McKinsey: Capabilities training for business performance

10 February 2015

Well trained staff, up-to-date on the latest best practice and developed to deal with a wide range of situations, seem like ideal candidates. As part of the wider business performance, firms continue to invest in capability training for their staff, a survey by McKinsey & Company shows. While firms continue to focus on training their staff, many do not have the tools or goals in place to quantitatively assess the value added of the trainings.

McKinsey & Company recently released its second ‘Building Capabilities for Performance’ survey, which aims to discover how firms are currently engaging with staff capability* trainings, identifying trends and comparing those that are doing well against the average to identify what tends to work. The survey is of 1,448 executives, from the full gambit of regions, industries, company sizes, tenures and functional specialities.

McKinsey & Company

Having well trained staff is seemingly integral to the performance of a firm. Half of the respondents globally placed capacity building in their top three strategic goals, with Asian countries particularly pushing for well trained staff, with 62% for India and 58% for China. The high priority for training and retraining staff is not necessarily for competitive reasons, in answering the question: “Factors that most affect how organisations prioritise institutional and individual capabilities”, Customer Demand was ranked highest at 51%, followed by Strategic Importance at 47%, Competitiveness and Primary Drivers of Value sharing third at 35%. The drive toward meeting customer demand can be seen back in the changes in where money is going in terms of training. With an increase of 11% compared to 2010, more money is spent on frontline staff training in 2014, possibly reflecting the need to meet customer demand, face-to-face.

Half of executives rate capability building as one of their comanies top three priorities

The method for training staff hasn’t greatly changed in the last four years, with on-the-job teaching remaining the main method for capability training, with 56% of firms saying they use this method extensively and 37% somewhat; this is followed by one-time internal course conducted in a classroom setting, being taken up extensively by 34% of firms with 54% relying somewhat on this method; Online courses are extensively used by 34%; and experimental methods, such as ‘model offices or factories’ are used the least frequently at 8% and somewhat at 34%, although 54% of firms never use these methods.

On-the-job teaching remains the most popular method for building organizational capabilities

One of the findings of the survey is that there is a significant difference between the businesses that spend considerable time developing the skills of their staff. Only a firth of firms have their human resource and business units co-own learning, where they work together to align learning objectives with business needs.

The top performs in capability building were found to place a considerable importance on a number of key metrics in their staff training, with 78% encouraging their employees to develop their skills continuously compared to the average of 42%. Creating a framework for staff development was also placed highly on the list; with 68% of the top performers saying to be extensively engaged in the development of tools, methods, and standard procedures for capability building, compared to 26% for the average.

Actions to maintain and improve their capabilities

The challenges
While capability building is indicated as an important aspect of business development, especially in a quickly digitalising business environment demanding new capabilities, the way to create effective training and measuring the objective effect of trainings continues to be seen as a challenge. The biggest issue, with 48% of respondents finding it difficult, was to clearly link the development of training programs with business goals, a further 40% of respondents found that the lack of resources for the programmes was a problem, and a lack of metrics seen as the biggest challenge for 36% of companies embarking on staff training.

Biggest challenges in building institutional capabilities

A potentially concerning trend is that more than half of respondents indicate that they do not know if their capability developing programs have reached their quantitative targets in the past three years or they have not set a target at all. Without such an understanding, strategic choices for effective staff development become more difficult to argue for, fund and execute.

* McKinsey defines the term ‘capabilities’ as “all skills, processes, tools, and systems that an organisation uses as a whole to drive meaningful business results. Individual capabilities refer to training, learning, or specific skills.”

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Why leaders must balance technical expertise with soft skills

17 April 2019

Soft skills matter in the workplace just as much as technical expertise, writes Samantha Caine, Managing Director of Business Linked Teams.

For too long technical expertise has been seen as the marker of a strong candidate for development into a sales or leadership position. Sales and leadership candidates are tasked with demonstrating a diverse and wide-ranging set of technical skills, yet their aptitude in these technical skills or ‘hard skills’ cannot signify great leadership potential. This is why a healthy balance of soft skills and technical ability is required. 

So what exactly is the difference between technical skills and soft skills? In engineering, it’s crucial to demonstrate knowledge of physics as well as a strong grasp on mathematical equations. Yet, in any industry, it’s important for leaders to be able to interact with other people effectively with soft skills like communication, empathy and adaptability. 

Business Linked Team’s 2018 study into internal leadership development revealed that 69% of large organisations are prioritising the identification and development of future leaders from within the workforce. As more and more organisations begin to invest in sales or leadership development within their existing workforces, more focus needs to be placed on ensuring the right soft skills are in place. 

With those soft skills in place throughout the workforce, the business will benefit from a wider pool of potential leaders developing under their noses, and it should be the same where sales candidates are concerned. 

It’s not just about easier access to ideal candidates for these positions without the rigmarole of recruiting from outside of the organisation. The leadership development study also found that 89% of HR decision makers say succession planning has become a top priority. Those currently serving in leadership positions can’t lead forever and the same goes for those generating sales for the business.

Why leaders must balance technical expertise with soft skills

From people leaving for new opportunities or retirement, to people simply stepping aside to focus on other areas of the business, successful leaders and salespeople require experienced and capable successors that will be ready and able to confidently step into their shoes and pick up the mantle without the business experiencing any lapse in performance.

Soft skills make stronger candidates

When it comes to the soft skills required, a strong leader must be able to manage through clear communication and effective time management, coaching and goal setting. They must be able to demonstrate empathy and empower their teams to be successful, productive and fully engaged. And beyond simply giving direction, they must also be able to take direction from those above them and cascade the business strategy down through their teams. 

A strong sales candidate must possess the ability to communicate value to the customer, negotiate well and protect margin or the ability to increase the scope of a particular sales opportunity. 

With the relevant soft skills in place, the business will benefit from increased productivity, greater agility against changing market conditions and greater transparency. In turn, this will provide visibility on issues and inefficiencies while removing opportunity for miscommunication. All of this can transform the culture of a department, improving employee satisfaction and reducing staff turnover. 

Ultimately, developing leadership or sales candidates will require the business to strike the right balance between technical skills and soft skills, and this requires an effective and sustained learning journey.

A balanced learning journey

Facilitating and supporting the development of leadership and sales is best achieved by establishing training groups. By cultivating training groups, businesses are creating talent pools that will inspire and support each other on the learning journey. However, personal goals and learning objectives must be defined for each individual based on their own existing skillsets and the skills that each individual needs to develop. 

With the emergence of e-learning, businesses recognise the value of online-based learning activities, yet many make the mistake of opting for one-size-fits-all solutions which are solely focused on self-study. A development solution will only deliver true return on investment if it combines e-learning activities with group learning activities that provide opportunity for shared experiences and support.

A blended learning solution that combines self-study and face-to-face group learning activities will aid strong development of the talent pool through shared experiences. Through these shared experiences, those undergoing the training will organically develop a support network that supports the development of the group as much as it supports the development of each individual. 

The blended learning approach is supported by one of the seven principles of human learning that socially supported interactions aid the individual development of expertise, metacognitive skills, and formation of the learner’s sense of self. The strongest opportunities for development can be unlocked by blending workshops with online activities such as virtual sessions, peer coaching, self-study, online games and business simulations. But it’s crucial to provide a blend of one-to-one and group sessions too.

Beyond delivering a better learning outcome for the employee, the blended learning approach allows organisations to adapt their training quickly and easily to shifting business demands in an ever-changing landscape.