What is a Capability Academy & Why Should You Be Using One?

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Josh Bersin coined the term “capability academy” back in 2019, a method of learning that focuses on the business capabilities companies need to thrive. It was created because, while developing capability is as essential to your organisation’s performance and success as ever, traditional L&D isn’t necessarily the most effective way to build expertise.

In this article, we’ll get into detail about what capability academies are and why you should be using one to build capability in your organisation.

What is a capability academy?

A capability academy is a physical or digital location for training designed to build capabilities. They’re organised by “functional area” and strategic need (e.g. finance, marketing, or sales). These functional needs are determined by the organisation and thus are sponsored at a business level, rather than by individual business unit leaders.

A capability academy incorporates:

• Self, manager, subject matter expert and even peer assessments as part of training needs analysis, training design, and career momentum.
• End-to-end training. That includes internally created courses, simulations, industry speakers, workshops, assignments, and certifications.
• Strategic workforce plans. What sets the capability academy apart is that it is not just tied to specific areas (like leadership or sales) as training universities traditionally are. Though they can still be catered to a niche capability set, they’re largely designed to build critical capability at all levels of your organisation, so talent is being developed vertically and laterally.

Why use a capability academy?

Let’s start with a bit of a contradiction to that last point of the previous section. Not all training warrants the architecture of a capability academy. Simple compliance is not strategic enough to need an entire academy, largely because it can often be managed by third-party content or certification bodies. And while a contributor to smooth operations, it’s ultimately not a strategic driver.

This is really the key question to ask when considering a capability academy. What drives competitive advantage for your organisation?

Josh Bersin likes to do a 2×2 matrix to determine:

• The most strategic capability areas or sets (these drive competitive advantage)
• Which areas or sets are custom (so require more than just off-the-shelf training)
• The areas or sets that are urgent to develop for growth.

The sweet spot for capability academies exists between strategic and custom, for this is the point at which learning and development needs to be as contextual as possible to your organisation. Which is often where traditional L&D falls down. Consider:

• 70% of employees don’t believe they have the expertise to do their jobs effectively, and 53% say their role requires specialist training.
• Learners forget up to 90% of training content within the first month.
• 94% of organisations spend most of their energy on stakeholder engagement and program development, compared to the 2% that are actively measuring and assessing L&D.

Very often, L&D is not designed for the right reasons or at the right time. Traditional L&D can be designed uniformly, meaning people wade through a lot of content to find something actually meaningful to them. That can have the adverse effect of desensitising them to training, as well as wasting L&D resources. The old-school mass content libraries don’t help, either. While they solved yesterday’s desire for on-demand, “user-centric” LXPs in the peak of Netflix’s popularity, they’ve simply created a problem around smart content discovery.

The last thing we’ll note about the broken myth of L&D is that it has a very this-or-that approach. Micro- and eLearning and remote work made in-person, offsite training obsolete and uneconomical. People were busy and needed training in short, sharp, self-directed bursts. But then many organisations started utilising more than one learning management system (LMS) to serve their unique training needs. Return to work made eLearning impersonal, and with the addition of mass content libraries, a minefield for employees and a cost centre for businesses. Neither phase actually addressed business needs.

The all-or-nothing approach does you a disservice because it says that learning can only occur one way. All-in on eLearning, and you deny the impact of learning on the job. But back only macro learning, and you neglect the opportunity to provide learning in the moment of need. A blended learning approach allows you to address broader business needs and niche employee pain points, which brings us back to the capability academy. It’s an ecosystem in which employees can learn, experts can contribute, people can share best practices, and capability can be developed and nurtured.

The goal is to deliver business capabilities, not skills or even a certain number of courses completed. Activities and courses are tailored solely to your processes, procedures, and tools, usually taught by internal experts. The outcome of a course or program is often a credential or certification that has inherent value—a cause for promotion, salary increase, or lateral job move, for example. (See the continued connection between training and strategic business plans?)

The essential components of a capability academy

When you build a capability academy, there are a few essential components you should include. More specifically, there are seven key elements:

1. Identifying capabilities that need development. What are the job-related capabilities and power skills (also known as soft skills) that your company needs to deliver on organisational goals and priorities?
2. Defining desired outcomes for measuring success. You can set learning to enhance your specific goals, such as building digital capabilities or more strategic leadership.
3. Conducting a learning needs assessment or training needs analysis. This helps determine capability needs as well as the most effective learning approaches.
4. Designing customised learning paths. Guide learners along a certain pathway tailored to increase their engagement, and your training’s ROI.
5. Implementing blended learning approaches. People retain knowledge better when they experience a variety of learning approaches (like digital learning programs, coaching, and real-work projects) to hammer the message home.
6. Incorporating interactive learning. Learning in the flow of work is more likely to lead to knowledge retention, enabling hands-on experiences employees can link to their day-to-day jobs and performance.
7. Emphasising real-world applications. These help cement the importance and relevance of the capability to learners. Case studies can help in emphasising your point, here.

Best practices for implementing a capability academy

You know the key components you need to include when you design a capability academy, but how do you effectively implement one? Implementing capability academies requires careful planning to ensure ongoing success, so we’ve created a list of best practice activities for you to follow.

• Get leadership support and buy-in
• Set up a performance learning management system (PLMS)
• Communicate the rollout strategy
• Monitor training effectiveness
• Measure the ROI
• Include case studies.

Gain leadership support and buy-in

Josh Bersin calls capability academies a corporate investment, which means it needs the buy-in, ownership, and governance of business leaders. Because, as with all corporate training or change management activities, there’s a high chance (around 70%) that it will fail to make a difference in the workplace without leadership support to encourage employees to engage in change management programs.

The best way to secure buy-in from leadership is to frame your corporate capability academy in terms of the KPIs that they care most about. Capability academies are about developing key capabilities for each function of your business, so you should make it clear to leaders how the development of those critical capabilities can improve business performance and address leaders’ pain points.

Set up a PLMS

Don’t confuse a capability academy with traditional learning and development. L&D programs, and the traditional learning management systems (LMS) that are often used to deliver L&D, emphasise compliance first and foremost, rather than developing technical skills (the specialised knowledge and expertise needed to perform the company’s processes) and soft skills (the personal attributes that allow individuals to interact effectively with others).

On the other hand, capability academies are designed to deliver on business capabilities, in order to increase business performance, fuel innovation, and meet business goals. This is where a PLMS comes into play. Unlike an LMS, it links corporate learning to organisational performance, allowing organisations to ensure that their learning programs are effective.

Communicate the roll-out strategy

Just like you need leadership buy-in, so too do you need the buy-in of your employees who will be participating in the capability academy. You can’t just unveil a shiny new capability academy and expect it to be a success from the get-go if no one even knows or cares that it exists. This is what we call organisational resistance to change, and if you can’t fix it, your capability academy will be dead in the water.

The best way to combat resistance to change is to help all involved stakeholders understand the “why” behind a capability academy. People don’t want to participate just because someone said so. So, you need to answer two things for them:

1. What’s in it for me? Demonstrate what the benefit of a capability academy will be.
2. What does it mean to me? Show the value add, not the potential loss. Think better or more accessible career progression based on personal competence, rather than pre-determined career movement.

Just remember that something like “improved digital skills” might make sense strategically, but doesn’t really tell employees much about why it’s something they should be striving to attain.

Monitor training effectiveness

This is where you determine how successful corporate training has been based on the rate of learning transfer occurring in your organisation. You can measure training effectiveness with a training needs analysis to find where your training has closed capability gaps, and where capability development leaves more room for improvement.

It’s best to use a training needs analysis at different step in the process, here. First, you should use it before employees begin participating in a capability academy. This way, you’ll be able to determine what capabilities need development. Then, you should run a training needs analysis afterwards to get an idea of how their capabilities have improved due to participation in the capability academy.

Measure the ROI

Your return on investment (ROI) is the dollar amount your company makes back as a result of training—or, in this case, as a result of your capability academies. It’s not about participation or course completions, but about pain points addressed, goals met and increased revenue due to effective learning.

Measuring your ROI shows you how much money you spent on one capability academy and how much revenue that capability academy returned to your business in the form of competent employees. It also helps with justifying your capability academy budget to leaders to gain their buy-in, meaning you can use it to justify an ongoing commitment to continuous learning programs that will see the incremental change your business needs for long-term sustainability.

Include case studies

Designing and implementing a capability academy on the fly is just going to lead to disaster, whether that’s immediate or not. This is why you should include case studies as part of your implementation. They ensure you create capability academies that are functional and affordable.

Let’s put it this way: A case study helps in your own complex problem solving when it comes to potential issues. They allow you to see how other organisations or people responded in the same or similar situations. In other words: What worked, what didn’t work, and what needs to be changed in the future? It shows you where they might be a different approach to building capabilities that might better benefit your company.

The impact of not using a capability academy

When you don’t use capability academies, you’re just handicapping your organisation’s ability to be a sustainable, agile player in the market. The biggest impact of not building capability with an academy will come to your organisation’s productivity, performance, and competitiveness.

A capability academy is an environment that enables knowledge transfer from experienced employees to newer ones. Not having a capability academy risks losing crucial organisational knowledge due to natural employee turnover, which can lead to poor succession planning (as replacements won’t have the skills needed to fill senior roles efficiently) and poorly managed teams.

This just means that ill-prepared leader won’t be able to effectively head the charge in organisational strategy and performance. A good example of this is facilitating the application of learning work. Successful learning results in employee engagement, increased productivity, and greater efficiency in terms of employee and process efficiency. But without a capability academy (or capable leaders) to contextualise the real-world applications of learning, you won’t see any improvement in productivity or performance from employees using their new knowledge. In short, you’ll have used up the training budget for no reward.

In the end, this just harms your competitive advantage in the market. Performance and productivity will decrease without effective capability academies to drive continuous sustainable and agile organisational transformation. When your workforce stagnates like this, your business falls behind the competition and takes a hit to its bottom line.

The technology needed for effective capability academies

We’ve mentioned a PLMS a couple of times in this article, and we say this from a position of authority in this technology segment, as we’ve pioneered the first PLMS here at Acorn. Why did we do this? Well, corporate learning is broken. Acorn is the antidote. It’s the only solution that guides learners step-by-step to master the role-specific capabilities that accelerate organisational performance.

Both leaders and learners are tired of uninspiring training and performance reviews. People crave paths to excellence but are sick of wasting time wading through mountains of content just because someone said to. So, they’re learning outside of their organisation’s LMS by interacting with peers—and that learning is lost.

Acorn captures what’s already happening and makes it easy to find, facilitating knowledge transfer between employees and fostering a learning-in-the-flow culture where everyone helps each other improve. Acorn curates internal and third-party sources and intelligently serves up contextual learning opportunities for each person’s betterment, and captures key interactions hidden within organisations, transforming them into shareable learning assets. In other words, it’s the “place” that makes up a capability academy, equipping people to grow and excel in the ways that positively impact outcomes.

Key takeaways

Capability academies are the key corporate learning approach to ensuring that businesses develop their critical capabilities from soft “power” skills to technical and specialist skills. They’re a place, whether digital or physical, where you can build strategic capabilities through specific, curated training.

You can ensure the effective implementation of a capability academy by:

• Getting leadership support and buy-in
• Setting up a PLMS
• Communicating the roll-out strategy
• Monitoring and reviewing training effectiveness
• Measuring the ROI
• Including case studies.

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