A Reminder of the $54,000 Strategy: What Jewish Organizations Can Now Learn from Walmart!

54k-markBy Mark S. Young

You might have missed the cover story in the October 16th New York Times Sunday Business section. It was on Walmart, the retail conglomerate with a reputation of maximizing profits historically by minimizing costs, notably though low wages, minimal training, and scarce professional development. This strategy, however, has been faulty, as Walmart has suffered in recent years from inefficient operations that has lead to below-target sales. This prompted a course correction in early 2015 in a manner radical for Walmart. They have moved closer to the philosophy of Dr. Zenyep Ton’s Good Jobs Strategy. They raised wages, in many cases, above the market rate, and are focusing more on staff training and professional growth opportunities. The result? In only 18 months, Walmart has noticeably improved staff morale and retention, efficiency in operations, and experienced a notable increase in sales!

If Walmart, (Walmart!) can radically change their human resource strategies and experience greater financial and mission success, why can’t we? Even Walmart is now following Rabbinic wisdom. The Talmud suggests that we “raise wages in order for our workers to do better work.” (Bava Metzia 83a). Can we, as Jewish organizations, finally admit that keeping overhead and compensation (below the executive suite) down is, to put it mildly, unproductive? Are we blinded because we wrongly think this is what our funders or patrons expect?

It’s been 3 ½ years since I published my original $54,000 Strategy article in both JPRO Network’s Journal of Jewish Communal Service, and on this site. I advocated Jewish organizations to do just what many of our most successful corporations have been doing for years: 1) pay entry-level and early to mid management staff better then the market rate, 2) invest heavily in training, especially for managers of staff, and 3) create career growth opportunities through professional development. Many claimed this controversial, in part because this is counter-intuitive to the dogma we should spend 90% of our budget on program and only 10% to overhead (where some staffing, and all training and professional development costs typically are placed) that frankly has cursed much of the nonprofit sector, including Jewish nonprofits, for the last generation. Dan Pallotta’s 2013 TED Talk, “The way we think about charity is dead wrong” and who also spoke at the JFNA General Assembly last year, completely de-bunks this erroneous 90/10 belief.

But if your organization hasn’t acted already, the time is now to act. Leading Edge’s recent “leading places to work” survey has recently revealed that 47% of our workforce feel they are NOT compensated fairly, 51% say they need more training, and only 37% see career advancement opportunities in their organizations. Should there then be any wonder at this point why we have a problem securing and retaining a strong pipeline of future Jewish professional leadership?

Let’s be clear. Our current approach for many of our organizations mirrors Walmart prior to early 2015. This approach reduces our chances to retain talent that would not only strengthen the productive output of our organizations but would also help cultivate a new generation of Jewish professional leadership. This is downright silly, because we know what truly transforms institutions and communities, and what compels people to action, is effective and inspiring leadership that can speak authentically both to our cause and from our tradition. This leadership must come from the talent in our field we must actively and intentionally recruit, train, retain, value, and nurture.

At an industry level over the past 3½ years we are beginning to respond. Several examples: The creation and work of Leading Edge is providing us with important data and findings that bring further light to the imperative that we must strengthen the Jewish professional experience. I’ll re-iterate my admiration for national movements including Hillel International and JCC Association who are now explicitly making talent management among their highest priorities. We are now seeing more high-level leadership development programs not just for graduate students, but also for in-service professionals, including field fellowships from Wexner and Schusterman Foundations to name two. JPRO Network, of which I am a proud board member, has furthered its work to inspire Jewish professionals through its national programming, awards to professionals and incredible community programming by local affiliated groups. The Davidson School of JTS through The Leadership Commons, of which I am the Managing Director, has been strengthening our long tradition of training innovative leaders in the field for our educational and communal agencies across North America.

Yet, field-wide efforts, no matter how good, are insufficient. Organizations must take action. I strongly encourage CEO’s, Board Presidents, and their immediate executive teams to seriously consider and implement the $54,000 Strategy, or what I have recently called the Blessing our Workforce approach in my ELI Talk, Mah Tovu. Beyond the priorities of tikkun olam, supporting Israel, creating an active vibrant Jewish community, providing social services, and quality Jewish education, we must see investing in our own talented staff as a top-priority. Organizations who do not seriously invest in our people will be and are nothing but mediocre organizations doing mediocre work.

That’s not us. None of us want to participate, fund and work in mediocrity. We aspire to incredible achievements. Let us seriously invest in our stellar staff and missions in proven strategies that work so that our reality meets our aspirations. Even Walmart, (Walmart!), is taking the hint. Let us take the hint too.

Mark S. Young is the Managing Director of The Leadership Commons of The William Davidson Graduate School of Jewish Education of JTS and the board-programming co-chair of JPRO Network.