On Our Minds

Working with so many organizations across multiple issue areas gives us a unique view into what’s happening in the social sector. This is where we share our insights and ruminations.
The High ROI of Human Capital

May 23, 2016, Chicago, Illinois

I had the honor of taking part in A Better Chicago’s inaugural Education Summit this past week. The vibrant event convened business, civic and academic leaders to explore how philanthropy can accelerate change and deliver a world-class education to every Chicagoan. I participated on a panel discussing the high ROI of human capital. My fellow panelists included Michael Milkie, CEO and superintendent of Noble Network of Charter Schools; Melinda Spooner, partner of The Management Center; and Sarah Berghorst, Chicago executive director of OneGoal. The panel was moderated by Doug Scott, A Better Chicago’s incoming president. In the audience were many of the region’s most active philanthropic funders and leaders of social sector initiatives. Doug opened our panel by asking the audience: “How many of you would say an organization’s Talent is a top-three priority when considering whether to fund it?” Virtually every hand went up. Why, then, has leadership development historically represented a mere one percent of overall foundation giving? Today’s foundations are measuring and analyzing practically every aspect of their grantee programs in order to ensure that resources are being used to drive meaningful, efficient and timely impact. However, without the proper leaders in place, there is little chance that social sector organizations will ever realize their missions. Our panelists shared their unique experiences and perspectives:
  • Michael explained how he and the other leaders of Noble were able to deploy strategic, long-term, instructional and administrative leadership development programs that have enabled them to grow from one small school in 1999 to nearly 20 schools and over 1200 employees today.
  • Melinda pointed out how often she’s witnessed funders choosing to invest in tangible initiatives like strategic planning, yet how infrequently she’s seen social sector organizations find philanthropic support for proper talent planning that aligns to organizational goals.
  • Sarah highlighted OneGoal’s emphasis on “The Three P’s”: Process, Product and People. While OneGoal’s use of dashboards has helped them to drive significant gains on Process and Product, they only recognize true success when their People are happy and engaged.
On the panel, I discussed how organizations and their funders can decide whether to invest in a formal search to fill an open position or groom their next leaders from within through talent and leadership development.  I also contrasted my previous experience with talent recruitment in the financial sector to my current work in the social sector. Recruitment for social sector positions is far more challenging because of constraints like lower compensation, thinner human resources departments and a focus on double or triple bottom-line returns on investments in talent.  I went on to share my perspective that the people and organizations providing essential funding to the social sector are typically much more interested in funding projects that will directly and immediately impact the communities that are being served, as opposed to making longer-term investments in the infrastructures of the organizations that are serving these communities. I had some time to reflect after the panel had concluded. I thought about my classmates from my MBA program who sought out high paying positions after we graduated a decade ago. I made the decision to continue in the career that I had built to date within the executive search industry. There were many factors that led me to this decision, but chief among them was my belief that organizations are only as good as the talent that runs them. I still stand by that belief. This past week, along with the other folks on my panel, I had a chance to underscore a few ways that the social sector can think and act differently to elevate the great talent within it.