Here's why the skills gap may be killing your digital transformation

Most companies approach IT hiring like trying to build a house without a blueprint, says David Foote, co-founder and chief analyst at the research and analysis firm Foote Partners. In part one of a three-part interview, Foote explains what most IT leaders get wrong about hiring, how it's holding their organizations back, and how to get it right.

The Enterprisers Project (TEP): Nearly every large organization these days is talking about the need for digital transformation. Yet a recent study shows that the vast majority don't have the skills they need to do the job. Why is there such a huge disconnect between what companies want to do and having the skills they need to do it?

David Foote: Digital transformation has become a competitive necessity. The fact is Amazon or another competitor is pushing you in that direction – every industry has technology and solutions pushing them forward. All companies are good at looking at the competition and saying, "We have to get into this – we have to acquire, merge with, or build it."

TEP: So then what goes wrong?

Foote: A lot of companies are still defining what the skills are that they need. How do you cope with the skills gap, and what are the pitfalls of getting into something with insufficient skills? Employers have done a very poor job of fielding people to begin with. They're not thinking two or three years ahead. They tend to plan projects and once something is locked in, they look around and ask, "Do I have the skills to do this? No, I don't."

So they say, "We'll just hire consultants." But they can't find the skills they need even in the consultant community. And if you find them, you're not going to keep them – they're going to go the highest bidder. 

The interesting thing about human capital is that companies have never managed people like they architect systems. They come up with a plan that says you have to build this technology in nine months without having people to do it. That's like building a house with no blueprint. 

TEP: So what should they do instead?

Foote: A lot of employers are now changing their approach. They were damaged when they weren't able to execute on a strategy or plan given to them by the business because they didn't have the skills in house and they went to the consultant community and couldn't get them there either. They're now realizing they have to put this human capital part up front. It has to be the first thing we're talking about – we have to make sure we have the people. So much of what we're doing now is very new technology, areas where there's not a lot of expertise. But there are still many models where it's been done successfully. And when they asked how did XYZ company pull it off, the answer is that they used architecture principles all the way through, including the management of people. You don't start on these projects unless you have the people or you know exactly when they're going to arrive just in time to do the job.

TEP: How can you know they're going to arrive just in time?

Foote: You have to identify candidates internally who can grow into these jobs and then sit down with them and say, "This is where we want you to go with this company," and talk to them about it. If they say yes, you're going to provide them with a whole training program.

TEP: But how do you identify the right candidates for this in the first place?

Foote: In large companies, it's easy to look through the talent pool and define the core skills we need in a cybersecurity engineer, a cloud engineer, or a data scientist. You can look at career tracks for individuals looking into things like data science, or any of the cloud jobs, digital jobs, analyst jobs, or product design jobs. That information exists out there. Any IT leader who says they have no idea how to identify people isn't really thinking.

It used to be that you started out as a programmer, then an analyst, then a software engineer, then a senior or lead engineer. After the Internet became popular, it became more important for people in technology to have business experience. They had to go deeper into some business domain, specializing in logistics or accounting or sales.

But now, one reason it's so difficult to hire is that people are so specialized. Technology people are seeing that if they don't become too specialized, it helps them. And employment markets prize these Swiss army knives – people who can operate in open systems, in several languages. They're like utility players in baseball who can play second base, first base, outfield, and maybe pitch.

Small companies usually already have people doing several jobs at one time. They're used to cross-skilling, and used to the idea that a systems administrator might also do security. Most larger companies also have a selection of people they can go to, and there are people in the organization who are already multidimensional. They're the ones who can most adapt to taking on another skill.