Corporations have been striving to perfect the "people side" of their operations for decades. Most hunt aggressively for the right talent, train workers to produce at high levels, and reward top performers with promotions and higher pay. In public education, though, school districts have been more passive in managing this vital asset. Most rely on colleges and universities to supply workers, and pay and promote people for experience and education levels rather than for their success in raising student achievement. But as the pressure to improve schools continues to mount--and reform efforts fall short--a growing number of school district leaders, funders, education thinkers, and policymakers are zeroing in on developing "human capital" as the key strategy to improve student learning. In Washington last month, the new Strategic Management of Human Capital project held a three-day national conference that drew representatives from 40 large school districts, teachers' unions, state education departments, and executives of nonprofit education organizations. Leaders of the initiative are arguing that "strategic management" of teachers, principals, and central-office workers includes recruiting and developing people and using the system's performance as a guide to evaluating and paying them. This article reports on efforts on how to develop human capital in schools and to attract and effectively manage the most promising teachers and principals.