Introduction

Despite recognising the importance of skills to the health of the nations’ economy, and the frequent exhortations to all organisations to invest in and develop people as their key asset, far too many organisations remain wedded to management assumptions and techniques developed for managing a workforce rather than a skills force. This has implications for the recruitment and retention of skilled staff and also for their morale and productivity while at work. This in turn has many implications for the resilience of the organisation and its operations and for the ability of the UK to compete in the longer term.

Perhaps of more concern is the failure amongst many managers from supervisory to Board level to recognise the difference between the two employee profiles, and the implications of the need for complex and cognitive skills rather than simple skills or manual labour.

Management Practice

Management science and practice is still primarily a product of the twentieth century, and far too much of it remains essentially rooted in mid century expectations and approaches. Though there has been much talk of management by objectives and the use of performance related rewards, and most organisations pay lip service to them, these are rarely used in practice.

Many of the goals of management were set out in the years after the First World War and progressively refined during cycles of expansion and contraction, war and peace, over the next eighty years. During much of this period most businesses hired bodies to provide physical effort or manual skills rather than minds to provide intellectual skills, and management techniques tended to reflect this. Though more intellectually based vocational skills were needed in many enterprises, and distinctions between the two groups of staff and how they were employed and managed had already developed, mainstream management practices were predominantly tailored for managing physical or repetitive work. As a result they incorporated at their heart assumptions about motivation and reward that reflected this model of the ‘workforce’.

Significant changes to management practice have occurred in the last twenty years, but many of the most basic and enduring management expectations still in widespread use were shaped when the industrial world, and the organisations within it, was very different. Despite generations of business schools, and management gurus, these assumptions and expectations persist across large swathes of UK management. These techniques were mainly developed in national, family owned, labour intensive, companies very different to the trans-national, shareholder owned, skills dependent, companies of the twenty-first century, and on this alone it would be expected that their use will be of doubtful value. Given the nature of the skills needed to day and the psychology of the people likely to provide them there is no reason to assume that they would be effective in modern organisations. Yet they do persist; even in the so called sunrise industries, those totally dependent upon technical skills, the shadow of those past expectations and practices still continues to cast a shadow.

This situation gives rise to two important questions:
1. Why is this the case?
2. Does it really matter?

So why are old techniques still in use?

The answer to this is complex but is, in part, related to a society that is uncomfortable with the notion of intellectual skill and meritocracy for many reasons. The low level of management education in parts of the economy and the tendency to cut training as a knee jerk reaction to budgetary constraints also plays a part in keeping UK management techniques rooted in the past.

However many of the reasons why old practices still persist are more straightforward, in particular:
· managing a skillforce is harder, and requires some very subtle techniques that can be expensive and/or time consuming to master;
· recognising the value of skills is seen to confer power on the skilled in a way that may be inconvenient to the existing hierarchy;
· explicitly recognising the true value of certain types of skills may invalidate the current status quo and so tip an organisation in to a range of change management issues that are not beneficial to existing management structures and those with a vested interest in them;
· UK management is generally less well educated than might be expected, particularly in smaller organisations and is often poorly trained. Therefore managers are more likely to learn from lay texts or other older managers and role models, so perpetuating older assumptions.

However the fact that we are, and will continue to be, depended upon intellectual skills, particularly technical and strategic skills, cannot be avoided. If we are to be successful then managers need to come to terms with the fact that developing, successfully deploying and leveraging skills is the real role of management in the twenty first century.

To do this managers will need to be assessed against their ability to:
· recruit necessary skills in a timely manner;
· deploy skills effectively;
· motivate and retain skilled staff;
· enable the use of skills to maximum organisational benefit;
· develop skills in line with current and future needs.

There a number of factors that have implicatiojns for the degree to which managers can develop and deploy the skills management technqies.

Organisational culture

Organisational culture is always a key factor in how effectively skills are, and can be, managed because it defines how the organisation:
· empowers staff at all levels;
· assesses and develops the competencies of management and staff;
· shapes and reinforces management style.

Highly skilled staff need more autonomy than may be comfortable for traditional cultures if they are to be both motivated and effective, therefore they generally find the barriers presented by more traditional and hierarchical organisation both alienating and de-motivating. Because of this some organisational and management cultures are better than others at attracting, using and retaining skills. Open and/or flatter organisational cultures are more likely to succeed in attracting, and using, high skill staff and supporting managers in the most appropriate staff management practices.

Organisations that wishes to be skills friendly needs to be able to: -
· Allow unfettered flow of relevant information;
· Cope with high levels of transparency and openness;
· Set targets and manage projects in a way that recognises the role of specialist knowledge and influence as well as organisational status;
· Foster mutual respect and value for the individual;
· Reward on the basis of contribution made, rather than simply grade;
· Be willing to encourage and assist in the further development of skills regardless of age, gender, ethnicity or other personal characteristic.

Traditional organisational cultures may disadvantage managers who adopt more innovative strategies for dealing with their skilled staff and may try to enforce strong demarcation between management and the managed. A failure to understand and cope with the differences between subtle but fundamental concepts such as power, influence, status and autonomy can introduce unrealistic expectation about how skilled staff will behave.

Organisational Strategy

Senior management have the job of forming strategy for the organisation but increasingly this strategy will be dependent upon skills and knowledge they themselves do not, and cannot, have. Though external advisors have a valuable role to play in providing scarce or unusual skills or in providing an independent viewpoint far more professional skills will be held in house. Skills that are required continually or routinely are always best sourced from within the organisation in normal circumstances, and therefore it is important is that the input from those skills is made available without distortion can be quickly accessed by executive management. This may require that rather than working through many layers of management the senior management group liase directly with those employees who provide those skills even where they are officially at a much lower level of the organisation.

For middle and junior line managers this presents significant challenges, as it may invalidate a significant part of what they see as their own role and undermine a major source of their authority. It may also require that managers develop new skills, as they will need to be able to manage staff that have regular professional contact with their own managers.

In many older organisational cultures management style is based on the opposite approach, restricting or containing staff access to, and influence with, senior management. In this type of management climate vital skills within the organisation may not be accessed, or used, in an effective manner; which may force an organisation to look outside for skills that it has within itself, an expensive but more comfortable management option.

The role of management

The traditional perception of the role of management is two fold:
· to manage resources, processes and procedures
· to act as a filter and transmitter of information, collating and interpreting information for relay to higher levels of management.

Many managers are poorly equipped for this role where resources are not simply financial or physical; skills scheduling, constraint handling and the management of dispersed resources in often essential in high skill organisations and these are often ignored in management training programmes. The overall effect can be to restrict the effectiveness of the skills being managed.

The persistence of the filter role is particularly dangerous in modern organisations as it can lead some line managers to see their role as protecting senior management from unpalatable or awkward truths, including input from other employees. This may lead to management attitudes that are obstructive and divisive and who exercise authority by reducing the autonomy and initiative of those they manage.

Even in traditional workforces these types of attitudes can lead to conflict and poor management /staff relationships; however mechanisms for dealing with staff as group can to some extent contain the more divisive aspects. In areas where staff are highly skilled, perhaps with the skills being drawn from several domains, it is much harder to tackle it by a collective approach. Skilled staff are far more likely to seek individualistic measures to express their displeasure; therefore, though conventional industrial unrest is less likely, high levels of staff turnover, rocketing recruitment and retention costs and disinterest in the organisations objectives can be produced, and these can be equally destructive. If skilled staff should decide to take collective action, and it is unwise to assume that they cannot or will not, they can be extremely effective both in targeting that action and in obtaining and maintaining third party support.

Management contribution

For more traditional managers the role of managing intellectual skills, particularly scarce skills and those dependent upon creativity or initative, can be seen as a poison chalice. The techniques and approaches they have absorbed, and see as key to being a manager, will still be tried but in general they will fail. The effect of such failures is often produce a situation where the manager involved, or the even the organisation, will try and contain or repress the very attributes of the staff that the organisation most needs.

In the era of sophisticated information and communications infrastructures management roles are probably better focussed on the resource management aspects, particularly in high skills environments. This in turn requires that managers have additional specialist skills in project management including financial management, risk control, facilitation, team leading and project integration. These are far more likely to be seen as valid management contributions by high skilled staff enabling them to relate to their managers as fellow professionals. Skilled staff are usually willing to accept the validity of other specialist skills but are unlikely to see the justification for the authority of an individual simply on the grounds of grade, role or job title.

Staff Motivation

One of the greatest headaches for management is recruiting enough skills. Personnel with technology, systems and/or scientific/engineering skills are generally in short supply. Therefore those with such skills generally have a wide range of employment options available to them, particularly if they also have experience.

Conventional grading structures can make devising suitable packages very difficult given the common assumption that managers must have superior packages to those being managed. The salaries and benefits that are likely to be necessary to attract and retain scarce skills may stress the traditional pay and grade structures in more hierarchical organisation to breaking point. These stresses may be increased by performance related pay regimes because most such schemes restrict how performance awards can be made and force each department into conforming to a pre-determined reward distribution pattern. Skilled staff are particularly likely to be aware of, and resent, the inconsistencies in such schemes.

Where true performance related rewards are used not only are they expensive but also can they can generate significant anomalies in the assumed relationship between organisational grade and remuneration. Managing this may mean jettisoning the assumptions about what a manager is and how the relationship between them and their direct reports may be. As a result most organisations cling to pay structures that are related to management position and curtail how much of the pay budget can be distributed on performance grounds.

However many skilled staff are motivated by things other than salaries and may well be willing to accept lower salaries in return for:
· flexible working,
· superior working conditions;
· access to new technologies, ideas or techniques;
· external recognition, for example the ability to contribute to national and international debates, take part in conferences and workshops, publish books and papers within working hours;
· having a financial stake in the developments/products they generate.

But useful though these rewards are in attracting skilled staff many of them do not sit comfortably with traditional management assumptions and techniques, and sustaining them over time may present unforeseen challenges that erode or limit their use. Until this tension about rewards, working practices, the nature of supervision and value of work is resolved many organisations will continue to pay out large amounts of money to recruit skills only to see them disappear out of the door before their recruitment costs have been recouped.

So does it matter?

There can be little doubt that it does matter, as poor management of skills tends to result in those skills voting with their feet. This means that continuity of skills cannot be assumed with serious knock on effects for a whole range of products and services that will be dependant upon having the necessary skills in place at all levels and at all times.

The availaibility of skills also has serious consequences for how new products and services can be managed, and even when and how they are envisaged. In a rapidly changing world this effect in particular can have long term cosnequences for whether an organisation can be a major player in its market. Therefore some skills recruitment and developement has to be in advance of the immediate need, a factor that again presents problems for convention management practices and expectations. as discovered by many UK organisations that attempt to run research and/or advance development functions.

This need also runs counter to the one management practice that emerged in the last part of the twentith century, the 'just in time' or 'lean organisation' approach. Here the assumption is that resources can be brought in as required and at short notice rather than held in readiness to be used, and it extends to human resources as well as finacial and technical ones. Yet managers often underestimate the amount of effort and cost involved in acquiring skill, adopting an approach that is rooted in the past availability of manual labour and assuming a rate and level of recruitment and retention that cannot be achieved. Coupled with lean organisation practices this can have a number of effects including: -
· The setting of inappropriate targets and deadline;
· Inadequate investment in the skills currently available;
· Problems with maintaining the level of service required;
· Difficulties in staying with in budgets because of the need to recruit temporary staff.

This underestimation of the accessibility of skills has many consequences not least the failure to deliver the level of service that customer expect with long term implications for maintaining a contractual relationship or a brand image. The failure to ensure adequate access to core skills also has effects on other the people involved in delivering what are often complex products and services and it is often a factor in cases of workplace stress amongst managers and other employees.

The failure to manage skills effectively can also lead to loss of skills at the national level, firstly by encouraging a ‘brain drain’ where skills migrate to places where working practices better meet their expectations and goals; and by reducing the perceived value and importance of key skills and so reducing the number of the next generation choosing to pursue them. This is a particular issue with skills that are perceived as ‘hard’ to achieve, such as technical and scientific skills. Over time this failure to manage an constant flow of skills makes it hard for the UK to compete and so to meet the needs and expectations of its population with wide ranging consequences.

Conclusion

If we are to make most effective use of the body of skills available to UK organisations, and to extend and develop these skills as required, new attitudes and approaches to skills and their management needs to be developed. These new techniques and practices must meet the needs of the organisation and its management, but must also acknowledge the contribution of skills to the enterprise and accommodate the preferences of skilled staff and the wider choices available to them. Managers need to abandon the old ideas of coercion and control and to see themselves as stage managers enabling the best performance from all, rather than as sheep dogs containing and nipping at the heels of an unwilling flock.