IN PARTNERSHIP WITH

H U M A N C A P I TA L S T R AT E G Y

Module 1
Readings
2 HRS
INTRODUCTION TO
H U M A N C A P I TA L S T R AT E G Y

Picture this. A business school student
founds a nonprofit to offer job training to
young Pakistanis. A team of entrepreneurs
starts a venture to build new homes for
families in Haiti. Two visionaries start a
company to bring affordable poultry to every
family in Ethiopia.
Although the media often celebrates the
“heropreneur” or the single founder who
builds a company or non-profit that changes
the world, we know that in the social impact
space, the most effective organizations are
not built by individual founders, but instead
by collaborative, high-performing teams that

+ACUMEN Human Capital Strategy

engage with the complex systems in which
What do these diverse leaders have in they operate. While individual leadership is
common? They all started with a bold and certainly important, social entrepreneurs
daunting dream to change the system and need to build an effective human capital
build something better. And they’ve all been strategy to ensure that they attract, recruit,
very intentional about attracting the right hire, retain, motivate, and develop the best
team to help them achieve impact and people to help them advance their social
scale. They haven’t gotten everything right impact missions and achieve financial
at every stage, but they’ve realized that to sustainability.
succeed in any
market—and
especially in
markets serving
the poor—
enterprises
need to invest in
building high-
power teams.
Their human
capital matters
at least as much
as the financial
capital they
raise.

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INTRODUCTION TO
H U M A N C A P I TA L S T R AT E G Y

In this course, you’ll follow nonprofit leaders

and social entrepreneurs to get a behind-
the-scenes look at how they’ve developed
effective human capital strategies across
diverse geographies, sectors, and stages of
growth. These leaders include:

+ACUMEN Human Capital Strategy

Alexandria
Lafci is a Sarah Farooq and Ali Siddiq are the

co-founder Program Manager and Operations Director

of New Story respectively at Amal Academy, a nonprofit

Charity, a based in Lahore, Pakistan. Amal Academy is

nonprofit a professional learning academy that helps

that went Pakistani youth develop skills and build

through the bridges to their career aspirations. Sarah and

prestigious Y Ali will share their advice and experiences

Combinator building the team behind this nonprofit.

accelerator in Silicon Valley. New Story

builds safe homes and transforms slums David Ellis is the CEO of

into thriving communities. Since starting Ethiochicken, Ethiopia’s

in 2015, they’ve funded the construction largest producer of day-

of over 750 homes in seven communities old chicks. This social

around the world. They were just named one enterprise produces

of Fast Company’s Most Innovative Not-for- fertile, disease-resistant

Profits. Alexandria will offer her perspectives chickens and sells them

on how an early stage non-profit can begin to smallholder farmers

to build a successful team and attract talent in Ethiopia through a unique and scalable

in the very competitive job market, and distribution model to help offer low-income

share how they’ve rebounded from earlier households a stable source of income.

mistakes to build a smarter hiring process.
David will offer his perspectives on how the
company has grown to span multiple offices
and business units, and built a strategy to
develop middle management talent from
within their own ranks.

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W H Y H U M A N C A P I TA L
I S I M P O R TA N T

The perspectives of these founders will be + A global study of 197 social

complemented by lessons that Acumen enterprises found that an
has learned from across its portfolio of overwhelming 78% do not have a
social enterprise investments. Acumen is a staff person dedicated to human
global impact investing fund and nonprofit resources.
organization. We invest in companies,
+ 63% of social enterprises do not
leaders, and ideas that are changing the

+ACUMEN Human Capital Strategy

appropriately budget or spend
way the world tackles poverty. We’ll share
time on recruiting efforts (Shell
our insights alongside research drawn
Foundation and Village Capital
from across the field of human resource
“Show Me What You Can Do”
management. Let’s get started.
Report).

Why Human Capital is Important

The fact that you signed up for this course After investing in social enterprises for

shows that you already know that investing more than 15 years, Acumen has learned

in human capital is important. You’re that the people who you hire to help build

ahead of the curve. Most early stage social your organization will be as critical to your

entrepreneurs and nonprofit leaders spend success as the money you raise. Developing

significant time figuring out how they will a strategy to attract, retain, and develop

raise funding to get their idea off the ground. the right cofounders and employees from
Yet they consistently undervalue and under the beginning can give an organization

prepare for their internal human capital significant competitive advantages (Harvard

needs. Business Review, “Maximizing Your Return

on People”). Your people are critical to your

+ 75% of funded, early-stage social organization’s ability to compete, innovate,

entrepreneurs say that the inability and achieve social impact.

to attract and retain talent critically

impacts their ability to scale You likely know that figuring out how

(RippleWorks “The Human Capital to structure an organization, foster a

Crisis: How Social Enterprises Can productive culture, and motivate your

Find The Talent To Scale”). employees may be some of the hardest work
you’ll need to do as a leader. This course will
be a starting point to help you tackle these
challenges.
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W H Y H U M A N C A P I TA L
I S I M P O R TA N T

This course has been designed to introduce + Recruiting, Hiring, and

you to the “building blocks” of a human Onboarding: Recruiting and
capital strategy, so that you know the key hiring new staff who align with
things to consider at each stage of your your values and can help take
organization’s growth. Obviously, building your organization to the next
a Talent and Human Resources function level. Onboarding these new
within an organization is a huge and staff so that they are prepared to

+ACUMEN Human Capital Strategy

complicated endeavor. This course will only effectively perform.
offer an introduction. It will serve as an
+ Compensation: Structuring
overview of what needs to be considered as
compensation for your employees
you build your organization’s current and
(including financial compensation
future human capital strategy. We’ll provide
and other types of incentives)
additional resources for each module for
so that they feel valued and
those who want to go deeper on any topic.
motivated.
Specifically, the elements of a human capital
strategy that this course will cover include: + Building Effective Teams,
Managing Performance, and

+ Culture and Values: Establishing Giving Feedback: Building

the key things that your social teams that are productive and

enterprises wants to stand for in collaborative, and that offer

the world, and that you want your appropriately candid feedback to

employees to embody every day. each other.

+ Organizational Structure + Learning and Development:

for Decision-making and Crafting a learning and

Communication: Developing development program to help your

your organizational structure employees gain new skills and

and planning for it to evolve competencies.

as you scale, so that you can

keep decision-making nimble
and internal channels of
communication productive.

5
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MINDSETS FOR AN EFFECTIVE
H U M A N C A P I TA L S T R AT E G Y

About This Course of these will be context-specific.

This course combines Acumen’s Therefore, we’ll offer some best
direct experience working with social practices and recommendations
entrepreneurs with a foundational from other organizations in this
curriculum developed by Broughton course, but you shouldn’t expect
Consulting for The Hitachi Foundation. to find templates that can be
We’ve also reviewed sources that focus exactly replicated. Part of effective

+ACUMEN Human Capital Strategy

on leadership development and talent management is learning how to
management for the nonprofit sector, calibrate your approach to meet
including important work done by the needs of your particular
Bridgespan. To ground all of these concepts market and your specific staff.
and ideas in reality, we’ve also interviewed
+ Keep in mind that you’ll need
founders and leaders from a range of social
to adapt your strategy as your
enterprises and nonprofits including New
organization grows or your
Story Charity, Amal Academy, Edubridge,
business changes, but it should
Labournet, Pagatech, and EthioChicken.
stay rooted in your organization’s
mission and core values. The
Key Mindsets for Developing an Effective
type of strategy you use to recruit
Human Capital Strategy
and retain people when your
Before we go any further, there are several
enterprise is very early stage will
things we think are essential for you to
likely need to change as your
keep in mind as you begin to plan your
company grows and roles become
human capital strategy. These mindset shifts
more specialized. Furthermore, if
will help you think about talent in your
your core business opportunities
organization more effectively.
start to shift, you may need to
attract people with different skills
+ First, there is no human capital
or experiences. Keep in mind that
strategy that will be one-size-
to remain relevant and useful,
fits-all and apply to every type of
your human capital strategy will
social enterprise or nonprofit. A
always be always be dynamic and
human capital strategy consists
evolving.
of multiple dimensions and many

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MINDSETS FOR AN EFFECTIVE
H U M A N C A P I TA L S T R AT E G Y

+ You’ll need to regularly keep a compete with the corporate

“pulse” on your organization to sector in terms of compensation.
ensure that your human capital However, they can attract people
strategy is aligning with the for other reasons—including
reality of your company and the because people are attracted to
environment in which it operates. their mission, values, and culture
In this course, we’ll show you of working for a social cause.

+ACUMEN Human Capital Strategy

some ideas of how you can make Building a multi-dimensional
sure you regularly check in with “talent value proposition” is
your employees to get a pulse on achievable for a social enterprises
the organizational health, and and nonprofits, but needs to be
identify places where your human approached with thought and
capital strategy might need to be care.
applied more intentionally.

+ Investing in a human capital REFLECTION

strategy does not always require Take a minute and consider this list. These
a lot of money, but it requires represent some of the key mindsets that we
time, intention, and consistency. think social sector leaders need to have as
Social enterprises and nonprofits they develop an effective human capital
are very infrequently able to strategy. Is there anything that surprises you
or that you would add to this list?

7
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DEVELOPING YOUR
O R G A N I Z AT I O N ’ S C U LT U R E
If you want to develop your human capital
strategy, where should you start? We
think the first thing you should focus on
is defining your organization’s core values
and establishing the culture that you want
your social enterprise to embody. Alfred Lin,
the former chairman of Zappos and now
a venture capitalist, uses this “formula”
to help startups think about their culture
(Adapted from Y Combinator’s Startup
School, Lecture 10):
Culture is the company’s core values that
play out in the form of the behaviors and
actions of team members as they pursue the
company’s mission every day.
He believes that articulating those 3
elements—core values, behaviors/actions,
and mission—is crucial to defining the
culture of your company. Why is this
important? Alfred likes to quote a passage
from Gandhi: “Your beliefs become your
thoughts. Your thoughts become your words.
Your words become your actions. Your
actions become your habits. Your habits
become your values. Your values become
your destiny.” So, in Alfred’s words, in order
for your organization to achieve its “destiny,”
it first needs to define its culture.
Culture is what people are describing when
they explain “how we do things around
here.” It is comprised of the beliefs, rules,
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rituals and stories—written and unwritten—
that shape how an organization collectively
behaves. Culture is “held” by each member
of an organization and is something that
they jointly create. Every new person that
you bring into an organization has the
ability to shape the culture—in either
+ACUMEN Human Capital Strategy
positive or unproductive ways. Culture
manifests itself through ongoing actions and
behaviors that reinforce this shared system
at all levels of the organization.
In the early stages of an organization,
culture is often heavily shaped by the
founder and his or her early hires. However,
as a nonprofit or social enterprise grows,
culture can take on a life of its own that is
shaped and influenced at all levels of the
organization. Although your values will
likely stay consistent, culture is something
that can shift and evolve. As a result, it’s
important that leaders develop ways to keep
a “pulse” on their organizational culture
so that they make sure it remains healthy
and productive. Intentionality is key here.
Some founders are very intentional about
creating a particular type of culture, such
as one where there is a lot of employee
participation. Others fail to consider the
culture, but it nevertheless develops and is
accordingly largely based on the founders’
personalities.
8
DEVELOPING YOUR
O R G A N I Z AT I O N ’ S C U LT U R E

Culture matters because it influences both
the internal morale and productivity of
your employees, but also is reflected in how
your organization interacts with external
stakeholders and shows up in the world.
Brian Chesky, a co-founder of Airbnb,
explains that:
cannot always compete with the corporate
sector in terms of financial compensation,
but they can offer a strong, values-driven
culture. If a strong culture is established
and nurtured appropriately, it can be one
element that sets your organization apart
from its peers.

+ACUMEN Human Capital Strategy

“Culture and brand are two sides Finally, getting culture right can also have
of the same coin. Culture is the business value and actually be critical to
principles and beliefs that you your nonprofit or company’s survival. From
have inside a company that the mid-1990s until 2002, Professor James
you want people to be aligned Baron studied the culture of several hundred
with. Whatever you have inside a Silicon Valley startups. He concluded that,
company eventually comes out. “It’s much easier to get the culture and HR
You can’t hold it in. And brand blueprint right from the beginning than to
is really the promise outside the go back and try to change it later. Those
company that everyone identifies companies established a strong and healthy
with. Having a clear mission and culture form the beginning had a better
making sure you know what chance of long-term survival.”
that mission is becomes critical
to establishing a strong culture So we’ve established that culture is critical
and a strong brand. Your brand not only to keeping your employees happy
evangelists are your employees. and productive, but can also have critical
So if you have a weak culture, you implications for your sustainability. Before
often have a weak brand.” you think about the tactics of recruiting and
hiring, you should have a clear vision of the
Your culture will affect how your employees kind of organization you’re seeking to create
interact with customers, donors, supporters and what you want it to stand for in the
and partners. It will also influence how world.
you attract new staff members or convince
others to join your team. As we mentioned
before, social enterprises and nonprofits

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DEVELOPING YOUR
O R G A N I Z AT I O N ’ S VA L U E S

Values are the standards that guide the

real decisions you make on the job every
day. They help to shape how your staff will
pursue your social enterprise’s mission.
They are the aspirational north stars for
the organization, helping to influence and
anchor choices.

+ACUMEN Human Capital Strategy

Like culture, values don’t develop by
accident; they have to be thoughtfully and
carefully chosen and pursued. Once you’ve
named them, then it becomes important
to communicate your organization’s core
values clearly and consistently both so that
your employees can make decisions aligned
with these values and so that others know
what your organization represents. Values
are both aspirational and grounding.

Read on for three case studies of how other

nonprofits and social enterprises developed
their values. Then, your assignment for this
module will be to start drafting organization
values of your own.
Case Study: Ethiochicken’s Values
Ethiochicken had been operating for
four years (under its previous name of
“Mekelle Farms”) before David and his
leadership team decided to sit down and
formally codify their values. “Naturally,
the organizational culture started as being
that of the founder,” David says, “Those
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behavioral or attitudinal attributes might be
great for a small team, but they’re not easy
to replicate for a large organization.”
David and his team settled upon six value’s
that felt right for the company’s stage of
growth. “We selected four values that we
thought represented us at that moment, and
two values that were more aspirational,”
David says, “Now, those values have become
a part of our everyday work. When I meet
with staff, I try to tell stories that reinforce
our values. We put them on the wall. And we
10
DEVELOPING YOUR
O R G A N I Z AT I O N ’ S VA L U E S

expect our managers to lead by example in Case Study: New Story Charity’s Values
embodying the values.” “We’ve been very intentional about defining
our organizational values,” Alexandria says,
The six values they came up with were: “Even when it was just the three of us co-
+ The Customer Comes First: “The founders, we outlined what we should value
needs of the customer should so that when we were hiring, we knew we
always be prioritized.” should be looking for those same qualities.”

+ACUMEN Human Capital Strategy

+ Discipline and Accountability: “We
To come up with their original values, the
say what we’re going to do, and
team tossed around a lot of ideas. The six
then we actually do it.”
that eventually stuck were:
+ Think Like An Owner: “We want
all our employees to be taking + Simplify
ownership for their decisions as if
+ Improve through Learning
their company was theirs.”
+ Express Gratitude and Empathy
+ Best Ideas Win: “We want the
best ideas—not the most senior + Think Big, Break Down, and
person—to win.” Execute

+ Strive for Excellence and Reject + Change Trajectories

Good Enough: “Keep standards
+ “Team of Founders”
high.”

• Our Purpose Drives Us: “Everybody

Alexandria explains that the final one—
who works here loves our mission;
“team of founders”—means that everyone
through the hardship, that has
in the organization should “own the vision
carried us through all phases of
and act in the capacity of the founder. We
the business.”
want people who are doers and have a
burning desire to make things happen, and
Later in this course, you’ll learn how then do it. We’re looking for people who take
Ethiochicken screens for these values in the ownership and have a proven track record of
prospective employees that they interview. results.”

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DEVELOPING YOUR
O R G A N I Z AT I O N ’ S VA L U E S
Initially, the team was so busy that they
didn’t have much time to think about how
to intentionally embed these values in
the context of their daily routines. But as
they began to hire new team members, the
founders quickly realized that emphasizing
them would be a key differentiator.
One of the most effective ways the team
brought their values to life was to create
a Slack channel specifically dedicated to
values shout-outs. “Every day on Slack,
people take a few minutes and call someone
out for embodying the organizational
values,” Alexandria explains, “For example,
I could say: ‘I saw Matthew sending out
thank you cards for meetings’ and add the
hashtags #gratitude and #empathy. These
shout-outs happen on a daily basis. And it
keeps the values top-of-mind for people.”
In future modules, you’ll also hear about the
specific interview questions that Alexandria
has developed to help her screen candidates
for how well they can embody, uphold, and
contribute to these values.
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Case Study: Acumen’s Values
At Acumen, we’ve decided to develop a
“Values in Tension” model—the image on the
next page.
Our founder, Jacqueline Novogratz, explains
the rationale behind this model:
+ACUMEN Human Capital Strategy
All enduring institutions – and people – must
hold contradictory thoughts to function effectively.
At Acumen, we recognize the same need in the
world and in our daily work. Indeed, our very
values reflect those contradictions.
Rather than create a list of single words or
short phrases that we see too often in corporate
settings, we decided to create pairs of values
that must live in opposition to one another. We
wanted to say out loud what we know to be true:
the work of creating change requires the moral
imagination and, at times, courage, to consider
trade-offs as we make the best decisions we
can. To be effective, we need to know how to be
both accountable and generous, when to listen
and when to lead, how to be audacious while
practicing humility. These opposing values all rest
on the foundation of respect and integrity, two
immutable values for the work we do, where the
absence of either undermines our very purpose.
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DEVELOPING YOUR
O R G A N I Z AT I O N ’ S VA L U E S
We aim to be leaders who are not simply looking
for a roadmap to follow, but are willing to
challenge the status quo, to understand the world
as it is, yet have the audacity and moral courage
to build the world that could be.
This framework enables us to be more proactive
and nuanced in designing and supporting the
right solutions for a messy world where the
poor especially have been left out of too many
opportunities. For example, it is easy to agree
that clean drinking water is a human right, but
what kinds of delivery systems would ensure
access to all while also insisting on efficiencies
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that allow us to use this scarce resource most
effectively? What kinds of approaches are both
scalable and sustainable? The same questions
must be asked for healthcare, education, energy,
agriculture, housing – indeed, all of the areas in
which we work.
+ACUMEN Human Capital Strategy
It isn’t always comfortable, but changing the
status quo never is. And in an increasingly
complex world, that means finding ways to
identify and balance values in tension as we work
together to create the future we dare to dream.
13
CASE STUDY:
A M A L A C A D E M Y ’ S VA L U E S

Amal Academy is an education venture + Giving 110%: “As an early stage

with a mission to empower marginalized enterprise, we need to have people
Pakistani youth to rediscover and realize who are not just focused on their
their professional dreams. Founded in own work, but also look around
2014, Amal Academy offers a Career-Prep and see what everyone needs help
Fellowship which is an intensive three- with,” Sarah says.
month business and leadership program

+ACUMEN Human Capital Strategy

that develops the soft business skills, values,
Amal Academy is still in the process of
and confidence of low-income youth. Their
formalizing these values, but Sarah knows
efforts currently focus on students from
that this is an important thing to invest time
rural backgrounds who have left their
in. She advises that as social enterprises
families to study in Lahore.
and nonprofits grow, it becomes increasingly
important to define values. As they move
“Amal is a very values-driven organization,”
forward, Sarah and her team plan to start
Sarah says, but they are still in the early
all meetings by articulating the values
stage of codifying these values. To do so,
and citing recent examples of when team
they ran an exercise where everyone came
members fulfilled them—so that they feel
together to brainstorm ideas for values that
like they live them each and every day.
team members shared in common. The 3
values that emerged from the process were:

+ Empathy: putting themselves into

the shoes of others, especially the
Fellows

+ Growth Mindset: the willingness

to keep learning from mistakes
and improving. “We want people
to try new things,” Sarah explains,
“We want them to be encouraged
and appreciated for these
experiments, even if they fail.”

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CULTURE FROM WITHIN
Y O U R O R G A N I Z AT I O N
How To: Get a Pulse on Culture from
Within Your Organization
Once you have established your values
and culture, you need to find ways to both
keep them alive within your organization
and check to see if they are being actively
maintained. One of the ways to measure the
healthiness of your values and culture, is to
implement a periodic “pulse survey” within
your organization.
If you are the founder of your company or
in a management position, you might have
some blind spots regarding your culture.
Your position of authority might make
employees less forthcoming about sharing
their honest assessments of the company
culture with you. They also might try to
hide less healthy elements of the culture,
including gossip or mistakes. Sometimes this
“covering up” is not malicious, but instead
arises when employees are trying to protect
each other or handle problems themselves.
So how do you get to the real diagnosis of
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how healthy and sustainable your culture
is? What are some indicators to look for and
instruments to use?
At Acumen, we use an organizational pulse
survey to assess the strength and health
of our culture and overall engagement of
+ACUMEN Human Capital Strategy
our team. By administering an anonymous
survey, we hear from all parts of the
organization and can then analyze results by
team, level, or regional office to understand
how individuals across the organization
are experiencing the culture differently or
unevenly.
The survey asks team members to reflect on
the organizational culture and rate how well
we are living up to our values. We also ask
for their feedback and practical suggestions
to improve the culture. As you start to
develop your own organizational values, you
might also find it helpful to brainstorm ways
you can monitor and assess them over time.
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CULTURE FROM INDIVIDUALS
L E AV I N G Y O U R O R G A N I Z AT I O N

How To: Get a Pulse on Culture from
Individuals Leaving Your Organization
To better understand your culture, you can
also conduct exit interviews with those
who are leaving the organization to collect
feedback and suggestions for improvement.
You can answer questions such as:
What other ideas have you seen effectively
implemented to assess the health of an
organization’s culture? How have you seen
leaders steer a deteriorating workplace
culture back on track? We’d love to hear
your thoughts in the discussion forums.

+ACUMEN Human Capital Strategy

Conclusion
+ What did you enjoy most? What Congratulations. You’ve made it through
aspects of our operating model the reading for Module 1. You should have
and culture do you believe most learned about the foundational importance
contribute to our success? of your organization’s value and culture.
In the workshop for this module, you’ll
+ Based on your experience, in
draft your organizational values and map
what areas do you think the
out how you expect them to be concretely
organization can improve to make
demonstrated in your organization.
us more effective?

+ Are there any team members

you would like to mention who
have been particularly helpful in
your onboarding, integration or
career development, or any team
members you believe have been
most effective in sharing and
carrying out our culture?

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