Grooming the next generation of microfinance leaders

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March 16, 2010

Peg Ross is the Director of Grameen Foundation's Human Capital Center.

Spend time at a microfinance institution (MFI) and you’ll be impressed with the resilience and resourcefulness of people who are usually out of the spotlight: the mid-level managers charged with running day-to-day operations.   Much like managers at a typical commercial bank, the way they deal with challenges or crises and effectively manage their teams can significantly impact the entire organization.  This impact  is felt more acutely  given the microfinance industry’s uniquely personalized approach and social focus.

In many respects, these managers are the backbone of their organizations,  and the future of an industry that is expanding rapidly.  But not enough is being done to develop the “middle-manager muscle” they need to help them perform better at their current jobs or to develop the skills they will need as future leaders.  This challenge was captured in a recent paper, No Footsteps to Follow, which documents conversations with microfinance practitioners on the impact human capital issues can have on organizational growth.

That initial exploration is part of a larger initiative focused on strengthening the leadership capabilities of the next generation of microfinance leaders. While we’re focusing initially on India as our incubator country, we intend to develop a solution that can be adopted more globally.  Last Thursday and Friday, we joined colleagues from Continuum, the Center for Creative Leadership and ShoreCap Exchange to plan our immersion field research and to discuss how we’ll use design thinking as our approach to navigate these largely uncharted waters.

Design thinking is emerging as a new way for organizations to develop innovative solutions to social problems (the Stanford Social Innovation Review offers a great overview).   It is based on the simple logic that solutions are much more effective when you put those whom the solutions are meant to serve at the center of your work.  Direct observation helps to uncover what they actually need and not what you think they do.

Throughout our field research this coming May, we will be talking with and observing mid-level managers at six MFIs in India.  We will also be talking to those who interact with them at various levels, ranging from field officers to CEOs to local government officials to clients (especially if the middle-manager started as a field officer and came up through the ranks).  This will help us to construct a clearer picture of the challenges and opportunities they face and what type of leadership development solution might be of help.

Over the coming months, we will keep you updated on our progress through blog posts and other reports from the field

Comments

Micro-finance is becoming increasingly important, even in communities here in the United States. Thanks for your continued efforts in educating the leaders of this revolution.

I think following Dr. Yunus's footsteps will inculcate the leadership skills in many microfinance managers. I recently read Banker to the Poor and was amazed with the HR perspectives highlighted. Workers at Grameen Bank are exceptionally motivated despite lower-than-average salaries because social-consciousness had substituted profit motivation for them. This is just one of many subtle ways employed by Dr. Yunus that demonstrate this effective leadership skills.

Can't wait to review your findings. In MX an underestimated weakness in MFI's is human capital and their conception of their activities.

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