SOM Prepares Students to Lead Mission-Driven Organizations

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When Garrett Raczek ’15 enrolled at the Yale School of Management after three years as a teacher, he aimed to gain the skills that would help him transform the education sector. Taking Professor James Baron’s Leading Mission-Driven Organizations course, he says, was an important step.

“While I had the passion and drive to create meaningful change, I also knew that I lacked the tools to put my passion into action,” Raczek says. “Professor Baron’s course is custom made for people like me who want to have a positive impact in the world, but need a nudge in the right direction.”

An elective course taught by Baron, the William S. Beinecke Professor of Management, Leading Mission-Driven Organizations introduces students to the unique challenges and opportunities that such organizations face. A mission-driven organization (MDO) is one that is created to achieve a societal benefit, in addition to generating revenue for stakeholders. MDOs can be nonprofit or for-profit, governmental, philanthropic, or religious-affiliated organizations.

Baron, who has been teaching the Yale SOM course for three years, says it has broad appeal across the Yale campus. In addition to MBA students and students from SOM’s Master of Advanced Management and MBA for Executives programs, the course has drawn undergraduates and graduate students from Yale’s schools of Divinity, Public Health, and Forestry & Environmental Studies.

Leaders in many industries will contend with MDO issues, Baron says.

“A large fraction of our students will serve as board members, investors, advisers, or in other capacities to mission-driven organizations over the course of their careers,” he explains. “Here, we’re giving them a primer on the very distinctive challenges these organizations all deal with in some capacity.”

MDOs, for instance, tend to underinvest in infrastructure and in the development of their long-term capabilities, Baron says. This failure negatively impacts employee retention, which, Baron says, is often further damaged by a lack of formal reward programs, such as bonuses and promotion opportunities.

Authenticity of leadership is a central issue for MDOs, Baron adds. The public expects mission-driven leaders to exemplify the values that the organization espouses.

“The divide between public and private lives is less clear,” he says. “To have the requisite credibility, leaders must align their own style and core values with the organization’s.”

Baron’s course tackles these issues and addresses topics such as organizational design, HR strategy, and the leadership challenges faced at different stages of an MDO’s lifecycle. Students also hear from a diverse lineup of guest speakers, representing organizations at different stages of growth in a wide range of sectors.

Speakers this year included John S. Reed, chairman of the Massachusetts Institute of Technology’s Board of Trustees and former head of the New York Stock Exchange; Steve Martin, Rob Morris, and Jim Ehrman of Love146, a global nonprofit that battles sexual exploitation of children; Brian Daniels ’10, the director of performance management in Rhode Island’s Office of Management and Budget; and Dacia Toll LAW ’99, co-CEO and president of Achievement First, a nonprofit network of K-12 public charter schools in Connecticut, New York, and Rhode Island.

Visiting the class in April, Toll spoke with students about growth strategy, using Achievement First’s expansion as an example. The key issue for her organization, Toll said, is balancing excellence, scale, and sustainability: “How can we pursue both increasing excellence and scale, and do it in a way that’s sustainable?” she said. “That’s the challenge we all face as our organizations grow, and there is no single, ready-made answer.”

Raczek appreciated Toll’s candor.

“Her most admirable trait is her ability to simply admit when she doesn’t have the solution,” he says. “All through this course, we’ve discussed the importance of a team-based, collaborative approach to problem solving, especially in education, which relies so heavily on teamwork.”

The major assignment for the course is a team-based project in which student teams take the role of a consultant to an MDO, investigating a human resources challenge and making a recommendation. Projects this year included the development of an organizational blueprint for a public charter middle school in New York City; an analysis of the effectiveness of the finance function in an urban school district; and recommendations for incentive plans and performance management for a small for-profit enterprise dedicated to promoting financial independence in Uganda.

The projects were a valuable opportunity to put the tools developed in the class into practice, says Taylor Goodman ’15, who is planning a career in human capital consulting.

“I’ve developed a toolkit of frameworks for everything from organizational design to performance management,” she says. “As Professor Baron says, there are no ‘one-size-fits-all’ answers to questions of human capital, but I now feel more comfortable navigating that complexity in my professional life, both within and outside the social sector.”

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