Broaden the talent pool and cultivate an “impact mindset” as a competitive advantage
Our Director of Social Investments, Caroline Bressan, was featured in ImpactAlpha where she shares three priorities for talent development in the impact investing space so that we collectively move towards a fairer market.
Open Road Alliance’s Caroline Bressan: Flip investor-investee power dynamics
I believe we as a sector are at an inflection point. There is an enormous opportunity and as industry practitioners we have the imperative to do it right. As someone who has spent my whole career in impact investing, I see three things to watch in terms of talent development for the sector: (1) Avoid formulas for recruiting, (2) Increase our focus on talent pipelines from investees and end-users and (3) Diversity, equity and inclusion.
Avoid formulas for recruiting. I’m asked time and again from current MBAs, “how do I get into impact investing?” Many seem to believe investment banking is a necessary stop in the formula to getting an impact investing job. However, I’ve often seen ex-investment bankers go through a hard transition into the world of social finance because their skillset is not as analogous as they expected. We don’t do business the same way as Wall Street for a reason – we’re trying to come up with a more compassionate and sustainable form of capitalism. At Open Road for example, compassion and humility are equally essential traits of our team as analytical problem solving. We should be pulling in talent from a more diverse set of sectors and geographies to generate the “outcome” of a fairer form of capitalism, instead of the “output” of simply moving more money.
Find impact’s operator-investors. Where we go next in large part depends on who we are listening to for directions. In impact investing, the proverbial navigator’s chair is too often occupied by capital holders and fund managers rather than the entrepreneurs and ultimate customers where the capital is being absorbed. To disrupt the current inequality in our capitalist system, we need to at least strive for balance in listening between those providing the money and those taking the money. One way to do that is to cultivate and recruit people with experience running social enterprise businesses to advise the capital holders. As seen in venture capital, there are more and more “operator-investors” out there who have previously founded or worked for start-ups.
Returns on inclusion. Diversity, equity and inclusion are in the DNA of impact investing. This one should be obvious. We have, of late, been inundated with the stats. Female founders received 2% of the venture capital invested in 2017. Less than 3% of VCs employ black or Latino investment professionals. How can we as a sector expect to reduce inequality in our society if we do not have an explicit imperative to bring more people of diverse backgrounds into decision-making positions? Shortlist, based in both Kenya and India, is making great progress in hiring local talent in part by anonymizing the resumes seen by their hiring clients. There is ample evidence and promising work taking off on this front (see Segal Family Foundation’s Africa Visionary Fellowship, Backstage Capital and others) and it must be a key component of our sector’s strategy moving forward.