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Human Capital

Human capital is possibly the single most critical component of a nonprofit organization. Without it, no mission can be pursued, no theory of change can be implemented, and no resources can be deployed.

In pressured times, nonprofit leaders must examine their goals and assess whether they have the people in place who can lead the organization in the future. Nearly one year into a global pandemic, the way people work has changed dramatically—and continues to evolve as the COVID-19 crisis goes on. Leaders at all levels are being asked to do things differently. But how are their organizations preparing them and their employees for these new demands?

Too often, senior leadership postpones the work of defining the critical capabilities needed to fulfill your organization's mission three years out. By asking the following key questions, a leadership team can explore what it might take to successfully lead the organization and determine how best to assess and build the current staff's leadership potential.

• What will be the organization's strategic priorities during the next three-year window?

• What organizational capabilities will be required to achieve those priorities?

• Which leadership roles directly link to solving problems or implementing actions necessary to achieve those priorities?

• What skills and competencies are critical for these roles?

Once you have mapped out your organization's future leadership needs, you're ready to candidly consider whether members of the staff have the potential to move into leadership roles. Conversations about leadership potential aren't the same as performance reviews, focusing on past activities. Assessing leadership potential begins with evaluating the employee's performance in his or her current role and then considers whether the employee is likely to succeed in a more significant role.

A staff development plan needs to be put in place. Matching the identified required skill sets with staff with the potential to move into critical leadership positions in a few years' time is the first part of the plan. Providing training and mentoring for them to develop these competencies and meet development goals is the second part. The third part is to ensure that you are hiring people with the potential to fill the remaining competencies.

In times of transition and economic downturn, you will need to reverse the process. When planning to trim, first make sure you keep people who have the required leadership skills to meet the mission. Second, keep the people who have the potential of meeting mission in the near future.

Holding on to the principle of identifying critical needed capabilities will not only allow you to survive the current economic threat but build capacity to seize the opportunities that come when the recession is over.

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