Over the first four parts of this series on skills-based organizations, I’ve made the case for why companies can’t afford to take a hands-off approach to learning and growth. Organizations can accelerate their growth by identifying the skills they need to succeed and helping their employees to advance in those domains.

But it’s not enough just to know what skills your organization needs. Skills-based organizations need to be able to measure their progress: without metrics and KPIs, an organization will still be progressing aimlessly. Most managers lack the knowledge and experience needed to help their talent develop — the right set of skills KPIs helps those managers understand how to track skills and hold their teams accountable.

In the final article of this series, I’ll provide a framework for key performance indicators (KPIs) — a set of tools that any organization can use to make sure they’re accurately tracking progress and making the right interventions to keep employees on track.

Let’s dive in.

Answering the right questions

While KPIs themselves can be highly tailored and nuanced, the process of establishing those KPIs is straightforward. Business leaders should organize these KPIs around three simple questions:

• Where do we stand today?
• How fast are we moving?
• What do we need to do next?

Good KPIs can be understood by anyone in the organization. In some cases, we have seen a company’s executives ask for monthly updates on domain maturities and learning velocity — they understand that improving those numbers will play a huge role in helping the business reach its goals.

Where do we stand today — Domain maturities

For an organization to begin improving its skills, it needs to know its starting point. Domain maturities — a team’s current measured level in a given skill — provide an objective metric for each starting point, while also helping the organization to understand its strengths and weaknesses. Progress takes place at the team level, because an SBO can only begin to reap the rewards of a highly skilled workforce once the majority of their employees have become accomplished in their most important domains. Roadmap to success

Progress doesn’t take place in a vacuum.

The more information an organization has about its employees and their abilities, the more it will be able to make precise decisions around both employee development and overall business goals. The five levels of skills transformation provide a clear roadmap for organizational success. By following your workforce through these stages of development, and by applying different mentorship and development tactics at the right moment, you can more quickly and efficiently achieve the end goal — a successful, mature skills-based organization.

In the final article of this series, we’ll zoom in on skills at a much more precise, granular level. Skills KPIs provide employees with clear expectations on how to advance and grow — we’ll look at what defines a successful KPI and place them in the context of a larger skills-based organization.

How fast are we moving — Learning velocity

Every organization has its own unique starting point and circumstances. Where you start from matters less than how quickly you can move forward. Learning velocity is a crucial KPI that measures how quickly your team develops skills. Increasing your team’s learning velocity will be beneficial for every skill they work on going forward. 

How do we determine progress and performance on an individual level? After conducting an initial assessment to establish baselines, individuals must periodically conduct re-assessments to determine how far they’ve come. Re-assessment will indicate how many points (on the previously mentioned 300-point scale) the learner progressed in each domain.

Learning velocity is also a useful KPI when it comes to incentivizing employees. Many of our most successful customers establish simple leaderboards that highlight the employees with the fastest learning velocity — that simple recognition is enough to motivate the entire team to improve their speed. 

Workera’s score points indicate progress on a raw scale. When we put those score points into the context of how many days have passed since the first assessment, we can then calculate learning velocity. For example, if a user’s score improves by 50 points after having spent 14 days learning, their learning velocity is 25 points per week for that domain. 

We can put learning velocity into context by comparing to these three broad levels:

• Level 1 - Behind: The user’s score improves by less than five points per week.
• Level 2 - Standard: The user’s score improves by five to nine points per week.
• Level 3 - Best in Class: The user’s score improves by 10 points per week or more.

We can also assess learning velocity at the team level by averaging progress for each employee in each domain. This broad KPI can help leaders understand whether their team is moving faster or slower than should be expected, which can then prompt necessary changes to incentives and other interventions. An individual employee’s learning velocity may be low because they aren’t spending enough time learning, or they may not be using their time effectively due to distractions or low-quality content.

What do we do next — Strengths and gaps

A team or business beginning its transformation into a skills-based organization (SBO) needs to know the current skill levels of its employees. But this information requires context to be useful. How do you know where your team is falling behind and where it may be ahead of the curve?

Strengths and gaps are a valuable KPI because they show where your team should focus its attention and effort. This process puts the team’s skill levels into context using a set of benchmarks. How does your team’s average skill level in a certain domain compare to other enterprises; to other enterprises within your industry; and to big tech companies in general? 

An analysis of the organization’s strengths and gaps lays out the current situation with little room for interpretation or misunderstanding. If you’re outperforming benchmarks in two domains but falling behind in two others, then you know where to focus your energy.

Organizations should also assess the gaps between current employee abilities and the required proficiency levels for a given role or project. In many domains, particularly emerging skills and technologies, the industry as a whole will have a gap between current ability levels and the necessary targets. Your employees may outperform the benchmark when it comes to a given domain but still lack the expertise and confidence needed to complete a given project. After identifying these gaps, the organization can begin to measure how long it takes to close them — another form of learning velocity.

Other KPIs — Engagement and progress

For business leaders, L&D represents a significant investment of both time and resources. Tracking engagement and progress in learning helps leaders to understand their utilization and return on investment.

This KPI takes the form of a “progress funnel,” reflecting how many users invited to a certain skill set will assess, then learn, and then certify their results. This funnel provides leaders with a measure of license utilization as well as an indicator of where bottlenecks may be hindering progress. These bottlenecks can be simple: it could be that some users didn’t see or respond to the initial invite. Others may be more complicated: users may get stuck in a specific domain while learning and find themselves unable to reach the desired proficiency.

Users who reach their target proficiency in a set of domains are marked as “certified.” Employees can progress and certify for core skills in their roles and projects, or they can also certify in optional skills reflecting a greater degree of specialization.

The world is evolving quickly, particularly as artificial intelligence reshapes the ways in which we work and communicate. The organizations that thrive in this fast-paced environment will be those that move on from outdated approaches to team structures and learning, focusing instead on skills as the driver for development and progress. These high-achieving teams or businesses become continuous learning organizations, rapidly growing and evolving to succeed in a skills-based future. Whether your organization is currently ahead of the curve or lagging behind in terms of skills and knowledge is less important than how fast your organization can learn. The future belongs to skills-based organizations.