Every organization knows the pain and disruption caused by bad hiring decisions, or waiting for an employee to develop the necessary skills to excel in a position he or she is not a fit for. Make a bad hire and the manager, the team, and the organization will suffer, operating at less than their full potential due to marginal or toxic employees. On the other hand, great hires are self-driven to deliver, grow, and execute in a way that brings people and organizations together.
I work for iDE, a nonprofit organization that has been implementing market-based development programs for over 30 years. iDE is sometimes approached to provide technical support on water, sanitation, and hygiene (WASH) market development for other organizations. One of the biggest challenges we’ve discovered in doing so is that these organizations are staffed with health and engineering experts who are knowledgeable in their technical fields but lack a solid understanding of how markets and businesses operate. Although business is not rocket science, it is difficult to discuss marketing matters in depth without, for example, shared language around profit, risk, and competition. When it comes to successfully managing a sanitation marketing program, hiring business-savvy program leadership is critical.
This basic belief informs iDE’s hiring choices — over 80 percent of the executive leadership in iDE’s WASH programs have a business and/or economics background, with the rest from more technical WASH and international development backgrounds such as engineering, agronomy, and water resource management. In iDE’s experience it has been much easier and faster to train business-savvy staff on the technical aspects of WASH, than to coach staff from traditional development or charitable backgrounds to understand businesses and markets.
The costs of hiring the wrong people
80 percent of turnover is caused by bad hiring decisions. (Harvard Business Review estimates)
Replacing an employee costs between one-third and five times the employee’s salary. (US Department of Labor and Statistics and the Society for Human Resources Management estimate)
Managers spend time coaching employees who are a bad fit for their positions, taking time away from providing technical leadership to their team.
It’s difficult, if not impossible, to achieve profound results with the wrong team in place. But if we truly want to drive progress towards the U.N.’s goal to “ensure access to clean water and sanitation for all” (U.N. Sustainable Development Goal #6), I believe these four things should be considered by any organization working in WASH:
Invest in recruiting talent with business acumen.
Identify and develop business leadership skills.
Incentivize potential leaders competitively, taking into account the opportunity cost candidates face forgoing potentially lucrative private sector positions, and not just the prevailing wages of the nonprofit labor market.
Incubate and foster an organizational focus on training and knowledge sharing.
Jess MacArthur and her colleagues visit RFL, the plastics manufacturer of the SaTo pan in Bangladesh.
Investing in business thinking
WASH problems do not exist in a vacuum but are part of complex market systems, with customers who desire beautiful products for the lowest price, manufacturers who want a large demand with a significant profit margin to justify new product lines, and distributors who connect the two. Traditionally, WASH development interventions have only addressed one of three aspects of the WASH problem: technical, social, or economic. If the problem is perceived to be technical, engineers create a technical solution; if the problem is social, psychologists, sociologists, and anthropologists identify behavior change triggers; if the problem is economic, economists develop more efficient systems of resource allocation.
iDE believes that all three aspects must be addressed to achieve a sustainable solution. Solving only one part of the problem may work in the short term (i.e., the project’s period of performance), but may break down in the absence of an ecosystem of drivers. If an organization is serious about being market-based, it also needs to make serious investments in market-savvy people.
Too many organizations make hiring decisions in the context of the nonprofit sector alone, ignoring the broader pool of talent that could be attracted with offers that compete with the for-profit sector. In one of the most popular TED talks on social innovation, Dan Pallotta calls out five types of discrimination that society places on nonprofits as compared with the for-profit sector, the first being compensation:
“In the for-profit sector, the more value you produce, the more money you can make. But we don’t like nonprofits to use money to incentivize people to produce more in social service. We have a visceral reaction to the idea that anyone would make very much money helping other people. Interestingly, we don’t have a visceral reaction to the notion that people would make a lot of money not helping other people. You know, you want to make 50 million dollars selling violent video games to kids, go for it. We’ll put you on the cover of Wired magazine. But you want to make half a million dollars trying to cure kids of malaria, and you’re considered a parasite yourself.”
-Dan Pallotta, 2013, “The way we think about charity is dead wrong,” TED Talk transcript. Accessed Feb 2016.
To solve some of the most intractable problems of the world, development organizations cannot afford to not attract the best and the brightest. Being able to compete in the broader labor market is even more salient in the social enterprise space. Here, CEOs are expected to have all the skills and talent needed to run a business and live up to expectations of profitability (arguably in less marketable spaces and shorter time frames) without the incentives of a typical start-up environment, namely equity. This scenario, argues Eikenberry and Kluver, becomes a barrier to hiring talented people, as the opportunity for potential leaders to financially gain from business successes is limited. (EIKENBERRY, Angela and KLUVER, Jodie D. 2004 “The Marketization of the Nonprofit Sector: Civil Society at Risk?” Public Administration Review Volume 64, Issue 2, pp. 132–140.)
If equity is not an option, organizations should consider subsidizing professional development, in recognition of the wider financial and non-financial benefits that would accrue on the rest of the organization from investing in high potential individuals. Other non-equity compensation schemes include results-based incentives, which can help attract people who excel in business to be interested in social entrepreneurship.
Building a pipeline of future leaders
Understand leadership versus management
Leadership in WASH has become a recurring theme in the sector, evidenced by its increase in prompting many discussions, conference presentations, and conversations among practitioners. The theme of leadership was a major topic at the 2016 WEDC Conference, and there are countless blog posts similar to things like, “Are you a water manager or leader?” (Andre Taylor, “Are you a water manager or leader?” International Water Centre. Accessed Aug 2016.) However, leadership should not be confused with management, and hiring leaders requires an understanding of their mindsets
Psychologist Carol Dweck studies implicit theories of intelligence, and has argued that people fall on a continuum according to their beliefs about where their ability comes from. A “fixed mindset” assumes that our character, intelligence, and creative ability are static givens that we cannot change in any meaningful way; success is the affirmation of that inherent intelligence. A “growth mindset,” on the other hand, thrives on challenge and sees failure not as evidence of unintelligence but as a springboard for growth.
“A “growth mindset” creates a passion for learning rather than a hunger for approval. Its hallmark is the conviction that human qualities like intelligence and creativity, and even relational capacities like love and friendship, can be cultivated through effort and practice. Not only are people with this mindset not discouraged by failure, but they do not actually see themselves as failing in those situations — they see themselves as learning.”
-Carol Dweck, 2006, Mindset: The New Psychology of Success New York: Random House.
This framework is helpful in understanding the types of people that are best suited to an organization’s culture and the objectives it seeks to achieve. Organizations interested in making quantum leaps in progress need employees who can embrace failure as part of the innovation and growth process. To make failure productive, a “growth mindset” is more conducive for exploiting learning opportunities. In contrast, a “fixed mindset” might be more appropriate for positions primarily focused on refining and perfecting metrics of a fixed standard.
This difference in “fixed” or “growth” mindsets is another dimension of how an organization understands the difference between managers and leaders. Marketing guru Seth Godin argues that the two are acutely different. He says:
“There’s practical everyday management, and then there’s leadership. Leadership is not practical, and it’s not everyday. You think you’re being a leader, but you’re probably being a manager… Managers try to get people to do what they did yesterday, but a little faster, a little cheaper, with fewer defects… What’s not happening is leadership… Leadership means embracing the failure of your people if it leads to growth… Managers want authority. Leaders take responsibility. We need both. But we have to be careful not to confuse them.”
-Seth Godin, 2013, “Seth Godin on the Difference Between Leadership and Management.” Accessed Aug 2016
Against the two frameworks of “growth vs. fixed” and “leadership vs. management,” the WASH sector has consistently invested in managers, but should make more deliberate investments in the growth of leaders to maximize the potential for transformational impact.
Identify high-potential leaders and create growth opportunities
Organizations in the WASH sector should be actively on the lookout for potential leaders, deliberately creating opportunities to “fast-track” their growth by exposing them to situations in which they can gain the necessary experience and credibility to lead their own teams. Working in development contexts is often characterized by patriarchal social dynamics, so the WASH sector needs to pay particular attention to creating an enabling environment for rising women leaders, local and international. Donors often recommend gender equitable staffing, but the reality of the field is that it is difficult to hire women to work in a mixed-gender environment in some cultures and that women rarely even apply for top leadership positions. Even for those positions that are culturally appropriate gender-wise (such as translation), women may still need their husband’s explicit permission to stay overnight, making travel across far distances more difficult. Fostering an environment where gender, age, and cultural dynamics are taken into account will be critical to the success of any leadership development efforts.
Institutionalize ongoing professional development
One of the key factors of iDE’s success in the Cambodia sanitation marketing program has to do with the professional development structure surrounding staff at all levels. With support from sales consultancy Whitten & Roy Partnership (WRP), iDE developed a multi-tiered cascading coaching structure, where staff at every level receive weekly coaching from their supervisor. Unlike an annual training workshop, this coaching structure allows the individual to receive real-time feedback and a consistent touch point for focusing on growth areas. Using simple frameworks, WRP has also provided iDE with depersonalized language to discuss challenge areas that may otherwise go undiscussed until too late.
Incentives as a tool to unleash creativity and ownership
In addition to incentives for top level executives, iDE has used financial incentives to influence staff behavior down to the field level, especially those in sales-driven roles. With the right training and coaching support, incentives motivate employees to take ownership and increase their creativity in problem solving. Instead of having activities micromanaged, staff are given targets to hit, and also the (relative) freedom to figure out how to hit them. When structured appropriately, iDE’s experience has demonstrated that incentives drive ownership, creativity, and results.
Keeping leaders engaged
Make time for “Make Time”
Featured as one of the top 10 leadership stories of 2015 in FastCo was an email that a Google employee sent to the rest of his colleagues about time management. In this email, Jeremiah Dillon posed a simple time management challenge to his colleagues: to schedule and respect Make Time. He wrote
“Stop. Breathe. Now, think about how you’re managing your time. Speaking for myself, I have some room for improvement. It’s been said there are two paradigms to scheduling — the manager and the maker. The manager’s day is cut into 30-minute intervals, and they change what they’re doing every half hour. Sorta like Tetris — shifting blocks around and filling spaces. The maker’s day is different. They need to make, to create, to build. But, before that, they need to think. The most effective way for them to use time is in half-day or full-day blocks. Even a single 30-minute meeting in the middle of “Make Time” can be disruptive. We all need to be makers.”
-Jeremiah Dillon, 2015, “The better time management strategy this Googler taught his coworkers,” Fast Company. Accessed Feb 2016
In our capacity as leaders (versus managers), we have the responsibility to make and create, and not just to optimize or troubleshoot. To do so effectively, there needs to be dedicated time for immersion in thought, experimentation, and tinkering. To create strategic vision, there needs to be space freed from daily operational concerns. Beyond embedding a culture of effective time management, organizations should also create opportunities for leaders to come together and reflect. At the country, portfolio, and global level, iDE holds workshops and retreats dedicated to having shared moments of reflection and creation.
Knowledge management for a collaborative leadership culture
Leadership, at moments, can be solitary, especially in organizations that fall into silos. To maximize learning, minimize repeated mistakes, and build a strong culture of collaboration and camaraderie, iDE has invested in knowledge management as part of culture building. Knowledge management is a dedicated role on iDE’s Global WASH team, and one of the main goals of the knowledge management department is to facilitate peer learning relationships among WASH leaders themselves. A WASH Program Director in Africa can relate to similar challenges of running a WASH program in Asia.
However, efforts to create peer-to-peer connections and knowledge sharing are not limited to the “leaders.” In fact, knowledge management has succeeded when the culture of sharing and collaborating permeates every layer of the organization across different departments and geographies. Leaders who actively engage in learning from their peers and sharing their experience with others are much more likely to set examples for their staff, and find ways to support their staff in similar engagements.
Recommendation Summary
A critical part of achieving the ambitious Sustainable Development Goals from the U.N. will be to invest in developing and nurturing transformative leaders. Informed by the latest research on leadership and organizational experience, I recommend four key priority focus areas for leadership development:
Hire the best and the brightest, and invest in market-savvy people.
Invest in long-term growth through ongoing professional development and deliberately create opportunities to fast-track emerging leadership.
Provide incentives that reward innovation and motivate leaders to take risks.
Foster an environment that allows staff to reflect and learn; respect Make Time; and invest in collaborative knowledge management