Discussions about human capital and school improvement typically center on teachers, not administrators, and that's a mistake. Principals, who are responsible for selecting and developing the teachers they know are so important, are a critical driver of school success. So it is imperative that states do everything they can to find, deploy, and keep good principals. Unfortunately, when it comes to cultivating school leaders, current state-level practices are, at best, haphazard. In the worst cases, they actually may be keeping talented people out of the job. States are only just beginning to address the weaknesses in their principal pipelines--and even then, they are not yet developing the strategic approaches necessary to truly improve the talent pool and enhance student outcomes. To address these issues, states need to develop policies around conditions that support the pipeline: (1) The right work: The principalship must be designed as an attractive job that challenges and rewards capable people; (2) The right people: States must draw the most talented prospects to the field; and (3) The right places: The best, most determined leaders should have incentives to take on the most challenged schools. The ultimate goal? To have every school led by an engaged leader who knows how to drive achievement and how to develop and retain talented teachers.