Hard to Soft Skills: How to work with transition in rapidly transforming organisations

As technology and changing demographics shift the skill landscape, managers must develop a balance of social skills and an adaptable locus of control, moving from self-reliance to team empowerment

By Manoshij Banerjee and Mohammed Shahid Abdulla

Published: Nov 13, 2024 12:15:07 PM IST

Updated: Nov 13, 2024 12:38:49 PM IST

Firms now demand social skills--the capacity to interact, persuade and more generally relate to others—30 percent more compared to traditional operational and administrative capabilities. Image: Shutterstock

"What skills do I need to demonstrate to show that I'm ready for the next step ?" is one of the more important questions confronting a formal-economy worker periodically. The October 2023 issue of The Economist carried an op-ed titled Pity the modern manager - burnt-out, distracted and overloaded arguing the evolution of a new organisational landscape "rewards some skills more and some less than in the past". For their workplace, organisations favour soft skills like empathy, resilience, compassion, and adaptability that "get disparate people and goals to coalesce smoothly" compared to intellectual or technical skills. Soft, social, or people skills become increasingly important as a worker is chosen to be a supervisor first and a manager next. In 2022, Raffaella Sadun of the Harvard Business School and others mined seven thousand job descriptions to document skills requirements in top managerial roles across thousands of firms. They found that firms now demand social skills--the capacity to interact, persuade and more generally relate to others—30 percent more compared to traditional operational and administrative capabilities. In fact, the study shows how from 2000-2017, management of material and financial resources steadily declined by 40 percent, becoming the least essential skill represented in these job descriptions. Around 2008-2009, social skills surpassed even information skills—the skill surrounding processing information and analytics--as more desirable. This gap has continued to widen for various reasons, most notably three.

The accelerated demand of hard-to-soft-skill transition

First, the march of technology, digitalisation and global trade renders several hard skills redundant. By 2030, Sam Altman says, the AI revolution will ensure that "the cost of intelligence is going to be on a path towards near-zero." Recently launched by DeepMind, AlphaGeometry uses a symbolic engine combined with a language model to exhibit logical reasoning and solve mathematical problems.

Researchers think that the ongoing progress of such programmes geared towards the end result of achieving sophisticated, human-like problem-solving in machines is increasing the premia for soft skills. Second, the workforce's demographic has been shifting considerably worldwide. McKinsey's Women in the Workplace Report 2023 finds that the number of women in manager to C-suite roles in America and Canada has climbed by 12.32 percent over the past five years. The share of non-whites in managerial roles in America has increased by 4 percent from 2013-2022. According to recent Gallup surveys, 84 percent of organisations are increasing their investment in diversity, equity, inclusion, and belonging. Also, Gen Z (analysed to be radically different from millennials in work attributes) will constitute 27 percent of the workforce by 2025. These changes will make workplace empathy, i.e., the ability to put oneself in the shoes of team members and allied soft skills, even more difficult and non-intuitive to inculcate and assess. Third, COVID-19 has normalised remote and hybrid work arrangements, challenging managers to engage with precision in activities that rely on teamwork and social interactions. While conflicting perspectives on WFH exist, the tension around it is rising among managers as teams become more siloed and the opportunities to build social capital at the workplace shrink dramatically.

Catching up with the accelerated demand of a hard-to-soft skill transition, especially in light of the above reasons, is seen to impose a heavy cognitive cost on managers and executives--explaining in part the worrying burnout numbers they reported globally. On the other hand, companies are promoting younger workers to middle and senior management roles at a fast clip to meet expansion needs and retain talent. For example, the age of a new partner in the Big-4 consultancy firms has fallen to 33-35 from 38-40 in the past five years. The difficulty in navigating the hard-to-soft skill paradigm without the advantage of longish organisational experience will thus intensify. Data from 50,000 participants across 600 companies in 118 countries on the EZRA coaching platform show that employees and employers often have opposite preferences for even skills perceived as 'soft'. While a manager might want to learn more about strategy, the firms' promoters would like her to develop more, say, trust-building or collaboration skills. In 2018, LinkedIn's skill shortages study used data from 146 million user profiles, 20,000 recruiting companies, and 3 million job postings to find the greatest imbalance in interpersonal skills--particularly communication.

The hard-to-soft skill transition as a locus of control game

One may wonder how difficult re-orienting one's skills might be in the face of the market's professional ask. The answer is very, if not quite, and looking at it behaviorally may reveal why. This answer is especially relevant to an economy once we recognise reskilling and upskilling as imperative for business, trade, and export success. We contend that the hard-to-soft skill adaptation from employee to supervisor to manager is a cognitive rope walk balancing what psychologists call locus of control. Locus of control (LOC), a concept in psychology that has been around since 1966, is defined as the degree to which an individual feels a sense of agency regarding their life. An internal or external locus of control decides whether a person believes that internal (one's abilities and actions) or external (luck, environmental factors, or actions of powerful others) factors are responsible for the outcomes and events in her life. Management researchers have often studied LOC to determine various workplace constructs like stress and job satisfaction, firm citizenship and belonging, and employee learning. One's LOC may vary with the context, like health, career, education, and home. It is quite possible that one simultaneously has an internal health LOC (My health depends on my food choices, exercise level, and lifestyle) and an external career LOC (My working hard doesn't matter all that much; my company bonus depends on market conditions). While LOCs may be significantly motivated by priors like upbringing and culture, researchers agree that they are not fixed or innate like personality traits, and changes can be reinforced by setting up incentive systems in the firm and, possibly, in the wider sector, economy or society.

An HBR article from 2022 says, "While technical skills may help us achieve our first promotions, they won't help us as much three or four years down the line." Technical skills favour an internal locus of control. Analysing data with Python or writing good copy is almost entirely subject to a young professional's understanding and practice of coding or writing--her interpersonal skills matter little, if at all. Her exposure to the business' client or customer is negligible at this point, and coffee machine or town hall interactions are largely filled with pleasantries. The tact of communicating with (especially senior) colleagues or a potential donor, or the art of mobilising bosses and colleagues towards even a small goal--are yet to seem crucial. We could call this stage one. Even at this stage, employees drawn from universities with either teamwork-based curricula or balanced political activity are often in prime positions for the next phase.

In contrast to the first phase, social or soft skills favour an external locus of control, not to say the employee is resigned to an outcome that she cannot control. She must be willing to give up considerable control and seek rather to empower and enable her team. Her organisational success now depends, and she must believe that it largely depends on factors outside her or her reach, i.e., on 'others' in the firm. A shift of LOC from internal to external is inevitable when accepting and working with this realisation. A high prior internal locus-of-control manifests itself in an external LOC world birth, such as through practices such as micromanagement. Research from Norway found that managers with higher external LOC used participative decision-making more frequently than low externals. This phase becomes a series of trial-and-error exercises that teach the manager important lessons on how autonomy in the organisation is shaped culturally and what tack works. This is stage two.

As one becomes the lead of a vertical, responsible for multiple teams and projects, a fine balance between holding and loosening the reins becomes necessary. This means effortlessly calibrating their LOC on the internal-external scale to meet the relative needs of an inclusive or commanding approach to the deliverables. This balance hones and extends itself as time goes by: armed with both hard and soft expertise, the ambidextrous manager can mix data analytics, evidence-based decision-making, and cross-functional communication to produce operational effectiveness. Cultivating such LOC-ambidexterity is important to cultivating efficient teams and fostering a management talent pipeline. In a 2015 study, internal subordinates were found to criticise external managers for their technical skills, while external subordinates criticised their internal managers' people skills. An organisation's training will make managers aware of the 'no-authority gauntlet'—wherein accountability is sought from a team member sans commensurate authority. Such training will sensitise managers to the 'curse of knowledge', i.e. to incorrectly assume that team members know and understand as much as the lead about where the upper management's priorities are. A decade of research over 12,000 firms, published by HBR in 2017, found that a competent leader who can set realistic targets, run efficient operations, and groom talent all at once—is hard to imitate and contributes significantly to profitability, growth and productivity over an extended period. Therefore, stage three is a firm's choice and training of managers who can calibrate their LOC.

Afterword

Herbinia Ibarra of the London School of Business and others studied 75 CEO successions involving 235 candidates to define three stages, namely departure, voyage, and return—broadly consonant with the LOC stages we mention--that leadership transformation takes to shift from a hands-on, directive style to people skills. Hard and social soft skills are often considered quantifiable and otherwise, respectively--and therefore dismissed as irreconcilable. All organisations have to do is look at these skill sets with the common denominator of LOC.

HR functions and senior managers, in particular, are pivotal to and responsible for cultivating the next crop of managerial talent in their organisation. Senior managers can foster an atmosphere enabling skill transitions by assigning responsibilities and creating opportunities for their team to incentivise a change in LOC. HR functions, on the other hand, can design assessments, training, and workshops to increase employee awareness of LOC and its relation to decision-making and performance, all to reinforce desirable LOC changes. For example, the latter can be done using case simulations and virtual reality-based training. Think of gamified tailor-made immersive experiences like having a difficult project-related negotiation with an avatar (in the disguise of a client) against encashable tokens or perks. This can enormously help bring about gradual LOC changes in a firm and monitor them more accurately to keep a pipeline of managerial talent alive.

By Manoshij Banerjee, an independent consultant on digital culture, Mohammed Shahid Abdulla, faculty member in Information Systems, IIM Kozhikode