NGOs lack leaders to succeed current management: study
NGOs need to look within and groom talent to address crisis, says study
New Delhi: Leadership challenges are not restricted to the for-profit world. The social sector in India is not only grappling with recruitment and retention of leaders but also seems caught in a trap where lack of funding and irregular leadership assessment have led to over-dependence on founders.
This eventually negatively impacts plans to scale, and assessment of the true nature of social change.
Philanthropy advisory Bridgespan Group India, with support from Omidyar Network, has conducted a data-driven study: Building the Bench at Indian NGOs: Investing to fill the leadership development gap, for which it interviewed leaders from 203 Indian NGOs (non-governmental organizations), 41 international NGOs operating in India, and 50 stakeholders such as funders and capacity building organisations—to highlight how investing in leadership development can lead to better focus and results.
“We have two primary objectives for this study. The first is for NGOs to recognize that they should focus on developing leaders from within, instead of defaulting to external recruiting. The second is for funders to recognize just how deep and urgent these challenges are, and hopefully make them more accountable for implementing changes in the way they fund and support NGOs,” says Pritha Venkatachalam, lead author of the study to be released on Wednesday.
In selecting the Indian NGOs, Bridgespan worked with a fixed criteria, according to which organizations had to be headquartered in an Indian city with a population of more than a million, had to be at least three years old, employ at least five full-time staff, and not be a school, hospital or religious organization.
The report shows that about 20% of Indian civil society organizations (CSO) leaders and their direct reports surveyed were not confident that there was someone else who could effectively lead the organization in case they left. Of the rest, 33% did not have an answer while 48% (approx) believed their replacement could be found.
“Hence, less than half of Indian NGOs are confident there is someone to succeed the senior-most leaders. The reason for this lack of confidence is likely more related to the actual capabilities gap between the senior-most leaders and their next line. There is limited focus on developing senior leadership and giving them opportunities and exposure to a range of leadership roles,” explains Venkatachalam.
Ingrid Srinath, director, Centre for Social Impact and Philanthropy, Ashoka University, attributes this mindset to Indian CSOs being “personality driven with the CEO/founder as the key element when it comes to raising money and setting agenda. This is a handicap when it comes to building sustainable organizations. In the event of discontinuity of service by the leader, the impact is often severe and it takes years to recoup.
A noteable example in the Indian context is what happened to Child Rights and You (CRY) after the death of Rippan Kapur in 1994.
They struggled to fill the leadership slot for almost four years while the world moved on. That kind of vacuum can be avoided.”
Manas Satpathy, executive director of the non-profit Professional Assistance For Development Action (PRADAN), says that to avoid this founder-centric focus his organization has a fixed tenure for CEO roles and leadership is rotated.
“Founder/CEOs of NGOs rarely think about transfers or retiring. This can be limiting when it comes to evolving vision and scalability. Professionals within an organization must be given a chance to steer the vision too.”
Indian NGOs and their leadership are more focused on building organizational abilities of future leaders rather than on individual leadership competencies.
Almost half of the leaders surveyed indicated that more investment was needed for building organizational abilities in the next generation of leaders while 39% indicated the least investment was needed for enhancing technical/sector-specific competencies.
Venkatachalam explains that this could be because “people in senior positions in NGOs often are good at technical aspects of the job and sector knowledge, but have fewer opportunities to learn and develop strategic thinking, decision-making, and to change the management as well as other leadership skills required to guide the organization”.
The largest challenge to developing leadership skills is the lack of funding and of course a lack of regular assessment of leadership needs.
About 53% of NGO leaders say that their organization does not have the resources to allocate for leadership development programmes. About 50% of all NGOs with varying staff strengths admitted they did not formally assess their leadership needs regularly.
“The primary reason NGOs do not frequently assess leadership needs is that they do not know the value of doing so. Talent development activities can be perceived as time-consuming and/or expensive. Also, given that NGO leaders often fight multiple fires, organizational needs assessment gets de-prioritized,” says Venkatachalam.
Hence it comes as no surprise that 39% of CSOs find it difficult to recruit leaders when the need arises. After all, if an organization is not prepared to actively understand its leadership shortages, it will be difficult to either transition in-house talent to higher roles or find people from outside.
Besides, the report points out that while external hires have a high failure rate in the for-profit world, the problem is even more acute in not-for-profits.
“The person coming in from outside has a lot to learn. Many of them feel that the level of hard work in the non-profit is unexpected, and they are disappointed not to have less work pressure. Overall, NGOs are not as process-driven as companies and many who come from the outside are upset at this. Non-profits today should spend 30% of their time building processes and institutionalizing things so that they are ready for an outside leader. And anyone joining from outside the social sector has to be calm and willing to learn. Do not come in and keep referring to your previous job. You are here now, learn and deliver, and don’t put the new organization down,” says Bharati Chaturvedi, founder and director, Chintan Environmental Research and Action Group, a Delhi-based non-profit that works with waste management.
To deal with the funding shortage, Sathpathy and Srinath both suggest that boards and funders must be on the forefront of encouraging the incorporation of such programmes. “Leadership development is a strategic middle term goal. If funders take the onus of investing in capacity building and leadership programmes, they will help to create a stable eco-system in the social sector,” says Vandana Nadig Nair, founder director of Phicus Social Solutions, which works to strengthen social sector leaders.
Aside from this, the social sector has to let go of “starvation culture. NGO leaders and funders must understand that spending money on getting good talent is not wasteful or wrong. If NGOs have to become sustainable and scale up, this mindset has to change,” says Srinath. According to the report, 50% of current NGO leaders acknowledge that the biggest impediment to retaining and hiring talent is poor compensation packages.
“As founders and leaders we know that in-house leadership training is linked to scalability and sustainability because we feel the need for this the hardest. But often, we don’t know how to do it. We are excellent at our work but not all of us are good at managing. We have to get a lot of foundational work done before someone wants to invest their energy in us, and of course, we often cannot pay them the amounts they would like,” says Chaturvedi.
One solution that the report strongly advocates is that Indian NGOs should first look within and groom their own talent, given all of the constraints of recruiting externally. “These impediments include the costs of search (time and/or hiring external search firms), the limited talent pool which NGOs are competing over, the cost/time of on-boarding, and the unknown of whether these candidates will fit,” says Venkatachalam.
For the not-for-profit sector to play a far larger role in narrowing the social development deficit in India, prioritizing and investing in developing leaders needs to be a concerted effort from all sector stakeholders—NGO leaders, funders, and intermediaries.