Big societal investments with big returns

In 1944 Congress passed what became known as the G.I. Bill, which provided a number of benefits for returning World War II veterans. From the time the bill passed till 1956, 2.2 million veterans used the G. I. Bill’s education benefits to attend colleges or universities. Most of those veterans would not have been able to afford college otherwise. My dad was one of those, and he became the first person in his family to graduate from college.
The G. I. Bill was a massive public investment that made possible a huge increase in the number of Americans with post-secondary degrees. The country has benefited from that initial post-war investment ever since.

In 1956, thanks largely to the efforts of President Eisenhower, Congress passed legislation that enabled the creation of the Interstate Highway System. We continue to benefit from that massive public investment in physical infrastructure that greatly reduced travel time in the U.S. and made possible substantial increases in productivity.

In 1961, President Kennedy issued a challenge to NASA to land a man on the moon and return him safely to earth before the end of the decade. The massive public investment that followed President Kennedy’s challenge resulted in Neil Armstrong’s “one small step for a man, one giant leap for mankind” in July 1969. The new or improved technologies that resulted from the research and development needed to accomplish that goal led to numerous other developments that continue to provide benefits to our society.

Contrast those large public investments in higher education, physical infrastructure, and research and development focused on a specific goal with similarly huge amounts that have been spent since the 1960s on a wide array of social programs and supports to alleviate poverty. Despite the enormous expenditures, the official poverty rate is higher today than it was in the late 1960s.

Is there anything we can do that might enable us to start reducing poverty? While there are no quick fixes or panaceas, we have become increasingly convinced that, given the current situation, an important piece of a long term solution would be a sustained, substantial investment in high quality early childhood development opportunities for children in low income households.

According to Ready Nation, a business partnership for early childhood and economic success that is part of America’s Promise Alliance:

  • “Disadvantaged children can be 18 months behind their peers by the time they start kindergarten.
  • Children not ready for kindergarten are half as likely to read well by third grade.
  • Children not reading proficiently by third grade are four times more likely to drop out.”

In a September 14, 2013 Opinionator piece on NYTimes.com, Professor James Heckman, a Nobel Laureate economist at the University of Chicago who has studied this issue for decades, wrote, “Quality early childhood programs for disadvantaged children more than pay for themselves in better education, health, and economic outcomes.” There is an enormous amount of data supporting that statement.

We see the need for such opportunities every day in our work with low income moms in the Excel Centers and Nurse-Family Partnership. If we made a large enough commitment in the U.S. over an extended period of time to expand the availability of high quality early childhood development programs for kids in low income households, there is a strong probability we would substantially reduce generational poverty and a lot of the social problems associated with it. And, as with the investments in higher education, infrastructure, and research and development in the 1940s, ’50s, and ’60s, our country would benefit from those investments for decades.

On Talent and Culture

I frequently talk about the tremendous array of dedicated, talented people who are part of Goodwill’s team. They can be found at multiple levels in all parts of our organization, and they are the people who make things happen day in and day out. Goodwill’s accomplishments are really the sum of their accomplishments.

From time to time I am reminded of how fortunate – even blessed – we are to have so many terrific people. For example, this year we are opening four new Excel Centers – diploma-granting high schools for older youth and adults. Our talent sourcing staff posted 68 positions we needed to fill, and the response was amazing. We received approximately 3600 applications that our staff reviewed. They asked 728 of those applicants for additional information, then conducted nearly 400 telephone interviews. From those, approximately 100 were interviewed in person by a panel of staff, and 68 persons were hired. It is particularly reassuring to me that so many fine people want to be part of the work we are doing.

Another recent reminder came from visitors from a Goodwill organization in another state. They spent two days touring our operations and talking with our staff about their work. During those two days they repeatedly told me how impressed they were with the caliber of our people – at every level and in every place they visited. The fact that visitors who have seen many Goodwills and who themselves operate a very fine organization would make so many glowing comments about our staff meant a great deal to me.
What’s the key? We don’t really have any “secret sauce.” Perhaps it’s a different key for different people, and perhaps it’s the sum of several elements that might include:

  • A mission and a variety of services that are easy to become passionate about. There’s generally a pretty strong feeling that what we are doing is important and is helping others improve their lives.
  • A culture that insists on treating everyone in a respectful manner. This means in every direction – up, down, sideways, with those who are inside the organization and with those who aren’t.
  • A genuine desire to provide people with the resources they need so they can do their jobs well and to provide learning and growth opportunities for our people.
  • A strong effort to provide safe working conditions that are bright, clean, and pleasant places to be. Of course, a pleasant place to work is in large part a function of having people who are pleasant to be around – most of the time, at least.
  • A genuine desire to improve – to become more effective at accomplishing our mission, to achieve better results, and to be better stewards of all our resources.

We don’t always succeed at all of this. We’re human and we make mistakes. But the positives far outweigh the negatives, and the culture in our organization today is many times better than it was early in my career when we were much smaller. I’m very aware that with over 3,000 employees spread across approximately 80 locations, the potential for that culture to deteriorate is always present. But when I see the kind of work that goes into selecting new staff – for example, the kind of work demonstrated in filling those 68 new positions in the Excel Centers – and I see the caliber and ability of those who have recently joined our organization as well as those who have been with us for much longer – I know we’re in good hands and I’m confident the future is bright.

Goodwill and Politics

During my career, which now spans four decades, there have been leaders from both major political parties at various times at local, state, and national levels. We’ve worked well with both Democratic and Republican administrations.

Goodwill is fortunate to have a mission that transcends politics and has appeal across political lines. Our employees, members of our boards of directors, donors, shoppers, students, and others we assist have political leanings that cover the entire spectrum. However, as we go about our work, we tend toward the practical rather than the ideological. We agree on a goal, find common ground around the means to achieve the goal, work together, and accomplish a lot. We’re mainly interested in what works – as long as the means are consistent with our values and basic principles, some of which are:

• Every individual has value, and we strive to treat everyone in a respectful manner.
• Work adds meaning and purpose to life.
• Goodwill offers opportunities, not charity, and fosters development, not dependency.

Opportunities we offer include employment for people who have had limited options because of a disability or other barrier. We also offer opportunities through our Excel Centers for adults who want to earn a high school diploma and begin work on a post-secondary credential that will enhance their employment options.

During the recession of the early 1980’s, we concluded that nothing would help our organization or the people we assist more than a strong, growing economy. That continues to be the case. Also, it seems to us that the better we develop the potential of our people – especially by increasing education attainment levels – and provide conditions that enable people to productively use their talents, the stronger the economy is likely to be.

As our organization has evolved, on numerous occasions we’ve redeployed resources from efforts that were marginally effective to initiatives that showed more promise. Over time, this shifting of resources, combined with a substantial increase in our pool of talented people – our human capital – has enabled the organization overall to grow not only in size, but in long term impact.

Unfortunately, over the last forty years, we’ve seen in our society negative trends in a lot of social indicators, including poverty rates, education attainment levels, incarceration rates, and a lot of health-related issues, despite a lot of well-intentioned programs that have cost enormous amounts of money (see my July 6, 2011 post). Fortunately, there have also been a few programs that randomized controlled trials have shown to be highly effective in preventing problems and developing potential. One of those is Nurse-Family Partnership, which Goodwill is implementing in Indianapolis.

In the face of massive federal deficits, it would seem reasonable to reduce or eliminate funding for programs with marginal effectiveness and increase support for evidence-based programs that produce significant long term impact. The future economic and social benefits could be enormous.

Reasonable people can and will disagree over many things, including how best to reduce social problems and generate a higher rate of growth in the economy. However, in the face of such disagreements, reasonable people must try to find common ground and not allow their view of the perfect to be the enemy of the good. My hope is that enough of our elected leaders in both major political parties would resolve to overcome and move beyond a toxic political atmosphere and resulting gridlock that have been preventing steps that might lead to a stronger, healthier, more civil and economically vibrant society that would benefit all citizens, including those we assist at Goodwill.

Goodwill’s Directions

Over the past decade, Goodwill in central Indiana has developed and now operates several small high schools. More recently, we have launched services for very young children and their moms. These are not areas in which Goodwill Industries around the country have typically been directly involved, and I am occasionally asked why we have moved in those directions.

At Goodwill, we have an overriding desire to help improve lives and communities and, as best we can, help solve serious social problems. We generally prefer to:

  • Strive for long term impact
  • Take a holistic approach with individuals and, in many cases, with their families
  • Enhance education levels and the attainment of credentials that will improve an individual’s employability and earning potential
  • Prevent problems and develop potential rather than engage in remediation

Strategic planning in our organization has morphed from a discrete event we used to do every few years into a strategic thinking process that is continuous. Changes in our environment are occurring at a very rapid rate, and we find ourselves with more new opportunities than ever before.

Every major step we have taken over the past twenty years has been a result of (1) what we have learned from previous experiences, (2) what we know about the communities in which we operate, and (3) how we believe we can have the greatest possible impact in the lives of people and in the larger community.

Key factors that have heavily influenced our recent directions include:

  • A recognition that many major social indicators have become worse over the last 30-40 years, despite massive increases in public spending and a huge proliferation of not-for-profit organizations. Many existing systems have not adapted well to changes that have taken place in our society. The silo structure of the public sector and the fragmented structure of the not-for-profit sector are part of the problem. Fragmented approaches have not worked and will not work to solve complex social problems, regardless of how much money is made available. Neither will highly bureaucratic, overly prescriptive approaches. One size does not fit all.
  • A belief that there are no quick fixes to many of our society’s problems, and we must not allow ourselves to be satisfied with gradual, incremental progress. We need long term thinking and long term solutions. We also need a strong sense of urgency.
  • A recognition that many of the pieces needed to solve societal problems exist, but in relative isolation from other pieces that could also be part of a long term solution.

I believe that two of the most important elements necessary to reduce generational poverty and its accompanying social problems are:

  • Raise the education levels of children, youth, and adults in low income households. This is why we developed and operate the Indianapolis Metropolitan High School and The Excel Centers.
  • Ensure that children are behaviorally and cognitively ready when it is time for them to enroll in kindergarten. There is powerful evidence of the enormous positive long term impact of high quality early childhood development programs for children in low income households. We must greatly increase the availability of such opportunities – and there must be a strong sense of urgency to do so. Goodwill has taken a major step in this direction by launching Nurse-Family Partnership in Marion County.

It’s also important to emphasize that on all of these initiatives we are working with a lot of other organizations that have compatible interests and complementary resources. In some cases, those relationships are evolving into networks that I believe will play an increasingly important role in developing human potential and reducing serious social problems.

Newton’s Laws and Goodwill

In high school and college physics, I became well acquainted with Sir Isaac Newton’s Laws of Motion. After nearly four decades as a CEO, I’ve concluded that the concepts underlying at least two of those three laws apply to organizations – actually, to institutions of all kinds – as well as to the physical world.

For example, Newton’s First Law of Motion – the Law of Inertia – is often paraphrased as “A body at rest will stay at rest until acted upon by an external force.” How can that apply to organizations? It’s been my observation that the more an organization is removed from day-to-day competition (a powerful external force), the slower it is to adapt as its external environment changes.

When you are subject to competition on a day-to-day basis, there’s more of a sense of urgency, more of a drive to improve. You know that if you don’t improve, someone is going to take your customers (or in the case of a school, your students) away from you. For organizations that lack strong competition, the faster the rate of change on the outside, the more they tend to lag. They might survive, but they are likely to become increasingly ineffective.

This is not generally as much of a problem in the for-profit world as it can be in the public and not-for-profit sectors. In the for-profit world, if you don’t successfully adapt to external changes – including new or stronger competition – in most cases you will become extinct.

Newton’s Third Law of Motion – or a reasonable facsimile thereof – also applies to institutions. This law is often stated, “For every action there is an equal and opposite reaction.” A Corollary might go something like this: “For every excess there will be a proportionate reaction and correction. The greater the excess, the greater the pain associated with the correction.”

Think about that in light of the financial problems currently plaguing the U.S. and much of the rest of the world. For example, excessive spending (and related borrowing) by individuals, organizations, or governments will eventually prompt a correction. Sometimes the correction will come only after years of excess. But eventually it will come. And with the correction will come pain proportionate to the degree of excess.

Of course, excessive conservatism can also be a problem. Companies that do not spend enough to properly maintain their physical assets, develop and retain their human capital, and improve their productivity are jeopardizing their future. They can also jeopardize their future when they fail to invest in opportunities for which they are well-suited, thus leaving the door open for more aggressive, well-managed competitors to increase their strength.

Governments – cities, states, nations – that fail to adequately maintain their infrastructures will eventually have a huge price to pay – and you can count on a strong reaction from their citizens when the bill and the pain associated with it come due.

While we take nothing for granted, at Goodwill we’ve thus far been able to avoid the kinds of excesses that can jeopardize an organization’s future. Goodwill is also fortunate to have functioned in a competitive marketplace since its founding. From the beginning, we have operated a commercial enterprise that sells goods to the public as a primary means of accomplishing our mission. This has been a driving force in creating and sustaining the culture of our organization and is a major reason we’ve grown and evolved the way we have.