, mindsets are foundational to why
people want to apply their skills or wish to
engageinchangeinaspeciccontext.
Awareness of mindsets and related
behaviourscanthusprovideinsightinto
aperson’spotentialtoundertakeNextGen
activities,suchasthinkingcritically,solving
problems, working with customers/colleagues,
innovating,creating,adapting,being
resilient and learning from challenges or the
uncertaintyassociatedwithdisruptivechange.
Mindsetscontributedirectlytothevalues,
culture and purpose an organisation seeks
toachieve.
A human capability standard unites both tangible skills and intangible mindsets.48
Figure3:TheCapability.Cocapabilityequation
THE NEXT NORMAL 15
A capability framework
Capability frameworks extend and
complimentskillsandcompetencymodels;
theycanbeusedtodevelopandassess
avarietyofpersonaldimensions,suchas
personalattributesandcognitivefactors
(so-called‘mindsets’).Capabilities,therefore,
address both explicit knowledge that could
be taught and the tacit knowledge that is
embeddedinsocialrelationships.Theinvisible
tacitdimensioniscriticaltoNextGenwork
because it underpins culture and employee
engagement. More importantly, it cannot
betaught;itcanonlybeacquiredthrough
experience.
A capability framework is a collection of cross-
disciplinary skills, knowledge and other innate
humanabilities(e.g.mindsets,behaviours
andtraits)anorganisationrequirestodeliver
future strategic and cultural outcomes.
Although frameworks can extend from
threetosevenlevelsofworkdependingon
organisationalneeds(seegurebelow),the
capabilitiesthemselvesarestandardsthat
areanchoredtoalevelofprociency.The
mix of capability standards that are core to
allroles(humanornon-technical),common
toafunctionorworkrole(e.g.leadership,
digitalacumenordatauency)ortechnical
competenciesforspecicrolescanco-exist.
An emphasis on the core, human capabilities
thatallowemployerstoidentifyanddevelop
the enduring human-centric, robot-proof skills
and mindsets that allow an organisation
toadaptandevolve.Withoverone-third
ofNextGenroleprolesinvolvingthese
non-technicalenduringtransversesoftskills,
it is possible to plan for work and careers
beforetheyevenexist.49
Figure4:Capability-competencymixbylevelofwork
THE NEXT NORMAL 16
“Vision is the art of seeing things invisible.”
– Jonathan Swift
Everyonepossessesinnerabilitiesthatare
becoming increasingly critical to employment
andcareerchoices.Conventionaleducation
systemsandhiringprocesseshavemostly
ignored these traits by focusing solely on
tangible, demonstratable skills and knowledge
requiredtoundertakewelldenedwork
activities.
IntheNextGenworldofwork,peopleentering
the workforce or changing careers will do
sobecausetheworktsthem,nottheother
wayaround.Employabilityshouldnothave
amyopicfocusonwhatwedonothave
(e.g.skills,qualicationsorexperience)buton,
rather, the enduring human capabilities we do
possess.
Thebiggestchangeinlanguagewhenmoving
from competency to contemporary capability
frameworks is the shift from the person being
recruitedtolla‘job’toappreciatingthefact
that each person has an inner genius, which
oftenremainsinvisibleandundervalued.Itis
theapproachwhereprolingandassessinga
person’s capability is undertaken to determine
not which job they wish to choose and then
lteringcareerandeducationaladvicetothat
narrow future. It is where a person becomes
self-aware of their often hidden, unrecognised
inner strengths and abilities so that certain
work roles and career options become more
natural options.
Tostaycompetitive,employersmustsource
and retain new talent. Rather than using the
‘bigstick’ofperformancereviews,NextGen
employeeswantexibleworkarrangements
andareempoweredtodeveloptheircareer
capabilitiesanddeliverhighlyproductive
organisational performance.50
Because new work roles and methods
(e.g.hybrid,freelanceanddistributed)
are being added to the labour market,
employment opportunities are being
redistributed.51
The critical shortage of talent means that
employers are attracting talent from other
employerswhofailtoofferexibilityorthe
ability to work remotely.52 Users of capability
frameworks are deliberately empowering
diversegroups(e.g.minoritygroups,women
and people with disabilities) by using
non-biasedscienticinstrumentstoassess
andmakevisiblethehiddenundervalued
capabilities that show a person’s full potential.
They are creating opportunities for those
prepared to look beyond their current role to
developtheirpotentialandopennewfutures.
Thiscanbedoneirrespectiveofwhotheyare,
theircurrentqualicationsorexperience,
or their location.
For those looking for employment, the
rhetoric has shifted from meeting job skills
and competencies, to knowing about one’s
inner strengths and how they can be used to
mutuallybenetthepersonandtheemployer
or society.
Strengths in certain human capabilities allow
individualstoidentifythe‘sweetspot’,where
theyhaveanaturaltalentfortheactivity.For
individuals,uncoveringthesesweetspotscan
beagamechanger.Studieshaveshownthat
ndingworkthatalignswithinnerstrengths
canimprovewell-being,fosterhappiness
andstimulateourishingcareer.For
organisations, assessing human capabilities
and mindsets can help with respect to the
hiring/developmentoftalent.Individualswith
a natural disposition and a high potential
todevelopcertaincapabilitieswillperform
better,havefastercycletimestocompetency
and are far more likely to be amongst the
top 25% of high performers.54 According to
positivepsychologists,matchingmindset
anddispositiontoworkinaourishing
environmentwillstimulate:
-Astateofow(fullyimmersed&energised)
- A ‘zone of engagement’ where an employee
wants to be challenged and stretched.55
Inner human capabilities
and why they matter
THE NEXT NORMAL 17
When we work from our strengths, it increases
our interest in the subject matter and makes
it easier to persist when things get tough. Most
people want to learn and work in areas they
are passionate about.
If we can align our capability strengths
to a career that supports our personal
interests and emotions, then our well-being
andenjoymentwillalsoimprove.
Figure5:Wherepurposeandpersonalabilitiesconverge(AfterCsíkszentmihályi,1996)
THE NEXT NORMAL 18
TodevelopaNextGenworkforceanational
debate must occur that has more careful
regard for the language used and the intent
ofourinterventions.
Are we building a workforce to be recruited
and skilled to perform in existing jobs? Or are
we consciously opting to refocus on long-term
employability and enhancing the capacity of
bothindividualsandorganisationstoadapt
to a less predictable future world of work?
Most couldn’t care less what we call human
abilities, but failing to conduct a more
informed debate will only widen the gap
betweenhowemployersorganiseNextGen
workandhowgovernmentsfundeducational
providersaccordingtostrictoccupational
classicationsystems.Formanygraduates
targetingstablewell-denedjobroles,
changemaybelessobvious.However,for
those seeking fast-growing employment
opportunities that can be accessed
irrespectiveofwheretheylive,employability
will be less accessible using traditional
education pathways.
Many hiring decisions are transcending skills
and competencies to include inner human
capabilities and mindsets that indicate our
attitude and the way we think, emotionally
engage with others and continually learn and
adapt. These capabilities indicate a person’s
potential across a broad range of current and
asyetill-denedfutureworkroles.
Irrespectiveofjobroleorcareerchoice,those
seeking to ‘future-proof’ their careers must
possess a mindset that allow them to adapt
toopportunitiesatspeed.Evenifaperson’s
qualicationsandexperiencedonotreect
therequiredskillsortechnicalcompetencies,
makingthesetacit,innerabilitiesvisiblewill
placeindividualshighonthehireradarfor
thoseemployersactivelyseekingtorecruit
adaptableandcognitivelyengagedhumans
tobecomepartoftheirNextGenworkforce.
Conclusion
THE NEXT NORMAL 19
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