Homegrown leaders: Why talent development is more crucial than ever, and what you can do about itBy Mary Bear Hughes, with Marc Schultz
Staff turnover is an issue for any organization, but especially for those in the nonprofit sector. That’s why, since we began, GCN has been equipping Georgia nonprofits with methods to find the best people, keep them productive and engaged, and craft sound plans around succession.
New research, conducted by The Bridgespan Group in partnership with GCN, shows that the situation is critical both nationwide and in Georgia.
For GCN’s first Nonprofit CEO Forum this spring, we partnered with Bridgespan to survey our members, and share the latest turnover trends with those best positioned to push back: executive directors. A group of 34 nonprofit CEOs spent the morning in conversation with Bridgespan Partner Kirk Kramer, GCN EVP Chris Allers, Camp Twin Lakes CEO Eric Robbins, myself, and each other, learning about the current state of sector turnover and a powerful, low-cost solution.
"When you first sit down with a team member and say, I want to develop your talent— that conversation alone can be a game-changer.”
“What was most surprising to Bridgespan about the research,” said Kramer, “was that almost half of the turnover in nonprofit professionals was initiated by the employee—that is, by people leaving the organization, either planned or unplanned.” The big question: Why are staffers leaving, and what can nonprofits do to retain talent?
“When asked why they left, the most-cited reason leaders provided was salary—not an area where most nonprofits can compete,” said Kramer. The good news, however, is that the promise of better compensation wasn’t important enough to lead these employees to the for-profit sector: Almost half found a position at another nonprofit, meaning they were still devoted to service despite the limits on compensation.
TURNOVER BY THE NUMBERS
The following results come from a Bridgespan survey of two nationwide samples, totaling 438 organizations, including 64 GCN member organizations. Georgia data aligns with national trends, with a few notable exceptions.
IN THE PAST TWO YEARS
2 out of 5
senior positions needed filling
of vacancies resulted from departure, either planned or unplanned
of vacancies resulted from promotion
of positions were filled by outside candidates
of nonprofits received NO funding for cultivating senior talent
IN THE NEXT TWO YEARS
1 to 2
senior positions will need filling, according to nonprofit expectations
of nonprofits expect a senior staff member to leave for reasons other than retirement (vs. 21% among GCN members)
of nonprofits expect to source their next hire from another nonprofit
of nonprofits expect to promote from within to fill vacancies (vs. 40% among GCN members)
THE OTHER REASON LEADERS LEAVE
Even better news came from the next-most cited reason: “professional growth,” which respondents ranked just behind salary. This motive represents a powerful opportunity for nonprofits, said Kramer: “With an understanding of how adults learn and grow, any organization can afford to provide staffers with a plan, and a process, for developing their individual careers—and, at the same time, overcome a crucial deficit in the organization’s talent pipeline.”
Bridgespan research shows that, at nonprofits of all sizes, only 30 percent of C-suite openings are filled by internal candidates. This is highly problematic: In addition to the time and money it takes to conduct a talent search, outside hires are a drain on productivity—taking two to nine times longer to get up to speed—and come with a much higher chance of failure—as much as 40 percent for C-suite hires.
Hiring internally means skipping those costs and minimizing risk, while at the same time slowing the “merry-go-round” of employee churn. By promoting from within, staff get to grow their careers without having to leave for another organization. Further, what’s required to ensure staff can meet the challenges of a new position is also exactly what they’re looking for from their jobs: learning, mentorship, and support. Though establishing a culture of professional development doesn’t come without effort and commitment, what it doesn’t require is much money, or even a dedicated professional to organize it. Speaking at the CEO Forum, Camp Twin Lakes CEO Eric Robbins affirmed that talent development “is something you can do with the time and the teams you already have.”
HOW EMPLOYEES DEVELOP: THE 70/20/10 PRINCIPLE
At Camp Twin Lakes (CTL), leadership development is now an intentional and measured process. Every person at the organization receives a customized development plan, co-created annually by employee and manager.
The first step is easy enough, but means plenty. “When you first sit down with a team member and say, I want to develop your talent—that conversation alone can be a game-changer,” said Robbins. Under discussion: that member’s leadership competencies and skills, where they see themselves in the coming years, and what kinds of challenges they find intriguing— the challenges already on their plate and the challenges that will prepare them for career advancement. “You want them to understand that this is an investment in their growth—whatever that means to the individual.”
With those factors in mind, team member and supervisor put together a plan based in the “70/20/10” approach to development:70 percent through experience, 20 percent through mentoring, and 10 percent through formal training. The Center for Creative Leadership formulated the 70/20/10 approach using their research into how adults learn best; you can see the principle at work in disciplines like athletics and musical performance, where daily practice— the experience component—plays such an outsized role.
That means the majority of professional development should come from on-the-job experience. Think of this in terms of “stretch” assignments: What responsibility could this individual take on to help them develop in an area of interest and meet the organization’s future leadership needs? For instance, said Robbins, one of his staffers wanted to better understand how major decisions are made: “Big decisions require a task group, something I would normally lead, so I delegated responsibility for the next task force to that individual.“
Many of these stretch assignments, said Robbins, are as simple as “changing up people’s responsibilities.” Another example: His program coordinators, who are expanding their utility by working with the facilities team and serving on the sustainability committee. Mentoring and coaching will make up 20 percent of the plan. “Mentoring is about hooking up with someone who can help you develop, but also help hold you accountable for meeting personal development goals,” said Robbins. The first people to consider for the mentor role are the organization’s managers and C-suite members (though not necessarily for the people they oversee), but mentors can truly be found anywhere. Having developed a relationship with Big Brothers Big Sisters of Metro Atlanta, said Robbins, he recognized an opportunity to set up his director of finance with their CFO. His COO, meanwhile, found a mentor in a retired camp director in Dallas, and his development director has joined a group of fundraising professionals. It’s important to remember, however, that the “mentor-mentee conversation should start with the employee—the mentee—not with you, the manager.”
The 70/20/10 approach to development is based on research into how adults learn best: 70 percent through experience, 20 percent through mentoring, and 10 percent through formal training.
Because formal training comprises only 10 percent of the formula, the financial cost of effective talent development shouldn’t be high. The real investment is in your commitment of time, but the return is immediate: Staff members are excited by the investment in their careers, and appreciate clarity regarding what it takes to advance in the organization. Senior leaders, for their part, can actually save some time by delegating work in the form of stretch assignments, and get excited themselves by seeing their reports take on challenges and grow—something we’ve witnessed at several nonprofits where GCN Consulting is helping design and implement talent development programs.
“The power of this approach is in integrating the three areas: experience, mentoring, and training,” said Kramer. “Sending someone to training won’t mean much without an on-the-job assignment to practice what they’ve learned, and a mentor to back up training with support and oversight.”
PRIMING YOUR TALENT PIPELINE
GCN and Bridgespan have developed a four-step approach to help nonprofits strengthen their leadership pipeline.
1. Identify the competencies needed for your organization’s future success.
Most nonprofits set annual performance goals for individuals based on job-related competencies, both common to all jobs (like teamwork) and specific to some (like donor relationship management). These are important, of course, but insufficient if you want to help people develop. For that, you also need to identify leadership competencies: the skills, capabilities, and experiences that make a leader successful in your particular organization. “This allows you to see where individuals have the most to gain, and what is most needed by the organization as a whole,” said Kramer.
2. Assess individuals against both goals and competencies.
Bridgespan adapted a simple but effective tool for this purpose, resulting in the Demonstrated Performance/Leadership Matrix used successfully by Camp Twin Lakes. Allowing leaders to look at individuals’ strengths and weaknesses in terms of their demonstrated job performance and demonstrated leadership competencies, it provides both the organization and the employee with a roadmap for development. Organizations can use information from these assessments to put together succession plans, both interim and longer-term, for C-suite positions and other key roles.
3. Co-create development plans.
Using the 70/20/10 approach, craft a plan with each employee to help them grow in two to three performance and leadership competencies, as identified by their Matrix assessment. Once you have development plans for everyone, you can use this information to see patterns of common need; there may be ways to use training or mentoring to reach many who need the same kind of development.
4. Track progress, learn, and improve.
“We encourage each organization to set goals for putting new talent development “Most likely, you’ll have to start by educating all staff about the 70/20/10 approach, and help them view stretch assignments as a way to grow, rather than ‘just more work.’”Leadership Matrix used successfully by Camp Twin Lakes. Allowing leaders to look processes in place,” said Kramer. Start simple, by focusing on activities: Making at individuals’ strengths and weaknesses in terms of their demonstrated job performance and demonstrated leadership competencies, it provides both the organization and the employee with a roadmap for development. Organizations can use information from these assessments to put together succession plans, both interim and longer-term, for C-suite positions and other key roles.sure all managers have leadership growth plans in place; meeting with individuals regularly to see how they are doing on their plans; tracking progress to see what is working and what isn’t. Learn and improve from there.
"Most likely, you’ll have to start by educating all staff about the 70/20/10 approach, and help them view stretch assignments as a way to grow, rather than ‘just more work.’”
THE HARDEST PART: CHANGING DAILY BEHAVIOR
Implementing, and regularly discussing, professional development plans for each staffer represents a significant culture shift, capable of producing big results for staffers and for the organization—but only if you keep those plans vital, by referring to them often and prioritizing the work they prescribe. Said Robbins, “We meet for an hour a week, at minimum, and often we bring these plans out to discuss them.”
Stretch assignments, said Kramer, are commonplace in nonprofits: “There is always too much to do and not enough resources.” But matching each person to the right task, based on a combination of development need and ability, requires a change in behavior. You may not know what those assignments are when you first start the process, but once the question is in mind, stretch opportunities will often present themselves in the course of broader organizational planning. Kramer also noted that, “most likely, you’ll have to start by educating all staff about the 70/20/10 approach, and help them view stretch assignments as a way to grow, rather than ‘just more work.’”
To find mentors and coaches, think outside the box, cast a wide net, and don’t forget the benefit gained by those on the mentor side of the relationship. “You’d be surprised at the appreciation people have in this sector for this kind of investment, even at top levels,” said Robbins. “Retired folks are especially great resources.”
The Camp Twin Lakes CEO also emphasized the importance of keeping performance reviews and professional development distinct: “Performance is about top-down requirements. Leadership development is about you telling me how you want to proceed.” He also reiterated the fact that each development plan is unique: “It’s not black-and-white, and it’s different for people at different levels.”
As for himself, Robbins has identified “driving innovation” as his own biggest challenge, and recently agreed to take on a mentoring role for someone outside his organization—both a direct result of CTL’s new investment in leadership development. “It’s helped staff a lot, especially younger staff just coming on, to see there’s a place for them to advance. We really want those working here to feel like it’s not just a job, it’s about their growth as professionals.”
To learn more from a decade of research into nonprofit turnover, check The Bridgespan Group's latest report, “The Nonprofit Leadership Development Deficit," published by the Stanford Social Innovation Review.
Mary Bear Hughes is a senior consultant with GCN’s Nonprofit Consulting Group. Marc Schultz is managing editor of NOW.