During organizational change, competitiveness only emerges through the building of competence and culture

For a long time, industrial actors’ modes of operation have been relatively stable, static and hierarchical. The focus has traditionally been on production and products, and for a good reason – there’s no denying the importance of consistently good quality processes. However, future trends seem to be leading away from the traditional manufacturing of products. Digital transformation makes it possible to enter new markets and develop customer experiences in completely novel ways while the agile service sector challenges the traditional organizational structures, particularly leadership. All these processes are reflected in the building of capabilities and the development of competence.

What does it take to build new capabilities?

“Innovative business initiatives, as well as novel competences and capabilities, are a requirement for a new type of value creation. Usually, innovations and competence are not only company-internal developments but require being exposed to fresh ideas as well as curiosity, interest and networks that extend beyond the company’s bubble,” says Mari Jokiranta, Business Psychologist at Vincit.
“Novel thinking and implementing a new business model demand a lot from the employees as well. They may suddenly find themselves in a situation where they need to self-direct and self-manage more than before,” says Karita Lehto, Head of People and Culture at Bonsky. “By acting in accordance with the company’s values, paying attention to the employees’ coping and wellbeing and offering opportunities for self-development, the company will ensure that it stays on top of their game during rapid development. Being approachable and offering support should not be forgotten either,” Lehto continues.

Competence development happens at the workplace – no courses needed

According to Jokiranta, fast-paced operative work often stands in the way of innovative thinking. “Being in a hurry narrows down your thought processes. Since competence development is seen as something that is carried out by taking different courses, the hectic pace of business also makes it seem like no time is reserved for adopting new technologies or methods. However, future competences shouldn’t be developed in courses but alongside operational skills, as part of daily routines. Companies should provide their employees with development opportunities, so that the acquisition of future competences wouldn’t fall on the individual and or depend on their own interest.”
Jokiranta says the solution is engagement: “A learning organization can only be achieved through renewal and engagement. This is largely a matter of leadership. If the organization is only seen as a machine and people as cogs in the wheel, we’re really far away from the idea of a learning organization – the role of the manager is reduced to minding their own business, thinking inside the box and mitigating uncertainty with control and assessment. By contrast, a learning organization emerges from fearless thinking and trusting the innate accountability of people, which removes the need for continuous control. If the management can’t rely on the accountability and competence of the employees, talking about a learning organization is nothing more than hot air. 
 A new type of management can be introduced by seeing competence as a strategically important area of development, by applying the principles of the Agile cycle to the practical testing of ideas and by engaging the staff in experimental development projects. “This requires a change of mindset. Lean is something we’re all familiar with but fail fast is more difficult. Yet, failure can’t be avoided if the corporate culture is built on experimentation. It’s an important thing to acknowledge and accept,” Jokiranta says.
Lehto continues: “Experimental culture stresses the importance of learning from one’s mistakes, although success stories shouldn’t be forgotten either. Looking back provides an opportunity to learn from failure and try again. The company’s internal communication is also put to the test in how the learning points of different teams and departments are collected and shared.”

From careful planning to experimental culture

Utilizing data or providing business case examples to raise awareness of the available options are good ways to gain a broader perspective. 
“You need to step outside your bubble to look for inspiration. Events such as the startup event Slush and Nordic Business Forum are popular in Finland and offer great opportunities for getting new ideas,” Jokiranta muses. “The attitude and curiosity of a person play a major role as well, since in the end everything boils down to the individual. Corporate culture will change once there are enough people who think differently about things. However, the change needs to be facilitated by offering people a corporate culture that they find attractive and by giving them reasons to seek out a particular organization. Companies need to give some honest thought to how they attract, for example, the smartest, development-oriented and resilient employees.
Jokiranta thinks that everyday activities should contain an aspect of learning and that development should occur through practical experiences: first you do something and then you carry out a retrospective and reflect on what you have learned. After that, you keep on experimenting and gradually develop increasingly clever ways of doing things. 
“I would argue that in Finland planning is a bit overrated. Creating novel value requires not so much planning, but ambition, followed by practical experiments to reach the goal – no more carefully detailed plans that are outdated to begin with. Navigating through insecurity is challenging but necessary,” Jokiranta summarizes.

Getting the big picture

The industrial operating environment often features subcontractors in addition to regular staff, making it difficult to form an overall picture of the company’s competences. The company may not be able see which competences are missing or even needed. More often than not, the only people who possess relevant information about the situation are consultants, which presents a problem: the gained knowledge is lost as the consultants change.
The overall picture can be formed by providing opportunities for collaborative development. These can be built on Agile methods and retrospectives and involve activities such as getting together regularly to reflect on the company’s situation, organizing workshops and systematically collecting data. To maintain and understand the overall picture, data should be gathered and stored in a systematic way, for example, on digital platforms.

What does future competence entail?

“Future competences include generic skills which are vital to any organization. Think digital skills: the ability to work flexibly and use digital tools. In addition, critical and analytical thinking will gain in importance as collecting data and filtering the essential points from data flows become staple requirements at the workplace. Being able to reflect on and assess your own work and interaction skills is also crucial and shouldn’t be ignored – the more responsibility you assume the better you need to be at assessing yourself. One of the most important competences is resilience – knowing how to take care of your own wellbeing and staying flexible and able to cooperate in ever changing and challenging circumstances,” Jokiranta says.
“In addition, teamwork, communication and self-management need to be mentioned as well,” Lehto points out. “Work isn’t mechanical anymore but requires thinking. All team members need to be heard if you want to get the best results. Everyone needs to be able to cooperate, give and receive feedback and have the desire to develop.”

Who’s responsible for development?

The experts themselves should be able to influence the development of their capabilities.
“HR or management can’t keep track of all the development needs. For example, HR can’t be responsible for deciding which new technologies need to have a stronger focus in the future. The responsibility for decision-making needs to trickle down to the experts and the professionals,” Lehto says and continues: “The work community should support the employees’ interests and active development. The organization, on the other hand, should ensure that the experts and staff have a say in matters that concern them. It should concentrate on creating team spirit and belief in the employees’ own abilities as well as on providing experiences of success.”
“The organization of the future will offer ample learning opportunities. It’s important that they have a common goal, shared by both the individual and the company. There are plenty of learning methods to choose from, including courses, online studies, books, etc. Every person needs to find out what their learning style is so that they can then apply the learning methods that work for them. The organization should offer help and support in the process,” Lehto concludes.

How to provide outsider support for acquiring capabilities

Vincit and Bonsky help industrial actors build new business and create new capabilities, in addition to which they offer support in applying Agile methods. The development of digital business and capabilities is at the heart of the companies’ operations. Vincit has also developed a leadership-as-a-service philosophy as well as a digital tool, which engages the entire organization in active development (www.laas.fi).
Take these things into consideration if you want to promote capabilities and competence in your organization:
1. Use methods such as scenario planning to chart the kinds of skills your organization will need in the future.
2. Understand the market and the industry. Nothing is born out of thin air or in a closed system.
3. Bring people to together and engage your employees to inspire them to find and develop something new. 4. Hire people who think in new ways, who are motivated and active. 5. Provide tools for learning: make sure the tools are in good shape.
Vincit and Bonsky have joined forces to help industrial companies face the future with confidence and gusto. Vincit focuses on the transformation of business and digitalization and seeks to control changes through strategic choices, new business models and thought leaderships. Bonsky Digital develops digital business and architecture with Agile design methods that engage the customers.
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