Author: Joseph Hooley, CEO of State Street
From the May–June 2017 Issue, Harvard Business Review
In 2014 the Massachusetts governor’s office called and asked me to serve in a public/private partnership. The group hoped to improve the quality of community colleges in the Commonwealth. Workforce development is an issue I care about, and every CEO gets calls like this from time to time. I try to help out when I can, so I said yes.
I went to a few meetings, and I quickly became frustrated. This wasn’t my first experience with public/private partnerships, and although some have been very successful, too many have not worked well. It can be mind-numbing. As I sat in one meeting, I began daydreaming about how State Street might have the leverage to attack parts of the workforce development problem itself.
Our company has a large charitable foundation, so we were already spending millions of dollars a year in the areas of education and job training. State Street is one of Boston’s largest employers, and we hire thousands of entry-level employees each year. That’s important. The grand prize at the end of one’s education is a job and a career, and we can provide that in a way that nonprofits can’t. Furthermore, our company is loaded with Millennials who want to volunteer, and mentorship is a key part of helping young people run the gamut from an urban high school to college and then into a job. When it comes to finding someone at State Street to mentor a student, you don’t have to ask twice.
I began talking about this idea inside the company, and employees were enthusiastic. We wanted to go beyond spot solutions and put together a comprehensive, systematic, and scalable program—one aimed at producing measurable, sustained outcomes.
That’s how we came to develop Boston WINs, which stands for “workforce investment network.” We launched it in 2015, and we committed to investing $20 million and hiring 1,000 graduates of urban schools over the next four years. So far, the results are promising—we’ve hired more than 200 graduates, and they are proving to be an excellent fit with our culture. Outside the company, every business leader I’ve talked to has been intrigued by our model.
Urban Education Is Central
I think a lot about economic opportunity, because I come from a middle-class family. I grew up outside Boston, one of five siblings. When I was in college, I always had a part-time job, and I funded my education with loans and my own earnings. I was paying back student loans well into my thirties.
My dad worked at State Street for 32 years, but during most of his career here, the company was very different from what it is today. In the 1970s State Street was beginning to transform from a traditional bank into a technology-driven financial services company.
That shift made it attractive to me. After college I’d gone to work for AT&T, where I received extensive training in what we now call information technology. I met my wife during one of those classes. After the consent decree that broke up the old Bell system, I ended up working for American Bell, which was selling communications equipment to big organizations and competing against companies such as IBM. The technology bent stayed with me; I became focused on finding ways to use technology to enable services and create capabilities.
My father retired from State Street in December 1985, and I joined one month later. I spent 10 years running a State Street joint venture, initially in Kansas City. I returned to Boston in 2000 to lead our global investment services business and was eventually promoted to vice chairman and then president. In 2010 I became State Street’s CEO.
Along the way, I became involved in local philanthropy, particularly as an active supporter and a board member of the Boys & Girls Clubs of Boston. I was able to visit some of the clubs to see their good work. They provide after-school care, teach skills, organize sports teams, and help kids with homework. I saw how much good organizations like that can do. I also worked on some urban school initiatives in which State Street had become involved.
To be effective, we needed to go beyond what happens in urban classrooms.
Through that work I became convinced that if I could help fix just one problem in the world, it would be urban education. Societal problems tend to be interconnected, and urban education touches many of them. Improving it creates economic growth, reduces crime, and lessens unemployment, social strife, and homelessness. I’ve visited a lot of schools over the years, and I’ve seen some excellent ones, but the solutions to providing good urban education tend to be spotty, and they don’t scale well.
Working Like a Relay Race
The more I thought about the problem, the more I recognized that to be effective, our approach needed to go beyond what happens in urban classrooms. Getting students through school, into college, and then into good jobs requires managing a series of handoffs and transitions, just as runners in a relay race have to pass the baton. For example, some nonprofits do a great job of coaching high school students to improve their study skills or to perform better on college admissions exams. But rarely do those same organizations help the students with the college search and application process, which is the logical next step. Other organizations do that, but many kids can’t navigate between the two. Then, when students get into college, they need mentoring and coaching to help them stay enrolled and succeed, which requires a different kind of support. After that they need help getting ready for a job and finding one. It’s similar to a hospital experience: The patient may be treated by several specialists, and they have to communicate well with one another to achieve overall success.
We wanted to create a program that would combine all the kinds of expertise necessary to support youths through high school and college and into the workforce. The key would be a coordinated system to pass students between these specialties, rather than relying on the students themselves to find what they needed when they needed it in a patchwork of organizations and solutions.
In short, we wanted to bring together a handful of nonprofits with a proven record of getting and keeping students on the path from the education system to employment, give those nonprofits funding to scale up, coordinate their efforts so that they were no longer working in isolation, and then commit to hiring a large number of those students after graduation.
With that vision in place, the question became: How would we achieve it?
Through State Street’s charitable foundation, we already had relationships with organizations that excelled at addressing specific pieces of the larger problem. But we decided to open up the field. We created a request for proposals and then held a Shark Tank–like competition among nonprofits, with the goal of choosing five groups that would receive grants over four years. Nonprofits crave multiyear funding commitments, so we had no problem getting a number of them to compete.
Not until they got involved in our screening process did they realize how hard this would be. To become a part of Boston WINs, they’d need to start collaborating with other organizations, which isn’t necessarily their strength. Many of the highest-performing, most dynamic nonprofits have charismatic leaders; we were asking them to check their egos at the door and focus on ways to collaborate. That didn’t always come naturally. My primary feedback to everyone was that the groups needed to think bigger. I believe that’s part of a leader’s role—to force people to raise their level of ambition.
We ended up choosing four organizations we’d funded previously and one that was new to us. Year Up is a Boston-based national organization that provides intensive skills training for low-income young adults. UAspire focuses on helping students find ways to finance college. The Boston Private Industry Council (PIC) helps students obtain workplace experience and find a path from school to work. College Advising Corps (CAC) assists students with the college search and application process. And Bottom Line helps low-income and first-generation students get to and through college.
Although the five organizations remain separate, we expect them to work closely—not unlike a group of manufacturing suppliers that need to cooperate so that parts fit together perfectly, deliveries are synchronized, and quality remains high. We call this coordinated action, and it refers to our intention to deliver these services in a complementary, reinforcing, and properly sequenced manner. We closely track what services each student is receiving; all five partners enter their data into a shared system every two weeks. We have 20 high schools participating this year; at each one we hold a monthly meeting where reps from the five organizations discuss individual students’ progress. All the students have a list of 12 milestones they must reach by certain dates—such as submitting college essays, completing financial aid forms, participating in a job shadow program, drafting a résumé, and doing a mock interview. Coordinated action allows us to confirm that students are staying on track, identify those who may have a gap in the support they’re receiving, and ensure that effective handoffs are taking place between the various organizations, especially when students make the big leap from high school into college.
The Broad Reach of Boston WINs
After the five nonprofits were chosen, we brought them in for a daylong session that I attended. We made sure everybody was committed to the vision. They were all enthusiastic—after all, they’d just won in a competitive setting. The challenge was that these organizations are used to having control. We had to explain that this would be different—each organization would need to hand clients off to another organization, and the goal was to maximize the collective impact of all five.
I cannot overemphasize how hard that has proved to be. Each of these nonprofits had been operating in its own lane and had perfected a solution to a piece of the problem. We were trying to get them to think and work holistically and horizontally in ways they hadn’t before.
We launched the program in June 2015, at an event with Boston Mayor Marty Walsh and Massachusetts Governor Charlie Baker. It was a wonderful culmination of the first stage of the program. But it was just the beginning.
The beauty of Boston WINs is that it can reach any city youth who is involved with one of the five organizations, all of which had recruitment processes in place before they partnered with State Street. (Year Up and Bottom Line have a formal application system, whereas services provided by uAspire, PIC, and CAC are available to any eligible Boston public school student.) Because the existing system of each nonprofit was already working well, we decided not to interfere; instead, any student working with any of the five is automatically considered a Boston WINs youth. The new program connects the five nonprofits so that a student who receives assistance from College Advising Corps in searching for and applying to colleges will now also receive guidance on financing his or her education from uAspire. In its first year alone, Boston WINs served more than 19,430 youths, and State Street hired 216 Boston WINs graduates.
We opened a facility at the University of Massachusetts that allows students to work part-time, gaining job experience and giving us a look at how they work. We have more than 50 interns from Bunker Hill Community College at any given time. We give them a tryout, and we hire some of them permanently after they graduate. Once they’re on board, they can develop their skills and migrate through the organization.
“It Was Vital to Have That Support”
When Alana Hans-Bodden was attending public school in the Boston neighborhood of Dorchester, she believed she was smart enough to become the first in her family to go to college. But the steps involved—from choosing the right school to applying to lining up financial aid—were overwhelming. Hans-Bodden, now a 24-year-old senior associate on State Street’s independent verification team, obtained help from a nonprofit called Bottom Line, which is part of the Boston WINs program. She explains how it helped her get ahead. Edited excerpts follow.
When did you begin working with Bottom Line? I started in high school. They worked with me on college applications, essays, interviews, and financial aid and scholarship applications. They try to make sure you find the best fit for college. I attended Bridgewater State University, and a Bottom Line counselor worked with me throughout my time there. We had formal meetings three times every semester—at the beginning, at midterms, and right before finals. Bottom Line also held career fairs and helped me write a résumé and prepare for job interviews.
Would you have made it to college without that assistance? I think so. But I probably would have taken a break from college when my mom passed. I was a 20-year-old sophomore, and I became responsible for my 12-year-old sister. Bottom Line helped streamline things for me—how to fill out the right forms, send the right e-mails to my professors, and notify people so that I could get through that semester and stay enrolled. It was vital to have that support.
How did you wind up at State Street? My first interaction with State Street was at a career fair, as a freshman in college. At the time, I was a political science major who wanted to go to law school, and finance wasn’t on my radar. But my mother was an accountant, and not long before she died, we had a conversation about how a finance or accounting major would benefit me in the long run, particularly since law school would be difficult to afford. I talked to my Bottom Line counselor, and she suggested I do a job shadow. I spent a day watching someone work at State Street. Late in my senior year, I was asked to give a speech at a dinner for Bottom Line. After I spoke, a State Street HR person approached me and began introducing me to executives. I interned there during the summer of 2015 and joined full-time that fall. My work is challenging—it’s not the same thing every day. I have to think about work processes and analyze data to find ways the company can reduce risk and increase compliance.
What’s your involvement with Boston WINs now? I keep in touch with my Bottom Line counselors, I go to events, and I network within State Street with other employees who’ve come through the programs that make up Boston WINs. Looking back, I see that I came away from my experience with more confidence, a better sense of what I wanted to do with my life, and a better ability to connect, to be myself, and to reach out for support when I need it.
We’ve committed to four years of funding, but we evaluate each nonprofit annually to see how well it’s contributing to the overall mission. We reserve the right to kick a group out if it’s not cooperating. We measure progress using metrics and dashboards. We want to see how many people are affected by these programs and how their trajectories have improved. When you’re looking at scale and return on investment, the metrics are important, but the individual results are important too. When you meet a kid whose trajectory was completely changed by a program like this, it’s inspiring. And those young people work hard as employees. They appreciate that the opportunity they’ve been given is something special.
As a CEO, I’m careful about how much time I devote to philanthropy. I report to our 11-person board of directors, and I’m responsible to shareholders, employees, clients, and the community. My greatest allocation of time is to the first three groups, as you’d expect. But the link between our community involvement and my own conscience is pretty tight. This is not just feel-good stuff. We’re competing for talent in this city, and all our employees—especially the younger ones—appreciate our community involvement. I meet every month for breakfast with groups of employees, and I always ask them two questions: What keeps you at State Street? and What would prevent you from staying at State Street? They usually cite flexible working conditions, career opportunities, and community involvement as their priorities. The connection between that community involvement and our employees translates directly into how well we serve our shareholders and clients.
We’re nearly halfway through our four-year commitment to Boston WINs, and I think we’ve established a pretty good rhythm. We’re already thinking about how to scale the program beyond Boston, to other parts of the country and the world. State Street has big operations in Kansas City, Singapore, Poland, Ireland, and elsewhere, and there’s no reason we can’t make it work in those places, too.
The program fits nicely with the evolution of our company’s strategy. As CEO, my two biggest priorities have been to transform State Street into a technology-enabled digital business and to make us less about processing and more about deriving success from data and analytics. That strategy shift has had an impact on our hiring. We need employees who are very comfortable with data and know how to analyze it. We need more IT workers. As a result of the Great Recession and the Troubled Asset Relief Program, companies like ours also face more regulation, so we’re hiring staffers in the compliance function as well. Boston WINs is helping us find great employees in these areas.
I believe that Boston WINs will be an important part of what State Street accomplishes during this decade. If we can crack the code on the problem of urban workforce development, we’ll create a diverse group of well-educated and highly motivated employees for our company while also filling a need for the entire community. Companies talk a lot about wanting new hires to be “job ready,” and Boston WINs achieves that. It’s a great example of how a program that benefits the city can simultaneously benefit our shareholders.
A version of this article appeared in the May–June 2017 issue (pp.41–45) of Harvard Business Review.