The rapid shift across industries toward adopting AI as the next step in the digital revolution is creating tremendous pressure on line and HR leaders to build their workforce's skills in this emerging technology. At the same time, however, other new tech approaches to developing and delivering products and services are also in play, from cloud computing to robotization to advanced manufacturing, extended (AR/VR) reality, to the Internet of Things (IoT). These and other workflow innovations are driving demand for employee upskilling alongside faster returns on investment (ROI), meaning training alone is no longer sufficient. Executives and boards of directors are increasingly focused on demonstrated skill acquisition and on-the-job application that improve performance, productivity, and customer value. Capability academies offer the promise and ability to deliver that.

Capability academies represent a significant shift for today’s organizations by targeting the development of enterprise capabilities instead of individual skills. They move the needle away from relying on L&D to give individuals access to topical courses and defined learning pathways, hoping employees will absorb and then apply the skills on the job. Instead, the academies engage learners as a community to learn, practice, test, and apply function- or operations-defined skills in business-defined use cases, taught and coached by subject matter experts. They are designed to upskill targeted workers at scale, in a shorter timeframe, and with a higher, more definitive ROI. By scaling learning, more employees can acquire and be certified in the skill sets required to adopt new methods, technologies, and approaches, creating new or expanded organizational capabilities and competitive advantage.

Why capability academies are needed

Organizational L&D effectiveness has long been a source of tension between HR and the organizations it supports. Challenges in measuring that impact are widespread, with 87% of companies reporting they cannot identify learning's impact on business outcomes. At the same time, employees across industries report insecurity: 70% of workers feel underqualified for their current jobs, and 53% say they need more specialized training. At the same time, they found that 90% of content learned in traditional training is lost or forgotten within 30 days. 

Overreliance on eLearning also appears to fail to support the learning styles and preferences of Millennials, Gen Z, and Gen Alphas, who now dominate the global labor force. These workers seek more collaborative, socially driven learning. Similarly, SHRM research has found that employees commonly complain about struggling to stay motivated during training, forgetting material soon after training, and finding training irrelevant to their role. 

Demonstrating a lack of alignment between organizational strategies and employee needs, as only 20% of organizations use experiential learning, and 28% leverage collaborative learning methods to train employees and encourage collaboration. The upshot is that (as reported by PwC in its annual CEO survey) only 18% of global companies have made progress in their upskilling initiatives.

Another critical point is that effective training and development are not just about learning the skills required to perform a task in a new way or using new technology. It is about doing so in the unique context of a particular company. Within any industry or segment, processes and workflows can differ and be managed in ways that are unique to each firm. Resourcing and tooling may be similar, but different business or operating models, company and management cultures, hiring standards, total rewards programs, and performance standards combine to define how work gets done across organizations. New-hire turnover consistently exceeds overall rates, reflecting how experienced new hires often struggle to excel in the same or similar jobs elsewhere.

The nature and make-up of capability academies

Capability academies are learning ecosystems targeted to a specific set of skills associated with an organizational function or strategy, and are chartered, defined, led, and facilitated by the business in partnership with HR. They are designed to develop the knowledge and skills of a targeted population of employees in an accelerated timeframe, using a mix of learning delivery methods. Their purpose is to create a large cadre of workers who can apply their skills across new and strategically critical business challenges and opportunities, increasing the workforce's capacity to deliver significant business, financial, and operational results. Associated talent outcomes (e.g., engagement, retention, productivity) are secondary goals that naturally emerge, but unlike with traditional L&D programming, they take a “backseat” to the business objectives. 

The concept, coined by Josh Bersin, has existed for years in highly regarded organizations, most notably IBM and Xerox leadership or sales academies. Their primary and differentiating characteristics include: 

1. Chartered and sponsored by the business, and jointly governed with HR
2. Focused on building organizational capabilities needed to meet strategic objectives and priorities
3. Targeted on developing critical skills that are needed at scale
4. Instructors, facilitators, coaches, and advisors are functional or operations subject matter experts (SMEs) 
5. Leverages blended learning approaches that emphasize knowledge, skill, and practical application, involving hands-on practice and assignments addressing actual business issues and opportunities
6. Emphasizes the continuous development of skills mastery and application with (during and post-training) demonstrations, assessments, and certifications
7. Develop a full range of skills (technical, interpersonal, managerial) required to perform effectively in new and emerging work processes, environments, and market conditions
8. Address and integrate the organization’s unique culture and process approaches into the learning 

Capability academies are not designed to replace traditional L&D offerings, but to augment them as work changes, new technologies are introduced, or major operating deficiencies are identified. They operate alongside other learning vehicles by providing accelerated, targeted development for larger employee populations whose work processes and approaches require rapid, synchronized change and universal adoption.

How capability academies can improve outcomes

Numerous industry and academic studies have shown substantially higher outcomes from experiential, social, and other forms of informal learning. The approaches capability academies integrate deeply into their offerings address the needs and preferences of most today’s workforce generations—more peer, coaching, and mentoring learning opportunities—and they also directly address what those employees specifically ask for: greater relevance of the content to their jobs.

This is based on years of psychological and educational research, which has consistently (and arguably conclusively) found that discussion, reflection, and applied practice significantly improve knowledge retention. Interacting with and applying learned knowledge, practice with skilled facilitators or coaches, and observing and engaging with others make knowledge alive and actionable. 

At the organizational level, business, financial, and talent outcomes have been substantial. Research by Josh Bersin found that among the high-performing companies that field strategic capability academies, 71% outperform their competitors by:

• 1.5X more likely to exceed financial objectives
• 2.0X as likely to innovate and adapt to change
• 3.0X more likely to outperform talent outcomes 
• 1.4X more likely to “delight” their customers

Those “high maturity” companies achieve this by overwhelmingly delivering learning through strategically aligned academies (7X more than less mature organizations), including structured collaborative learning (4X) and hands-on practice (3X) elements.

The learning and development advantages of capability academies

From the perspective of HR and L&D leaders and their teams, an academy structure offers significant benefits that help build their credibility and effectiveness as enablers of organizational performance. Those include:

Strategic business alignment

Because learning targets developing and applying the skills the company needs strategically, the resulting programs align better with strategic priorities. By leveraging internal experts with institutional knowledge and the expertise of “how things do and can be done better here”, the company’s unique approaches and competitive differentiation can be sustained.

Rapid capability building at scale

Capability academies are designed to accelerate employee skill and ability development faster and at higher volume. Building expertise in new work methods, technologies, and tools across entire teams, functions, or operations in months (instead of years) enables a more adaptable, responsive organizational capacity for handling change.

Enhanced enterprise collaboration

Capability academies use collaborative learning practices and cross-functional and inter-organizational cohorts that expose employees to colleagues outside of their normal daily activities and build relationships and internal networks proven to drive innovation. A better understanding of the nuances and requirements of other functions and business units broadens employee perspectives and can ease unproductive inter-organizational competition.

Tailored to each company’s unique challenges and approaches

Unlike commercially available learning content and resources, the learning and skill development content is customized to the organization’s culture, processes, issues, and challenges. This can lead to more effective change adoption and solution development.

Action learning built on actual applications

Using actual business and operational processes, practices, challenges, and opportunities makes the learning relevant, relatable, and practical for employees. Structured, hands-on, experiential, and social methods are shown to produce superior learner understanding, knowledge retention, and application.

Brings learning to life

Capability academies are designed to better engage employees in learning and their own development. The highly interactive and social nature of the learning, practical hands-on practice and projects, and work with cross-functional peers and experts are energizing and exciting changes of pace for most.

Understanding the use cases for capability academies

Capability academies can be established for a wide range of purposes and topics that target the development of strategic and competitive advantages. They can support building organizational breadth and depth in completely new skill sets (e.g., AI), or strengthen strategically critical functions (e.g., sales). A strategic analysis of business opportunities and/or operational strengths and weaknesses can determine the range of opportunities, and prioritizing those outputs can help identify a starting point. Examples include:

• New technologies, work methods, tools: Adoption, use, and integration of significant changes in work processes (AI, robotics, blockchain, gene and cell therapies). This targets job skills related to topics such as data literacy, analytic proficiency, delivering customer value, applying AI, leading self-managed teams, coaching for performance, or managing digital operations.
• Core competitive skills: Intensive, continuous development where knowledge, application, and feedback/coaching are necessary for success (leadership, customer support, sales). These tend to offer development at every career level, with progressively more sophisticated concepts and capabilities developed from entry-level up through executive roles. 
• New strategy, operating model, or workflows: Adapting to work process changes that require new behaviors and relationships across a large population. Includes immediate and intensive leadership and management development related to reorganizations, changes in strategic direction or focus, or new product or service introductions, all at scale.
• Improving function or operation performance: Enhance process performance in a function (sales, product development, customer support) where achievement is consistently below standards based on managerial effectiveness, employee skill gaps, and significant inconsistencies in process execution. This targets cognitive and behavioral changes and capability levels via a role-based academy tied to proficiency, certification, and on-the-job application.
• Entry-level onboarding and career preparation: Builds a large and continuous flow of talent pool members who receive cross-functional and/or cross-business unit development. This can address the entry-level employee conundrum by providing training, practice, coaching, feedback, and a safe place to experiment and work on real projects as an entry point. Companies in diverse industries ranging from banking to aerospace to manufacturing to healthcare and pharmaceuticals use these to accelerate the professional maturation of their new entrants into the workforce.
  
  

Steps to building effective capability academies

1. Develop a strategy

Start by establishing a vision, mission, and objectives tailored to each type of academy. Identify the business issues to be addressed, and the long-term employee capability and skill requirements associated with those. The strategy should provide answers to critical questions such as:

• What is changing in how we design, develop, and deliver market, financial, and customer value? 
• What are our most strategically critical capability needs? 
• Where are our biggest capability (e.g., skill-shortage) gaps related to those – today and tomorrow? 
• Which ones represent the most strategically critical, highest urgency, and largest scale of skill development needs?
• Which functions, operations, and roles are most impacted by those? 

Use the answers to prioritize the needed capabilities and determine where to start building an academy (or academies). One caution: if the cost, level of effort, and resource requirements appear high, use one topic or skill set as a pilot to test creating a capability academy.

2. Establish a business case and change management plans

Building support and understanding the organization’s readiness to accept and adopt this targeted and concentrated approach to learning and development requires planning. Consider how the requirements of such an approach can disrupt operations (which is actually the purpose and value of implementing these) – people will need time away from their jobs to participate, and managers will need to support and adapt operational schedules and resourcing, and sales/operations/distribution and delivery schedules will be naturally impacted. 

As a result, a business case should communicate projected costs, trade-offs, and added value. At the same time, develop a barrier analysis and change management plan to assess cultural, capability, motivation, and awareness readiness, and the gap-filling activities required for success.

3. Charter the academies and governance model

Create a formalized structure for the capability academies' development, oversight, direction, funding, deployment, and targeted participants. Identify the sponsoring organization/function and the leaders responsible for overseeing and championing the capability academies. Assign a cross-functional team of top, functional, and HR leaders to jointly oversee the overall structure and/or individual academies. The resulting governance councils should articulate and standardize the following practices and programmatic elements:

1. The employees to be targeted for participation
2. The roles and responsibilities of the initial team(s) that will design, develop, and deliver the learning content and activities.
3. The timeframes for programs with suggested schedules (for learning, practice, projects, presentations) and milestones, and learning group/cohort accountabilities.
4. The number of employees engaged in each cohort, and how they will be scheduled to avoid conflicts with operational outcomes.
   
   

4. Define required skills and proficiency level standards

For each capability academy, define the skills to be developed at each proficiency level, and document them as learning objectives. Each should be behaviorally anchored as demonstrable knowledge and skills that can be tested or evaluated. Arrange skills proficiency levels that are expected to be demonstrated at a basic, intermediate, and mastery level. Develop mechanisms to capture, assess, validate/verify, and track skills, such as through knowledge tests, skills assessments, expert observations, etc.

Go beyond the technical capabilities required and consider the circumstances in which they will be applied. For example, how will working with new technologies, operating models, or delivery approaches change, and who and how will their workflows and interactions change? What interpersonal skills will be leveraged, and what cognitive and behavioral traits and skills will be needed? Consider the skills needed to co-work with new technologies, how to think critically about their inputs and outputs, and make decisions based on their outputs with cross-functional peers and outsourced providers.

5. Identify required learning design and development resources

Capability academies rely primarily on internal experts or functional subject matter experts (SMEs) to support content development and delivery. Individuals selected as instructors, coaches, evaluators, and/or feedback providers should have sufficient interpersonal communication, active listening, and emotional intelligence to execute those roles effectively. Where skill or capability gaps are identified, identify external experts to fill them and/or add needed perspectives (especially in more advanced offerings).

At the same time, identify the technologies to support digital learning, knowledge management and sharing, virtual delivery, and collaboration events, and determine with IT experts how they will be configured at the cohort level. Plan to mix and match video lessons, live events, and engaging, hands-on activities, and use collaboration and knowledge management platforms for education, group work, documentation, questions and queries, an expert locator, and supporting reference materials. 

Depending on technology budgets and existing platforms in an organization’s technology stack, learning and collaboration platforms can support academies. Newer platforms simplify academy management by integrating curricula and courseware with cohort-enabling assignments, collaborations, and even skill assessments, mapping, and tracking. Examples include CrossKnowledge, Teachfloor, NovoEd, Degreed, Nomadic Learning, and BCG U.

6. Assign L&D experts to co-design programming with internal SMEs

Although functional and line leaders primarily own capability academies, learning and development teams play a crucial role in creating and deploying content and exercises. They collaborate with SMEs to develop programming by critical topic, with proficiency-based levels and learning/practice/application pathways. They define and document learning content and delivery mechanisms, provide access to and oversight of learning administration architecture and tools, and help build cohort-based programs with a mix of sessions, assignments, practice with peer feedback, and other activities. 

L&D teams support the development and execution of group activities that build skills in team effectiveness, collaboration skills, project management, and innovation. They help structure content and activities tied to specific company functions and processes, using real company challenges and workflows to build skills while solving company issues.

L&D should also be engaged to develop the skills of sponsoring leaders and SME’s as champions, guides, coaches, facilitators, expert observers, skill evaluators, and mentors to the teams and individuals they are assigned to support.

7. Emphasize blended learning

Capability academies should be built on a model that prioritizes experiential and socially based learning clearly relevant to the jobs and/or functions participating employees perform. While the content will naturally require standardized context-setting education best delivered in a pre-read, video, or lecture format, it should still involve group interaction and social learning. Prioritize action learning that mixes programs, projects, and assignments with simulations with opportunities for trial and feedback (peer review), presentations, and Q&A challenges. Use a learn-practice-feedback-coaching-application-feedback cycle.

8. Establish cohort-style learning pods

Determine the ideal size of an academy “class” or cohort and break it into learning pods of 5-7 people who learn, develop skills, and grow together. Arrange them at either the business, operational, functional, or team levels to create a social ecosystem that supports ongoing development and the motivation for higher levels of proficiency. Assign an SME pod coach trained to monitor and evaluate team members' progress, proficiency, and contributions. That SME should be accountable for guiding the team and coaching individual team members when they get stuck, identifying early adopters and high-proficiency team members.

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