Acquire Skills, Not Credentials

August 13, 2015

Don't rely on the declining value of credentialing signals: demonstrate you have the skills.

My recent conversation with Max Keiser on Summer Solutions (25:45) included three bits of advice:

1. Stop financializing the human experience

2. Acquire skills, not credentials

3. Vote with your feet

Today's topic is acquire skills, not credentials.

I have written two books on this topic:

Get a Job, Build a Real Career and Defy a Bewildering Economy

and

The Nearly Free University and the Emerging Economy: The Revolution in Higher Education.

There is a place for credentials that act as an entry key to a profession: a dental hygiene credential, passing the bar exam, etc.

But outside these licensed professions, credentials such as four-year college degrees are fundamentally signals: they don't actually authenticate real-world skills, they simply signal that the holder of the credential completed the coursework.

It is remarkably easy to exit a university with a degree and essentially no practical real-world skills of the sort employers want and need.

That's the problem with the signaling value of credentials: in a competitive economy, employers don't want to gamble that the signal in a credential has value, they want evidence of real-world skills, i.e. the ability to profitably solve problems.

That's the problem with signaling: some signals might be noise. Employers don't want a signal, they want hard evidence of skills.

It is assumed that successfully navigating the institutional processes of higher education will impart professional working skills: showing up on time, performing as promised, being accountable, and so on.

This assumption is false: performing well in institutions of higher learning has no correlation to performance in the workplace. This is the conclusion that Google reached after crunching reams of data.

Lazlo Bock, senior vice president of people operations at Google, made the following comments in an interview published by the New York Times in June 2013:

“One of the things we’ve seen from all our data crunching is that G.P.A.’s (grade point averages) are worthless as a criteria for hiring, and test scores are worthless. Google famously used to ask everyone for a transcript and G.P.A.’s and test scores, but we don’t anymore.... We found that they don’t predict anything.

What’s interesting is the proportion of people without any college education at Google has increased over time as well. So we have teams where you have 14 percent of the team made up of people who’ve never gone to college.”

Doing well in college—earning high test scores and grades—has no measurable correlation with being an effective worker or manager. This is incontrovertible evidence that the entire higher education system is detached from the real economy: excelling in higher education has no discernible correlation to real-world skills or performance.

If the higher education system does not explicitly teach these skills, students will not learn them, even if they excel in fulfilling the criteria of higher education.

The ultimate purpose of skills is to profitably solve problems. Problem-solving has become a cliché of sorts, and so we need to ask, what set of skills is required to profitably solve problems?

The set of necessary skills divides into two categories: hard skills in specific technologies and crafts and soft skills that enable ownership of tasks and projects, systematic application of creativity and critical thinking, and professional standards of collaboration and conduct.

These two sets of skills are essential parts of human and social capital. The ultimate purpose of education is to learn how to acquire human and social capital, and the ultimate purpose of human and social capital is mastery of the skills needed to profitably solve problems.

Problem-solving and accountability have been generalized to the point that we need to specify what they actually mean. In my terminology, they mean taking ownership of tasks and projects, i.e. accepting sole responsibility in the same manner as an owner.

Hard skills in the STEM subjects (science, technology, engineering and math) are no longer enough: professional collaboration skills are increasingly essential even in workplaces that demand engineering and scientific proficiency.

The soft skills of collaboration, adaptability, creativity, entrepreneurism and professional accountability are core skills in every sector of the emerging economy.

Soft skills are not learned by osmosis or magic; they must be learned as systematically as hard skills.

The skills needed to establish and maintain a livelihood in the emerging economy are the abilities to:

1. Learn challenging new material over one’s entire productive life

2. Creatively apply newly-mastered knowledge and skills to a variety of fields

3. Be adaptable in all work environments

4. Apply a full spectrum of entrepreneurial skills to any task

5. Work collaboratively and effectively with others, both in person and remotely

6. Be professional, responsible and accountable in all work environments

7. Continually build human and social capital

8. Possess a practical working knowledge of financial and project management

If we step back and consider the abilities needed to succeed in the emerging economy, we marvel that anyone believes the prevailing (but unspoken) assumption that coursework in the conventional fields of language, history, science and the humanities magically instills these essential skills in students who regurgitate factory-model coursework.

Rather than rely on the same signals everyone else has, accredit yourself. Don't rely on the declining value of credentialing signals: demonstrate you have the skills.

I wrote Get a Job, Build a Real Career to explain how to acquire high-demand skills and accredit these skills yourself.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.