Five Types of Nonprofits and Their Unique Talent Challenges
In reflecting on the diversity of the nonprofits we’ve worked with this year, a question came to mind: "How do human capital challenges most frequently vary by organization type, and what solutions address those challenges?" Our experience with a wide range of nonprofits from 30 to 3,000 employees helped inform our perspective on this question. Here are a few of the similarities that we’ve noticed and how we’ve seen these organizations adapt key human capital management tools to address their challenges.
1. National Organizations
For organizations that span a range of geographies, it can be challenging to take local context into account while still maintaining a shared culture. For example, hiring and management practices in different areas and team cultures may vary tremendously. These organizations need to develop strong communication channels and clear decision-making processes to ensure that local managers are empowered to make appropriate decisions that are aligned with the organization’s broader goals.
An organization found that its national staff were often “putting out fires” at the regional level, which prevented them from focusing on the organization’s broader needs and long-range planning. To ensure that regional leaders were better able to address their own challenges, the organization both built the leadership capabilities of existing regional leaders and revamped their talent acquisition process so that regional offices were not recruiting and selecting based on fit for the immediate role, but looking for candidates with high potential to take over leadership roles in the future.
2. Multi-Division Organizations
These organizations face the challenge of maintaining culture and consistency across multiple business units. Senior leadership needs to avoid getting bogged down in troubleshooting at the divisional level and instead focus on the overall organization’s health and growth, including the need to clarify holistic organizational goals and then cascade them down to the divisional level. To enable this focus, the organization needs strong leadership at the division level. It is often difficult to find strong external candidates who possess the required levels of programmatic expertise and management experience. These organizations thus need to be forward-thinking in their hiring and leadership development. Even at the junior level, they need to hire candidates with high potential and strong leadership competencies, who can be developed over time to meet the organization’s future needs.
One large organization we worked with, which has affiliates across the country, found that affiliate priorities were not always aligned with organizational priorities. As a result, staff often did not know how their work supported broader organizational goals. Among other approaches, this organization created a balanced scorecard that set clearer goals, objectives and measures and provided a base from which to align and cascade goals. It also strengthened its internal communications by establishing a better feedback loop from affiliates to the national office and instituting tools to promote information flow, such as network-wide calls.
3. Foundations and Intermediary Organizations
Organizations that devote themselves to building the capacity of other organizations especially need to ensure that their own internal team members are well-supported to reach their goals. Many foundations have not previously been focused on ongoing coaching and performance management of their staff, but are increasingly realizing the importance of these efforts. In order to meet the changing needs of the sector, foundations and other intermediaries need to develop a more performance-oriented culture and support their own staff in setting and reaching performance goals.
One well-established foundation found that as the need for funding increased, the foundation needed to become more impact-oriented in managing its resources. This meant that the foundation needed to emphasize high performance not just for its grantees, but internally as well. Under the leadership of a new CEO, it developed a more performance-oriented internal culture. A senior leader of the organization said: “We’re not just saying expectations are higher, we’re demonstrating it.”
4. Charter Schools
Charter schools are typically data-oriented and have effective performance management mechanisms in place for teachers. They understand what competencies lead to success for teachers and are adept at hiring, managing, developing and evaluating teachers. Many charter schools have not yet, however, taken the robust performance processes they use for teachers and applied them to other roles in the organization such as executives and central office staff. For these organizations, it is important to expand their vision and application of performance management to the broader organization.
One of the several charter school networks with which AchieveMission worked this year wanted to ensure that performance management for its executives and central office staff was as strong as what they used to coach, develop and evaluate their teachers. They clarified competencies needed for these roles and performance expectations. To support these standards, they instituted stronger coaching and feedback mechanisms for these roles as well as semi-annual talent reviews, in which supervisors shared their evaluations of the performance and potential of their direct reports and used these assessments to inform broader talent pipeline planning for the organization as well as individual development needs.
5. Human Services Agencies
Agencies that are leaders in their field do not simply define their goals as the sum of their programs and government contracts. Instead, they set goals that are aligned with the organization’s overall mission and strategy. This strategic focus means that the agency needs to break down organizational silos and elevate an understanding of the organization’s mission. These agencies need to build their internal communications, address organization-wide culture and align goals from the agency level down to the department and individual levels.
A large agency, under new leadership, was integrating historically silo-structured programs under a unifying core purpose and vision. To accomplish this goal, the agency focused on building a culture of shared goals and collaboration, as well as revamping its goal-setting at the organizational and program level.
These are only a few examples of the types of human capital challenges faced by a variety of different organizations. As you can see, there are common themes of leadership development, performance management, internal communications and organizational culture at work across many groups. Sharing organizational insights and strategic solutions across the sector are helpful for disseminating best practices and stimulating leadership thinking, but cookie-cutter solutions are rarely appropriate.
Human capital processes need to be tailored to address an organization’s unique challenges, opportunities, leadership, and strategic goals. Just because one approach works within a given organization does not mean that it will be an appropriate solution for another.
What challenges have you observed in organizations you know? How do they relate to the ones we’ve described here, and how were they addressed? We’d love to hear your thoughts!