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Marius Vennemann
Managing Director
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Imagine you want to build a house. You have the best materials and the latest tools, but without a clear blueprint and defined responsibilities, it's all theory. A skills-based governance approach in companies works in the same way: clear processes and responsibilities are needed to manage skills effectively and ensure agility. But how can this be implemented successfully?
The precise management of skills is the foundation of an agile, high-performance organization. Skill Governance creates the structure to react to changes and master new challenges. This blog provides an overview of the key elements of a successful skills governance approach.
Skill Governance is more than just a buzzword. It describes the structured process of planning, implementing and monitoring measures for managing skills and use cases in an organization. A well thought-out approach is essential to ensure that data quality is guaranteed and skills can be measured objectively. This is the only way to effectively manage HR processes and maintain a high level of agility within the company.
But why is this important?
What problem does a company have that is not concerned with governance? A coherent Skills Governance framework defines the roles, responsibilities, communication, process steps and training in skills management.
If roles and responsibilities are not defined in the organization to take care of the ongoing curation and quality assurance of skills, or to provide expert input, the data situation quickly becomes obsolete or compromised by incorrect data. This jeopardizes the success of use cases that are based on skills. For example, the quality of learning recommendations based on skill gaps would suffer if the relevant skills are no longer maintained over time and become outdated.
If no dedicated, continuous and recurring reporting on skills and their use cases is established, decision-makers are not informed about the status of the skills landscape in the company, which makes any further expansion to other business areas or use cases more difficult. If I do not establish informative communication loops across different interfaces, skill managers lack input from colleagues or experts from the business areas.
If no uniform standards are introduced for the description and formulation of skills, not all skills may be formulated or described in an understandable way, increasing the risk that they will be used incorrectly. If there is no regular training, new governance units cannot be onboarded to the same degree or it cannot be guaranteed that existing governance units can competently deal with process updates in skills management.
A well-structured Skill Governance therefore creates the basis for successfully designing use cases, educating decision-makers and involving the organization at key interfaces in the processes that ensure a consistent and clean data situation in the skill taxonomy.
But what does an effective approach look like in practice? First of all, there are two basic models for implementing Skill Governance: the centralized and the decentralized model. Both approaches have their advantages and disadvantages - and the best solution often lies in a combination of both models.
A centralized model relies on a central Skills Governance team that takes responsibility for ensuring the quality and consistency of skills and also manages the overarching processes. This model is suitable for ensuring uniformity and consistency throughout the entire organization. It ensures that skills are defined and managed uniformly and that skill descriptions conform to a certain format. However, acceptance increases considerably if employees can also suggest skills themselves (bottom-up approach). This promotes motivation and commitment and ensures that skill governance remains dynamic and relevant.
In the decentralized model, experts from the individual departments assume full responsibility for specific skill domains. This structure offers flexibility and enables skills to be better adapted to the specific requirements of the business units. This leads to a higher relevance of the skills for the respective areas of responsibility.
The best model is a combination of both approaches. A hybrid approach combines the strengths of both models: the central governance unit assumes responsibility for the quality assurance of skills data, carries out regular reports and ensures that all employees adhere to uniform standards through targeted training. This ensures the consistency of processes and creates the basis for effective implementation. For example, the main task of the central unit is to analyze the status of the taxonomy in order to ensure quality standards and communicate any need for action to decentralized units in the business units, which in turn curate and maintain skills. At the same time, the decentralized unit provides valuable input and specific expertise from the specialist areas. The specialist departments are responsible for the maintenance and quality assurance of the skills in their respective domains, which enables precise adaptation to the specific requirements of the individual areas. For example, relevant task packages are coordinated between the central and decentralized units. This hybrid collaboration ensures flexible and consistent Skill Governance that covers all areas of the organization and responds to the respective needs.
A clear allocation of roles is crucial in order to make the process effective.
The central governance unit is responsible for the overall structure and quality assurance. It defines guidelines for the curation of skills, sets up a comprehensive reporting system and continuously optimizes the underlying processes.
The decentralized governance unit is responsible for the maintenance and quality assurance of skills at a local level, for example in individual departments. It ensures that the skills database is updated in its subject areas and regularly consults with technical experts.
An effective method for clarifying responsibilities and process steps is the use of a RACI matrix. This method helps to clearly define and assign roles and process steps. A RACI matrix is a project management tool that is used to clearly define and assign roles and responsibilities. The acronym RACI stands for:
In order to successfully integrate Skill Governance into an organization, there are some best practices that ensure structured and effective implementation.
Clearly outlining process steps and assigning responsibilities
A central aspect is the clear assignment of responsibilities for the process steps that are important for well-functioning skills management (e.g. curation of skills according to an appropriate format, regular quality checks, regular reporting). This is where the aforementioned RACI matrix (Responsible, Accountable, Consulted, Informed) comes into play. This model helps to precisely define roles and process steps (see example below). Stakeholder mapping helps to initially identify people or groups of people who are eligible for the RACI matrix.
Continuous training and support
Another important element is the continuous training and support of employees. This is necessary to ensure that everyone involved understands the requirements of the central governance unit and is able to implement them in practice.
Technological support
Technological support is also a decisive factor. In a pilot project, a governance structure can be set up initially using Excel data.
In addition, technological support is a decisive factor. In a pilot project, a governance structure can be set up using Excel data. However, when scaling up, the use of platforms for efficient maintenance and management of the skills database is essential. Modern technologies, especially artificial intelligence, can provide valuable support by reducing manual effort through automation and increasing precision and consistency in skills management. In addition, numerous tools provide valuable analytics functions that deliver statistics worth knowing about (newly) curated skills, which are important for informative reporting.
Early involvement of stakeholders
Another best practice is the early involvement of stakeholders, especially functional managers and employees. This is important to ensure that the defined skills are relevant and applicable. Regular feedback from employees also plays a decisive role here in order to continuously review the effectiveness of the defined skills and adjust them if necessary.
Example: Introduction of a skills governance framework for a medium-sized IT consulting company
What could the introduction of skills governance look like in practice?
Let's look at the fictitious company IT-Solutions, which offers IT consulting for cloud solutions. Here are the general details of the company:
Why does IT Solutions need a skills governance framework? Susanne K. has already set up a skills database and skills profiles in the Sales & Marketing and Management & Administration divisions so that staff can receive further development recommendations on the learning platform based on skills profiles and skills gaps. In addition, a talent marketplace is to be set up in the future to make transparent which internal positions and projects have specific skill requirements and which people could be a good fit based on their skill profile. This makes sense, as there is a high level of fluctuation in the PMO & Consulting division in particular and staff often have to temporarily help out in parallel projects. Susanne K. now wants to introduce a Skills Governance framework before scaling the processes throughout the organization to ensure the quality of the initiatives.
To this end, she holds three workshops to define the responsibilities, processes and scaling steps with relevant stakeholders. An integral part of the workshop series is a RACI matrix that defines the relevant process steps and responsibilities in order to assign the respective personnel.
In a first workshop, the relevant tasks and process steps are first defined in a brainstorming session and which personnel could be considered for them (e.g. through stakeholder mapping). In a second workshop, you define who has which responsibilities and roles. In a third workshop, you define the timeline for the further rollout and when which areas of responsibility will become relevant.
We have defined a corresponding RACI matrix as an example:
In the matrix, the relevant process steps are defined in the left-hand column and the relevant people/groups of people in the top column.
The task areas in the left-hand column of the matrix comprise key steps in the skills management process:
For example, the respective HR officer from the departments is responsible for continuous skill curation in the specialist departments. They work in tandem with domain experts (the decentralized governance unit), who are responsible for providing technical input on the skills and descriptions. Every month, the HR officers carry out a quality assessment, check that skills are up to date and inform the skills manager Susanne K. (the central governance unit) of any significant updates. Susanne K., in turn, is responsible for the connection to use cases and for dedicated reporting that informs the company about the status of the skills landscape on a quarterly basis.
The responsibilities and initiatives can now be rolled out successively in a dedicated project plan.
Effective Skill Governance begins with a thorough analysis of the existing system and a clear definition of responsibilities. The hybrid approach, which combines centralized control and decentralized expertise, often proves to be the best solution. This combination ensures that both consistency and flexibility are guaranteed and that the skills in the company are always up-to-date, relevant and uniformly managed.
Checklist for setting up a successful Skills Governance model:
edyoucated is funded by leading research institutions such as the Federal Ministry of Education and Research (BMBF), the Federal Institute for Vocational Education and Training (BIBB), Federal Ministry for Economic Affairs and Climate Action (BMWK).
