As the COVID-19 crisis has reshaped how work is done, the demands of a rapidly changing world have grown and accelerated. Organizations can gain a competitive advantage by ensuring that both leaders and employees not only acquire new skills and knowledge but also develop the new behavior and mindsets companies need now more than ever. During a McKinsey Live webinar, partners Stacey Dietsch and Elizabeth McNally shared recent McKinsey research and insights about how the development of effective teams and leaders in the future requires organizations to build employees’ capabilities in the present.
The importance of capability building
Capability building is the development of abilities, mindsets, and skills that can be applied repeatedly and in many contexts. In response to a recent McKinsey survey of 1,240 business leaders worldwide, 80 percent, up from 59 percent before the pandemic, said that capability building is extremely or very important to the long-term growth of their companies. In addition, 75 percent reported that their organizations have either maintained or boosted their investment in capability building since the pandemic began. The respondents also said that building the skills of existing employees is the most effective way to do it—far better than hiring externally, redeploying employees, or hiring contract workers.
Easier said than done
Organizations often struggle to develop the right skills at scale, however, as evidenced by the 67 percent of the surveyed leaders who say capability-building programs often don’t succeed at achieving desired objectives and business impact.
Unlocking business value requires employees to have functional skills, such as digital and analytics capabilities, as well as foundational and cross-cutting capabilities—particularly leadership and the ability to inspire others, as well as resilience and adaptability, according to the survey respondents. They also cited a need for employees to develop business-model innovation and agile ways of working.
How to build the capabilities needed now
Laying the foundation of a capability-building program requires leaders to consider the company’s strategic goals, determine the capabilities needed to attain them, and then to identify the capability gaps. To fill those gaps, an effective program uses a blend of techniques and modalities that enable employees to acquire the requisite skills and knowledge and apply them to real work. Then the program ensures that that application is reinforced and sustained for the long run.
To have such impact, organizations must build a culture where learning is considered to be essential (integral to the company’s culture, processes, and strategy and linked to its business priorities), meaningful (tied to an individual’s personal growth and career progression), and accessible (embedded in the regular workflow).
The pandemic has forced companies to shift from in-person to online learning and rethink approaches to course design and learner engagement. Citing research and their personal experiences, Dietsch and McNally said that it is possible for participants to build skills as effectively through virtual learning as in-person events. High-quality remote capability building even has some advantages over in-person approaches: it enables faculty to engage senior executives much more easily, it is scalable, and learners find it more flexible and convenient. As a result, after COVID-19 has passed, companies are unlikely to return to as much in-person training as they had before.
Questions and answers from the webinar
- You said that virtual learning can be as effective as in-person learning. What are some tips for designing virtual learning with impact? How do you design these programs in a way that keeps people feeling connected?
- Opt for interactivity over content. When training sessions fail, the typical autopsy report points to “death by PowerPoint.” More than ever, the quality of facilitation and the breadth of discussion, rather than any particular information on a slide, make or break a remote-learning experience. For example, one full-day, in-person workshop reduced the number of slides it used from 80 to 20, and participants spent most of the time in small groups exploring thought starters and creating insights together. The engagement and debate elevated the experience. In today’s remote-learning environment, consider how shorter sessions can be held over multiple days.
- Lean into the technology. Instead of apologizing for using remote learning, companies should embrace it and generate excitement by requiring everyone to participate and making extensive use of smaller breakout sessions. Effective virtual programs can quickly break down silos it took years to build and continue enhancing communication and connections long after the workshop ends.
- Make leadership visible. Because the logistics of in-person workshops are cumbersome, leadership participation in them was rare. This approach won’t pass muster with newly lean and remote workforces that are tired, anxious, and yearning for leadership. Virtual workshops, however, can more effectively bridge the gap between the leaders and employees. Because no travel was required, one company was able to have the CEO and other senior leaders speak directly with employees and even participate in a program. Said one of the employees, “I have talked with my boss’s boss more today than in the past two years combined.”
- How do you ensure that capability building leads to changes in behavior? How can you measure the behavioral change?
Focus on behavioral change, not completion statistics. Completing a digital skill-building program means nothing if it doesn’t result in employees doing things differently. In one example at a leading company, even when 95 percent of employees had completed the “Having effective meetings” module, the module wasn’t considered completed unless managers saw improvements in meetings. Team leads used standardized checklists for weekly scoring of their teams’ behavior against expectations, and discussions of specific strengths and development areas became part of weekly meetings.
- What's the role of teams in capability building?
Teams are one of the main vehicles for delivering performance and innovation outcomes in business. As more teams have become virtual and team structures have shifted to networks of teams collaborating across functions, agile ways of working provide opportunities for teams to learn from experimentation. Three activities can help inspire team learning across the organization:
- Set team learning goals that align with desired outcomes. A team’s outcome and performance measures drive its learning. A shift in collective team knowledge requires establishing a formal team learning plan. Team members should help each other, making time for learning and sharing knowledge for the benefit of the team’s goals.
- Look out for triggers that offer team learning opportunities. Team governance should include the identification of triggers for new learning opportunities—triggers such as a new strategy or project, a change in team construct, or a crisis situation.
- Create the right environment for team learning. Learning as a team requires an environment that fosters learning. While learning is a skill, team learning is a discipline. The most important aspect of a healthy team environment is psychological safety—a team climate of “interpersonal trust and mutual respect in which people are comfortable being themselves,” according to Harvard Business School Professor Amy Edmondson.
- Stacey Dietsch mentioned using her previous commute time to learning while working out. What are some of her favorite leadership podcasts?
- Work Life with Adam Grant
- The Happiness Lab with Laurie Santos
- Hidden Brain
- Masters of Scale
- Innovation Uncovered
- How I Built This
- A Bit of Optimism with Simon Sinek
- The Tim Ferriss Show
For more on this topic, please watch the webinar recording and read the articles “Rethink capabilities to emerge stronger from COVID-19,” “Closing the capability gap in the time of COVID-19,” and “Are you a ‘team of learners,’ or do you learn as a team? And why it matters,”