by Lenny Mendonca
The United States is experiencing a slow moving but inexorable crisis in public leadership. I'm not talking about Congressional dysfunction (although I could be), but about the chronic underinvestment in leadership in both the public and social sectors. Strong, seasoned, and impactful leadership is needed to solve our most urgent challenges: unequal access, preparing our kids for a 21st century world, improving public health, and mitigating climate change. Despite the essential call to navigate the demands of what lies before us, we overwhelming underinvest in supporting these leaders and yet expect them to deliver. They are set up to fail, and so are we all. This must change, and soon. And with the appropriate approach and scale, it can.
We've been here before. Coming out of World War II, the U.S. (via the Marshall Plan among other massive investments) played the leading role in rebuilding institutions destroyed in the war. The greatest generation was appropriately celebrated for their service during an incomparably challenging era. Despite major success, however, the business leaders who drove the renewal didn't have the skills to lead the new kind of global institutions that were emerging. Indeed, there hadn't been a need before this, and thus the bulk of any kind of business training available in the day were at best mediocre trade schools.
As I wrote with some former colleagues from McKinsey in the McKinsey Quarterly last year:
"In 1959, the Carnegie Corporation and the Ford Foundation issued reports that prompted a sea change in the development of business leaders. The reports reviewed the role of business schools, and they were deeply critical. They argued that standards within schools for hiring faculty, accepting students, and developing curricula were too low. They recommended schools adopt everything from an increased focus on quantitative research to directing faculty to consult less and teach more. Business schools had flourished after World War II as the demand by American industry for trained managers grew. The reports suggested that schools were not meeting the needs of employers and urged significant reform.
The nation's business schools responded with alacrity. Accrediting standards rose, and schools transformed to meet higher expectations. In 1949, only 50,000 U.S. managers had an MBA degree. That year, business schools graduated just over 3,000 MBA students into the workforce. Today, about 500,000 students earn an MBA each year worldwide, about 150,000 of them from U.S. schools."
We need an equivalent call to arms today in public leadership: the challenge in both the social and public sectors is enormous.
The scale of the public sector in the U.S. is vast. The federal, state, and local public sector accounts for an $88 billion payroll and 22 million employees according to the U.S. Census Bureau.
The social sector, while smaller, is growing rapidly and is of key importance in bringing forward the innovation we need to find solutions to our most challenging issues. More than one million U.S. non-profits are working to address the challenges of our time, accounting for nearly $837 billion in products and services, or 5.6 percent of GDP, according to the Urban Institute.
Sometimes referred to as the 4th sector, for-profit organizations that integrate social change within a business context add to these numbers and represent an expanding segment of the social sector overall. Many would argue that 21st century challenges are - given globalization and technological innovation - accelerating at a faster rate than at any other time in history.
And yet, we continue to seriously underinvest in our leaders. My former colleagues and I found that the private sector invests over $12 billion a year in training their leaders. That breaks down to $120 per employee every year. The social sector spends about 25 percent of that: $29 per employee annually. (In fact, the private sector spends more on coffee per employee annually than the social sector spends on employee development).
The scale of investment is at least an order of magnitude too low. Just as importantly, we need to reimagine how to spend what we do invest, now and going forward. Classroom learning is crucial, and we will need major investment in educational institutions to scale with the need. Even with the tens of thousands of MBA students annually in the U.S., shockingly less than 1-percent enroll in a dual-degree track where the demands are most pronounced.
The next generation of leaders will need to operate across sectors to achieve the change the world needs. Early programs like thePresidio Institute Fellows program are making important progress in amplifying the call for solutions and developing the means to provide them. The most successful programs are delivered in ways that reflect the way adults learn best – in the field and within forums. Classroom learning is directly linked to real work in the public sphere. Supporting participants to learn, apply, and share their learning, while building networks of collaborators all within a context of keeping their leadership roles at work, is the key combination we need to create change.
Future leaders are demanding programs that allow them the opportunity to participate in public service before they move on to other roles. Teach For America has nearly 50,000 graduates apply every year. Other post-graduate selective programs are joining them in showing the way. Code for America is placing technologists in state and local government; the U.S. Digital Service is doing the same for the federal government; and FUSE Corps had 800 applicants for 16 fellowships in California this year, a more selective ratio than Ivy League admission.
With clear interest from talented young leaders to serve, and early results from current programs offering great promise, the stage is set for a step function change in scale. We need today's philanthropic leaders to make the kind of bold moves the Carnegie Corporation and the Ford Foundation did a half century ago. We have the same opportunity to create a legacy of future leaders who will address the challenges of today's world. A new greatest generation is waiting.
Lenny Mendonca is a Senior Fellow at the Presidio Institute, the co-Founder and Chair of FUSE Corps, and a Director Emeritus at McKinsey and Company.