Human talent has become a bottleneck and impediment to impact investing’s growth, argues Paul Breloff, Yale Law School alumni, former Managing Director of the Accion Venture Lab, and now CEO of Shortlist, who helps source and screen high-performing talent in emerging markets.
A number of factors, Mr. Breloff explains, could explain the issue (paraphrased):
Why? Read More- No owner: Most funders are issue- or sector-specific, and talent who belongs to neither often slips through the cracks.
- No comfort zone: Most impact investors come from financial backgrounds and are more comfortable talking money than people.
- No easy answers: Structural issues like local education systems and globalization; individual differences in personality, circumstances and abilities; firm-level differences in organizational context and culture resist easy fixes.
- No success stories: There hasn’t been human capital poster children yet but impact-oriented talent players like RippleWorks, Omidyar Network’s human capital team, African Leadership Network, Spire, and Breloff’s own company Shortlist can start to change this.
- No convening body: Lack of centralized talent network focusing on entrepreneurs, and impact investor communities.
Opportunities to Action
“We need more pioneering investors to see this as an area of great opportunity.
Omidyar Network has been a leader here, setting up an in-house “human capital” team to help their investees attract, develop and retain top talent – but I’m not aware of other impact investors who have shown such commitment.
Organizations like Argidius Foundation, Blue Haven Initiative and AHL Venture Partners (all funders of ours) have made human capital a focus area, but they are the exceptions (unless the broad bucket of “education” or “edtech” counts).
At Shortlist, we just went through a fundraising process and heard a similar refrain from many impact investors: “Human capital is not within scope or is not a mandate fit,” or “human capital only counts as ‘impact’ if focused on people making less than $2 a day.” I’m hoping more investors and funders start to see this as an important issue with the promise of system-level impact, up and down the salary scale.
Even for investors who don’t start investing in human capital companies, I hope they can focus more actively on human capital issues within portfolio companies. When making an investment, go deeper than assessing the co-founder biographies: Spend time understanding the organizational structure, staffing plans, recruitment strategies, training programs and the company’s values.
I’ve seen impact investors spend weeks digging through financial models, formation documents and board minutes, but not ask a single question about the culture and sub-C-suite team.
If investors cared more about people, so would entrepreneurs – you can help entrepreneurs prioritize people just by asking about them.
We also have an opportunity to learn from mainstream global trends around the future of work and the evolving higher education landscape. It’s a heady time with many calling for the unbundling and disruption of higher education, the digitization of economic opportunity, and new tools to help companies find, recruit, manage and train talent. Let’s learn from the best and bring these new practices and technologies into our markets and investments.”
About Shortlist
After helping businesses launch in Kenya and other emerging markets for 12 years, Paul Breloff co-founded Shortlist after he saw that there was little to no way for companies to acquire the talent to help propel those same firms to growth.
The company has been operating in Kenya for about a year. Read a short profile of Shortlist and Paul Breloff at TheFounder.
Sources: NextBillion, Shortlist, TheFounder
