Welcome to the Managing the Future of Work podcast. I’m Harvard Business School professor and visiting fellow at the American Enterprise Institute, Joe Fuller. Today, I’ll be speaking with David Blake, executive chairman of Degreed and the author of the new book The Expertise Economy, about the opportunity to create new credentials that help companies, workers, and job seekers, and how to promote an environment of constant learning. Welcome to HBS, David.

David Blake: Thank you!

Fuller: David, there’s a lot of discussion today among policy makers and executives about credentials. We need to be more specific about credentials, we need to get people more credentials. What’s your attitude about credentials? How do you define them? And how does it shape your business at Degreed?

Blake: If you want to think about credentials, a good way to just frame it is: Credentials are a form of currency. They hold and store value, and they unlock transactions for us in our lives. The world has historically really only had one universal currency when it comes to credentials. There’s lots of credentials in there, but the college degree is really the only one that is universally understood and accepted. The market is hungry for the ability to speak the language of skills, but it can’t. We don’t have a language, we don’t have credentials that signal “skill.”

Fuller: When you use the term “market,” are you talking about employers? Are you talking about educators? Are you talking about individuals? Are you talking about the entirety of the market?

Blake: Yeah, I think, ultimately, the entirety of it. I think we all stand to gain. You see higher education trying to move to more transparent signals of what is being taught and learned inside of the college degree. “Competency-based education” is sort of the term that’s been taken by that. And then we see employers, the skills gap, the war on talent, the ability to find the right people for the right job, all of it.

Fuller: If a credential is a reflection of the skill, what constitutes a good credential? How do you define it? What’s going to be a useful credential to fill this need that you’re seeing?

Blake: We tend to just think about credentials as helping us gain employment, helping us find a new job. But I actually think, as you look at the broader world of credentials, there are a lot of different jobs to be done. So if you think of something like a professional designation—a CPA or a CFA—that’s doing a different job than your college degree. It is the gates by which you enter a professional field, it is this threshold by which you are able to signal a minimum level of competence in the field, and there are still other jobs to be done that I think the market is hungry for. And so for example, if you put 50 CPAs in a room and then …

Fuller: Sounds like the beginning of a bad joke.

Blake: Yeah, this is not how you want to start your conversation at a bar. Which one of them would you hire? Which one? And I don’t know, and you don’t know, because that CPA did an important job, but it has left another job undone, and that is to give us differentiated information about who has what expertise at what levels sort of in what field, who might be the most oriented to the needs you have for a CPA. There’s lots of different jobs that credentials can fill out there.

Fuller: You’ve been referring to college grads exclusively. How does that apply to the more than 60 percent of Americans that don’t have college degrees and aren’t going to get one?

Blake: When we start to talk about the 60 percent of the workforce who didn’t have any level of college education—much less the percentage who graduated and have a college degree to transact on—it’s all the more important. In today’s economy, you ask someone, “Tell me about your education,” and the only answer we have is to say our degree or where we went to university, or that we didn’t go. And one of the things that really inspired me to work on this problem was a conversation I had with a woman in her probably mid-50s. And I became obsessed with this question, asking people, “Tell me about your education,” as a sort of proof point of where we are in this journey, and hearing people’s answers. I asked this woman, “Tell me about your education,” and she said, “Oh, I’m not educated. I didn’t go to university.”

It just struck me to see someone at her age who, her university experience would have been 30 years prior, and to think she’s carried for her entire adult life that she is an uneducated person because she didn’t have that experience 30 years ago, as if it at that point makes any difference at all. And for those of us who have graduated, we certainly know it doesn’t. Our capabilities, the knowledge in our head at this point, is no longer a function of what we did 30 years ago. And yet for her and people like her, they are left without a way, without a language, without a credential, without a way to signal to us the knowledge, the expertise, the skills that they do have. There is an incredible opportunity, if we can move to the place where people can, in a verifiable, trusted way, signal for the skills and the education that they have on an ongoing basis. We need to get to the point where, when I ask you, “Tell me about your education,” you can answer that with what you know today, not with what you did 30 years ago.

Fuller: Let’s come back to your example, the 50 CPAs. I’m still struggling to come up with a punchline. But your image was, how do we know which one to hire—what specific type of expertise they would have that might allow us to pick one over the next? How would that show up in terms of a credential?

Blake: Yeah, this is a little bit of the work that we do at Degreed. And really, in talking with companies, our clients are about 20 percent of the Fortune 200—a lot of the world’s largest multinational, global companies across a variety of industry and fields, and ultimately hundreds of clients beyond those largest ones. And as you talk to them about skills, and really about their people and the talents of their people, employers do care about what you know. They do. But they care more about what you can do. It really is about trying to get past just, “Have you learned something? Did you sit through a class? Did you finish a course? Did you finish this certification program out there in the industry?” and more, “What is your applied expertise? What is your mastery?” That’s the highest form of what they want to know.

So, on Degreed, people can be certified in any skill by coming and bringing forward evidence of their applied mastery. And then it goes through a process of peer and expert review. That allows employers to start to have a uniform and codified way to see the skills of all of their employees across the many different fields of practice inside the company—from technology to finance, from retail to manufacturing, from the senior executives to the incoming interns. It gives them a language inside of their company to look at everyone’s applied mastery and tap that language for skills.

Fuller: What were they relying on in the past? There have been big, large companies for going on 100, 125 years, and they trained people, they promoted people, they hired people. But it sounds like you’re suggesting a pretty big change in the way they think about that.

Blake: The world has operated on other signals. There’s other substitutes—your last job title, the last company you worked at is a signal. I came from X company. Well, that connotes value and information. My college degree. There’s performance management systems of just assessing, “Are you good at your job?” But that’s different than, “What skills do you have?” But we use that substitute to staff people and to clear the economy and the market. The world has shifted, though. And that’s really important to note. We’ve been operating these companies that are 100 years old—they’ve been operating, we’ve all been operating. This institution, universities have been operating in a world where information and education was scarce, where the rate of acceleration and digitization was much slower. We’ve shifted now into a world where information and education are now abundant, and that shift changed a lot of things. Primarily, in a world where education and information were scarce, the model was: Learn then apply. We feasted on education, and then we went and applied it over the lifetime of our career. And in a world where information is abundant, we have to be learning all the time. In that feast-and-famine, learn-then-apply world, that college degree actually was a pretty meaningful signal of all the education you had accumulated and the skills that you were going to be applying. In a world where we have to be learning all the time, we now don’t have a way to signal it. PwC says, this was …

Fuller: …PricewaterhouseCoopers, the public accounting firm and consultancy?

Blake: Yes. Yes, thank you. It’s 92 percent of global CEOs worry that they don’t have the skills to meet the needs of the future. And it’s worry, not know, because they don’t even know. They don’t even know if they have the skills, they just worry, 92 percent. Same study: 77 percent of global CEOs say the biggest, the number one biggest threat to their company is not having the skills that they need. And yet, zero percent of those global CEOs could tell you, what skills do they have? And so it’s this reflection of the fact that we’re in this moment where the skills have become really very important, and yet we have been incapable of having a measurement, of having an answer, of having any transparency, any real way to begin to have the conversation.

Fuller: So it sounds like there are two things going on here. One is that the world has relied on, the word I’m going to use, proxies for what someone is able to do. It could be a degree, it could be my last job title, it could be the firm I used to work at. And that those proxies are less and less valid because there’s such a rate of change in what you need to know to be effective that your 92 percent—or PwC’s 92 percent—of CEOs are worried the proxies are no longer good indicators that they actually have the talent pool to get tomorrow’s job done as opposed to yesterday’s. Is that fair?

Blake: That’s it. The shelf life of your college degree is getting shorter and shorter.

Fuller: So let’s talk about what Degreed does for a company. Because you’re a reasonably young company—you’ve got 20 percent of the Fortune 200—that’s pretty rapid growth and market penetration. What do you actually do for them to help overcome that problem?

Blake: Recently the CEO of Boeing committed a $100 million into skill and talent development of the organization. That is a massive commitment. Where do you even begin to know that you’re doing it wisely or to people’s real benefit? And that’s where Degreed comes in. What we do on the platform is we take all of a company’s job titles, and we help them identify what skills are required for every job inside the entire company. And we do so in a leveled way—so not just what skills are required, but what skills are required at what level.

So if I want to become a product manager, what skills are required inside of our company to become a product manager? Well, the company is able to identify project management and maybe some UX [user-experience] design, and some consultative sort of change management with clients, maybe some light front-end development, technology, HTML skills. So they identify the skills required and at what level. So project management is going to be required at Level 6, where maybe HTML is required at Level 1. And so you are able to see now transparency inside the organization. For every job function, what are the skills required at what level? And then, as an employee, I’m able to have my skills measured, which then helps me map to, where are my personal skill gaps? So I can see that for my current job or for an aspirational job, how do the skills I have at the levels I have them map to the requirements that the organization has for any job? Then, for anywhere where you have a personal gap or a deficiency that you want to work on developing, we map all of the organization’s resources that can help you to develop that skill and put those at your fingertips. Further, we’ve mapped nearly essentially all of the world’s informal learning resources to those skills as well.

Fuller: What’s an informal learning resource?

Blake: Articles, videos, books, podcasts. This podcast we are doing, as it goes live, will get indexed and mapped into the Degreed system so that, when someone wants to learn about credentials, this is one of the learning resources that will be available for them to learn about the topic.

Fuller: So it would be anything from this podcast to a YouTube to a Khan Academy tape?

Blake: Yes.

Fuller: In terms of employee’s capability, who says whether or not they’re capable? Is that the supervisor’s job? Is it linked to the evaluation performance management system? How do you get a shared understanding of the organization’s definition of my competence and my own self-awareness of that and self-definition of it? How do you arbitrate when there’s a misfit?

Blake: We have a suite of tools, because the questions you’re asking reveal the need, ultimately, for different sorts of tools for different jobs. We have Degreed skill certification. It is a highly rigorous, peer-reviewed, expert-reviewed process of your applied mastery. That’s what I gave reference to earlier. But that process takes you a couple of hours to fill out, and it takes several hours for the process to then be evaluated and reviewed, and ultimately certified. So that is hard to do on all of your skills continually. It’s the kind of thing that you would do maybe once or twice a year around defining skills in your job. If you really want to get a map of your skills, you need a tool that can bring that information in faster. We have a manager review tool, we have this rubric-based skill review, we’ve got self-assessment, a guided self-assessment. We’ve got these different tools, some of which are less rigorous and have less veracity, but are easier and faster to use to help you get that scatter plot of your skills.

Fuller: What’s your evaluation of the quality of a lot of the resources available within companies in terms of actually fueling learning? I think a lot of our listeners, their immediate reaction of, well, there are corporate resources for learning is to envision a very tedious online, video-supported, simple-minded role plays, intrusive, will now ask four multiple choice questions. They give learning a bad name. Am I being too caustic about it?

Blake: I love the adjectives, yeah. Invasive and annoying and, yup, it’s true. The industry, collectively, has a terrible Net Promoter Score. There is a whole sub-category of viral YouTube videos of corporate training. They’re so bad as to go viral, and they’re fun because they’re so bad. The world has shifted, so the job of a company really should shift. When information and education was scarce, I needed my employer to go out there and to expend the energy in a scarce world of finding the right information and pulling it together for me. And now I don’t. I really don’t. I can go to Google and find something way better than my company will have developed for me. Further, there’s another shift, which is companies, it’s really been company-centric. When a company was training you, it was not for your benefit, it was for theirs. It was, “I need things from you, I’m going to train you on how to do the things I need from you.” Now, employees are demanding, “I want you to develop me, not for me to be a cog to check your boxes.”

Fuller: And educators too, I dare say. I’m not sure if I want some of my students listening to this. Can you just talk about what you’ve learned about what constitutes good learning and what makes learning efficient and enjoyable and something people want to engage in? Because I constantly hear, ”Well, everyone’s going to have to be a lifelong learner,” and other platitudes and nostrums. What does that mean to you, and what have you learned in working with companies about what distinguishes a good learning environment from a bad one?

Blake: My favorite quote, Eric Hoffer says, “In times of great change, learners inherit the Earth, while the learned find themselves beautifully equipped for a world that no longer exists.” So to learn something in a world that’s changing so fast, prepared you for a challenge that existed yesterday, and to be ready for whatever is going to come at you in the future, you just need the skillset of being good at learning it in that moment of need. The greatest companies—truly the companies with the best, most innovative learners and learning culture—are the ones who have an empowerment model. GitHub, they give their employees a learning budget and let them sort of pursue what they’re going to learn with that budget. That’s very different from this old world where the company was dictating, “Come and check this box that I need you to know.” It’s this new model where it’s saying, “We’re going to empower you; you go and learn. We trust you, you know best; we want to make you the kind of person that can solve the problems as they come.”

Fuller: Let me risk a tongue twister here. Can you learn to be a learner?

Blake: Over time, I’ve gotten to know some of Degreed’s power users, the people who use it the absolute most, because I was curious. I’m an aspirational learner. I came into this life not a very good learner. I aspired to become a better learner, and I’ve loved learning from people who are good at it. You look at those people, and they do learn differently than the rest of us. They do. It is a skillset, and they do it differently. Some of what they do is they create systems and scaffolding for themselves. They’re deliberate, they set goals. We are so used to, as consumers of education, showing up in a classroom, and having all this work. There is a ton of work that goes into learning. The professor, their preparations, the syllabi, the textbook, selecting that, the curation. The curating of the environment of who are we going to be talking to, who’s your peers, who’s the student, who’s the cohort? People who are truly great at learning, they deconstruct everything it takes to learn, and they set up those systems for themselves. It’s really hard, and I would dare say there aren’t that many people that are actually qualified as those really great 10X-type learners.

Fuller: How does a company create a culture where this becomes part of the way work is done, and something that’s acceptable and exciting? Because most people in most companies I’ve witnessed, when they’re told they need to learn something, they view it maybe as the equivalent of, “You have to take this required course,” and they view it with dread or as remedial, as opposed to something that’s exciting and is going to unlock their potential. What have you noticed about the ability of an institution to make it apparent, or make it palatable, to confront what you don’t know and eager to backfill that capability?

Blake: There’s lots of principles here. I think transparency, permission, psychological safety, leadership. Very quickly touch on those. There are studies out there that show how exercise is contagious, that if you have people in your life who exercise, you are more likely to exercise, yourself. And so is learning. In most of our professional life, professional experiences, and most employers, you don’t have any line of sight, you don’t have any transparency to what the people one cubicle over from you are learning, or that they are. So if you can create that transparency, it makes it contagious. Permission: If you walk up behind one of your colleagues, and they’re on YouTube, what are you thinking in your head? Are you thinking, “You’re goofing off?” Or in your head, are you saying, ”Man, I wish I was as curious as you are; I wish I was dedicated in making time in my day to be a learner like you are?” Maybe they are screwing off, but most people on YouTube, they’re trying to learn if they’re doing it at work. In that permission—in having a culture where when we send you to go take that class, to go to that conference—we’ve given you permission to learn. But informal learning—when you’re doing it on the job, there’s often not permission granted—that when you’re not building the cog, then you aren’t doing your job. So you have to give permission. Psychological safety: the ability to have it be okay to not know something. If that’s not okay, the inverse is you are essentially expected to know something. In a culture where you are expected to know, you have knowers, not learners. So you have to create the psychological safety. Leadership: huge. It makes an enormous difference. The best companies are led by people who are, themselves, great informal learners. There are incredible examples of that. Bill Gates, Elon Musk, Clayton Christensen here at HBS, independently have all gone on record as saying that they read the entire encyclopedia as children. Great business leaders are great informal learners. JFK said America’s founding fathers were also our founding scholars. Our best leaders throughout time, history, and business, have been great informal learners.

Fuller: It probably explains my career path. I did not read the entire encyclopedia as a child. Maybe I’ll start.

Blake: Nor did I.

Fuller: Maybe I can inspire to plow through it. And, of course, I’ll do it online. In the book, you talk about a concept called “skills quotient.” Can you talk a little bit about that, why you think that’s a powerful idea?

Blake: The skills quotient is a very simple, straightforward framework for any organization to be able to answer in a universal, codified way, for the skills of a person, team, or the entire organization. We’ve seen parallels in other parts of business that are similar, where they go from being essentially a black box to getting data. And then everything changes. I think the one that’s cleanest to talk about is Net Promoter Score. The practice of surveying your customer satisfaction was a black box. There were lots of ways companies went about it: qualitative, quantitative. But none of them were universal. So that meant there wasn’t a single executive-level question, and there wasn’t a single executive-level metric. So it buried that practice in the middle of the organization. No CEO could answer in a uniform way to the market what the level of their customer satisfaction was. And then, in 2003, Harvard Business Review and Bain published an article that introduced Net Promoter Score to the world. Fifteen years later, every CEO in the world knows the Net Promoter Score of their organization. It took that practice from being buried in the middle to being an executive-level metric that every CEO knows. It took it from being a black box to something that’s now codified, can be benchmarked over time between companies. It creates continuous improvement because now you have this number you’re able to drive up or down and see, if we change this, did it improve it or did it make it worse?

If you look at that and then take the world of skills, of people, of talent, 92 percent of CEOs are worried that they don’t have the skills of the future. Seventy-seven percent say that it is the biggest threat to their company, and yet none of them—zero percent of those CEOs—can tell you do they have the skills they need to win. We exist in a world that doesn’t have that executive-level question, that executive-level metric. And that’s what we set out to change with the skills quotient, was to bring forward to the market a universal way, very straightforward, for companies to be able to begin to answer that question.

Fuller: They’re defining what they’ve got vs. what they need, track it over time, measure it—“What’s measured gets managed” in most companies, as the platitude goes. When you think about a skills quotient, is there a way you can use that as effectively for, like, competitive benchmarking? Or what are the types of skills that I’m going to need to, not just be competent, but to excel, relative to competitors?

Blake: So the framework, very simply—the aggregate sum of the skills you have divided by the aggregate sum of the skills you are expected to have—times 100. So a zero to 100 scale. So your skills quotient might be something like a 76 for an organization. Now, all of a sudden, a CEO has a way to answer, “Do we have the skills we need?” Well, as an organization, where are we at a 76, so we still have this big gap. Okay. And then you start getting these executive-level questions that the next layer inside the organization would be responsible to know and to be able to action. Well, is 76 better or worse than we were last year? Oh, it’s better. We increased by 4 points; we were at 72 this time last year. All right, well what’s driving that improvement? Well, really, the improvements in skill quotient, the technology team drove their skills quotient from a 54 to a 60, while finance, it went from a 72 to being a 69. They actually slid. Well, what’s going on over in finance? Congratulations to technology. And then it begins to cascade. And skills quotient is something that you can see for your individual employees and individual skills.

Fuller: In marketing and sales, we talk about the difference between a competency or a product attribute that qualifies a vendor for consideration vs. one that differentiates my offer from yours is account-winning capability. How would you apply that logic to skills? Many of the skills of an organization presumably are high competence and the capability to do routine things that, even if you do them extremely well, are not going to be the basis for driving a different competitive outcome in the marketplace. And there are presumably other skills where having a different quotient than your competitor would really make a difference in terms of outcomes in a marketplace. Is that true, and to what extent can a company really get insight into what those are?

Blake: Yeah, it’s a question that pulls at a couple of things when you start talking about skills. What are they and are they all equal? You have hard skills, soft skills—that’s a very easy and quick way of framing it. And then, as you look, referencing, “Hey, what skills are sort of the table stakes, that if we don’t have them, we just sort of aren’t getting off of the blocks? And which ones are really a competitive advantage—are going to let us unlock innovation and take us forward?” Even among technologists, what employers are saying is the most demanded skill are a lot of the soft skills. It’s leadership among their technology engineers, it’s the interpersonal side of it. Without good data, we really can’t ever begin to answer these questions at scale or in a meaningful way. So the first step is being able to codify numbers to it that mean the same things to all of us, to really open up that field of research to being to say which skills are really going to make a difference in what directions.

Fuller: Thank you, David, for sharing your insights on how businesses can promote learning and how creating a learning environment can advance the interests of both workers and their employers.

Blake: Thank you. It was fun to be here.

Fuller: From Harvard Business School, I’m Professor Joe Fuller. Thanks for joining us.