What: BCG outlines four critical success factors for building skills-based organizations, emphasizing strategic planning, business integration, technology enablement, and cultural transformation.

Why it is important: The findings are particularly relevant as the retail industry faces a critical skills gap, with 72% of workers using AI but only 36% feeling adequately prepared, highlighting the urgent need for systematic upskilling.

Boston Consulting Group's analysis identifies four key success factors for creating effective skills-based organizations. First, companies must focus on what helps the business most by creating strategic skills plans and launching targeted pilots before scaling initiatives. Second, skills-based work must be anchored in business objectives, ensuring initiatives meet clear demands rather than existing in isolation. Third, technology should be approached as a means to an end, with problem identification preceding tool selection. Finally, skills development must be connected to company culture and people agenda, encouraging lifelong learning and internal mobility. The research emphasizes that successful implementation requires cross-functional teams, clear governance structures, and measurable impact metrics. Despite potential challenges in execution, companies that take this methodical approach can create tangible value while building a more adaptable workforce.

IADS Notes: Recent retail industry developments validate BCG's framework. In March 2025, leading retailers achieved 4.5% annual productivity growth through AI integration, while maintaining focus on human capabilities. However, June 2025 data reveals only 51% of frontline employees actively use AI tools, with just 25% receiving adequate leadership engagement. The gap is particularly evident in luxury retail, where 60% of brands struggle with frontline recruitment and 93% with manager positions. Success stories like IKEA's comprehensive AI literacy program, launched in April 2024, demonstrate the effectiveness of balanced approaches, successfully training 3,000 workers and 500 leaders while maintaining traditional retail excellence.

Skills-based organisations aren’t reaching their potential. Here’s how they can succeed