Boston, MA -- (ReleaseWire) -- 03/09/2006 --With nonprofit organizations increasingly doing the work required to fulfill our desire for a civil, compassionate, and well-functioning society, the ability to attract, recruit, and retain qualified leadership is a key variable in realizing their missions. Many organizations already struggle to do so, but the problem is likely to become more acute over the next decade.
In a new study issued today by The Bridgespan Group, a nonprofit organization applying leading-edge management strategies, tools and talent to help other nonprofits and foundations achieve greater social impact, author Thomas J. Tierney predicts that organizations will need to attract and develop some 640,000 new leaders over the next decade—the equivalent of 2.4 times the number currently employed. This translates to as many as 80,000 new senior leaders per year.
In a plenary speech before the Grantmakers for Effective Organizations at their national conference, Tierney, Chair and Co-founder of the Bridgespan Group, noted that “the amount of social impact a nonprofit organization delivers is primarily dependent upon the capability and performance of the people in that organization … results are a ‘who thing’ … no principle is more fundamental.” He called upon grantmakers to “aggressively address [the challenge of recruiting and retaining leaders lest] the effectiveness of nonprofit organizations decline, undermining the social results expected from grants.”
According to the white paper, “The Nonprofit Sector’s Leadership Deficit,” the prediction is actually a conservative estimate. If the sector were to experience significant consolidation and lower-than-forecast turnover rates, the number of leaders required might fall as low as 330,000. On the other hand, given historic trends, the total need could well increase to more than one million new senior leaders.
Bridgespan’s study addresses only the needs of organizations with revenues of more than $250,000, and does not include major health care organizations or institutions of higher learning, which have fairly well-established infrastructures for developing and recruiting new leaders, including access to national executive search firms. According to Tierney, the leadership deficit is aggravated by the sector’s overall lack of intermediaries to help in recruiting and developing managers. The sector also lacks robust management-education and significant executive-search capabilities.
The reasons for the deficit are complex, and the solutions will require cooperation and collaboration among organizations, boards, funders, donors, and government, said Tierney. Sector growth, the substantial number of baby boomers expected to retire over the next decade, and the lack of internal resources to develop leaders are all contributing factors, as is the lack of career mobility for current leaders. The growing need for new functional expertise, particularly in finance, operations and marketing, also plays a significant role and will continue to do so.
The paper proposes that all concerned explore opportunities to
• Invest in leadership capacity. Nonprofits must invest in building skilled management teams—even if that means directing a greater proportion of funding to overhead. Philanthropy must deliver the operating support required, and boards must reinforce the importance of building management capacity and quality.
• Refine management rewards to retain and attract top talent. Organizations must structure more competitive management packages, particularly in light of the push to hold managers to higher performance standards, and boards must support these efforts. “No business looking to deliver strong results would intentionally under-invest in the leadership team accountable for delivering those results.”
• Expand recruiting horizons and foster individual career mobility. Recruitment efforts should expand to new pools of potential leadership talent, including baby-boomers who wish to continue working, mid-life career changers seeking greater social impact, and the young. At the same time, the sector will need to strengthen and expand its mechanisms for attracting and developing managers and enabling talent to flow freely throughout the sector. This is especially important for enhancing the diversity of the leadership pool.
Fourteen nonprofit and business leaders offered perspectives on the Leadership Deficit in a set of commentaries appended to the paper. Jim Collins, author of “Good to Great” and the new monograph “Good to Great and the Social Sectors,” suggests that “the number one constraint on effective growth of the nonprofit sector is not funding and other support, but the ability to attract, retain and develop enough of the right leaders.” Kathleen P. Enright, Executive Director of Grantmakers for Effective Organizations, calls for philanthropic investments that are “Collective … continuous … [and] contextual,” noting that foundation interest in and support for leadership development is growing. Jon Schnur, CEO and Co-founder of New Leaders for New Schools, offers a wide range of action items to address the deficit, including a fellowship program to recruit and train new leaders and managers for social enterprises and the creation of a $500 million foundation dedicated to helping the “top, scalable nonprofits attract, train and retain top executives.”
“Bridgespan hopes that this paper will focus more attention on the crucial issue of leadership in the sector,” said Jeffrey L. Bradach, Bridgespan Group Managing Partner and Co-founder. “As we ask nonprofits to do more, we need to support the development of current leaders in the field and find ways to attract more leaders into the sector. Addressing many of society's most critical issues—such as housing, homelessness, global warming, education—depends on the work of nonprofit organizations, but without a focus on leadership their ability to be effective is limited."
“The Nonprofit Sector’s Leadership Deficit,” including the 14 commentaries and the financial model, can be found at http://www.bridgespangroup.org/kno_articles_leadershipdeficit.html and at www.leadershipdeficit.org.
The Bridgespan Group (www.bridgespan.org) is a nonprofit, 501(c)(3) organization applying leading-edge management strategies, tools and talent to help other nonprofits and foundations achieve greater social impact. Established in 2000 and incubated at Bain & Company, Bridgespan works to build a better world by strengthening the ability of nonprofit organizations to achieve breakthrough results through three main activities: strategy consulting; knowledge-sharing; and talent-matching, through its Bridgestar initiative.