Shortly before being named one of Time Magazine’s 100 Most Influential People in the world, Mellody Hobson was mistaken for kitchen help at a political event she helped arrange. Today, she advocates being proactive, comfortable, and “color brave” in prompting uncomfortable, but necessary, conversations about race. We were happy to have her speak at our latest Mizuho Speaker Series on topics ranging from creating effective diversity and inclusion programs to the pay gap and financial literacy.
Transcript
Jerry Rizzieri:
Hello, everyone. Welcome to this installment of our Speaker Series, featuring Mellody Hobson, the co-CEO and President of Ariel Investments. I will say that Mellody is the very definition of involved. She currently serves as Vice-Chair of the Board of Starbucks and is also a Director at JPMorgan Chase. She is Chairman of the After School Matters, which is a Chicago based nonprofit that provides teens with high quality after school and summer programs. She is Vice-Chair of World Business Chicago, Co-Chair of the Lucas Museum of Narrative Art, a board member of the George Lucas Education Foundation, and a board member of Bloomberg Philanthropies.
Natalee Graham:
Thank you so much and we're so happy to have Mellody here with us tonight on such a phenomenal, coming off as such a great weekend. Where we have our Vice President Elect, who is the first woman and the first Black woman to be in that position and who by Mellody, who is an exceptional woman in an of herself. Jerry gave us a brief background. You're on the board of JPMorgan, Starbucks, and you have a residential college named after you at Princeton. We're here to talk about intersectionality, which is looking at race, gender class. How all of those overlap to talk about our unique experiences. And so we want to hear from you. How does all of what you do, and what you present make up who you are and how you manage and how you lead.
Mellody Hobson:
Well, that's a big question. I think that we are an amalgamation of a whole lifetime. Certainly that's true of me, the early version of me. Of the little kid who was the youngest of six kids in my family from a single mom who struggled at times, not as much as some but a lot, it felt like to me. Really, I think gave me a great deal of resilience. I think a lot of people look back at those early years of their life, especially if they were tough and feel some kind of sadness or disappointment. I just feel that it helped build a stronger version of Mellody. And ultimately allowed me to forge ahead, and had the will to persist in accomplishing some of the goals that I set for myself. The goals weren't around titles or money. The goals were around excellence. I thought if I was excellent at things, it would bring new opportunities to me. To the extent that I could be prepared, it would augment my confidence in situations.
Natalee Graham:
Wonderful.
Michael Katz:
So, Mellody, just to follow up Natalee's question. Given the fact that we have an opportunity to have a new administration in place and a person of color and a woman in her seat. I wanted to get your thoughts about how do you believe that, that will help advance that diversity dialogue? Then if you could comment, what are some of your own perhaps hopes and aspirations for the Biden Harris administration?
Mellody Hobson:
So first I'll start by saying, "Yay." I'm so excited for Kamala and for us. I listed a picture that it was a picture of Kamala standing next to the shadow of the little Black girl who was crossing the segregating schools. It's such an iconic photo and they were standing next to each other. I said, "That little girl is all of us." So how does it change things? First and foremost I think it lets a lot of Black and Brown girls know that there are no limits to the possibilities for them in the highest offices of our land. That is truly heartening. I was teary over that thought. But it also, I think helps to change the mental models that people have, where they have this idea of what a Vice President is supposed to look like and what they're supposed to be. It gets adjusted, and that adjustment it gets more inclusive. I think that's a really, really great thing.
What are my hopes? First and foremost, my hopes for the Biden Harris administration is that there'll be successful because that's so important to all of us. No matter who you are, no matter what party you belong to. We want our president and vice president to be successful. Because that means that the possibility of America being more successful, and us as individuals being more successful increases. Secondly, I'd say my hope for them is that we have some calm. I think it will be really great to be in a situation where the headlines don't overtake us on a day-to-day basis. Which I know makes investing challenging with the volatility it often creates in the markets. We don't need any self-induced I think volatility self-induced anxiety. I think we've had some of that, and it'll be nice just to be in calmer seas.
I say that without making a value judgment, I just think that America is... especially with COVID and everything else. There's just a real need for some calm. There's just been a lot of drama. So those are obviously, those sound like very big-picture and mom and Apple pie. There are a lot of other things I'd like to see and immigration policy. I'd like to see the DACA kids have a path to citizenship. I think they have a lot of work ahead of them in terms of turning around the financial situation of the country. But we've been to this movie before and I believe in American ingenuity and American know-how, we'll get out of this crisis that we're in. The market of course today seem to suggest that they agree a post-vaccine economy will allow us to return to some kind of a normalcy and ultimately hopefully financial strength.
Michael Katz:
I want to say amen.
Natalee Graham:
Yeah.
Mellody Hobson:
That works.
Natalee Graham:
So Mellody you've talked about challenges, and the challenges that we see in our society, but even for yourself, I'm sure we've heard about your successes. I'm sure those had their challenges or maybe opportunities for change in your life. Wanting to talk to you about what was it like being the only one in a room at different stages of your career, and what that means to you and how you went through that?
Mellody Hobson:
So both of you be Michael, and Natalee, you know what it's like, you've been the only one too. So the question is, what do we want to project? I said, my confidence was always augmented if I was prepared and study. So I always think that's a good idea. But being the only one became for me a very interesting opportunity. So I don't believe in first and only, and I want to say that. I think people who brag about being first or only, I think that we should all be going for first of many. So that's one thing I should say. That does not give me any kind of pride. However, when I have been the only one in the room, one of the things that I've done is to realize my uniqueness would allow me to stand out.
I remember going to lots of conferences, especially early in my career. People would come up to me and say "Mellody." I'm like, "How do they know my name?" Then it became very, very clear to me, I was the only one. So I started to make jokes. I'm like, listen, I can use this to stand out. I can literally be a one name person like Cher, or Beyonce. I don't even need a last name because of how different I am in this room. It's a different mentality and sort of lamenting. I said, "Okay, if I'm going to be memorable, I'm going to be memorable. I'm going to have memorable things to say. I mean, I've had memorable thoughts and I'm going to leave an impression that hopefully makes it easier for the next Mellody that comes along."
Natalee Graham:
That's fantastic.
Michael Katz:
Moving toward the financial services industries historically had been underrepresented by minority groups. Whether it be gender, race, across the broader population, but probably more pronounced at kind of the upper echelon, the top tier. So what do you think has contributed to your success? I know you talked before about hard work, but also kind of as you rose through the ranks. What does that maybe reflect on Ariel as clearly one of the top African-American investment firms, but also happens to be employee owned. What is it about Ariel that I think allowed you to achieve that success? So both the combination of the you, and the company.
Mellody Hobson:
So I'm just writing notes because there's so much there. First it's interesting I just will challenge this idea, women are not a minority in the United States, but we're a minority in the financial services industry, and in lots of industries. It's just sort of an interesting thing which has happened in terms of, how the world gets reset around our lack of representation. The second thing I would say is that when I think about how and why I was able to succeed. My mother who was just so unusual in so many ways, an introvert really quiet. But she always used to tell me, "Make yourself indispensable, make it so they can't let you go. They can't fire you." I know that's an interesting way of thinking about a career, but that's what always led me. I was like, "I want to be the person someone wants on their team" That they want to grab you because you do such excellent work and they seek you out.
So the way that I did that, I just volunteered for all the work no one wanted to do. I mean, literally no one. I would do anything no matter what the ask was, I just tried to be enthusiastic about it. Sometimes not being in love with the work, but saying it's what you project to people that will give me the next opportunity. I remember I told this story, John Rogers, who founded our firm, he came in one day and he said, "Mellody, you write the best thank you notes. My daughter Victoria had an asleep over last week. Do you think you could write a big thank you note to the parents?" You know, some people may have been offended by that. So I said, "Can I talk to Victoria?" She was a small child. He's like, "Why do you need to talk to her?" I was like, "I need to know about the party."
I literally asked her, she's on the phone, she's like seven, "How was the cake? What games did you play?" So John is looking at me and I was like, "Listen, these periods are going to say, this is the best birthday party thank you note I've ever gotten." That would happen in all sorts of ways. The client letters that we wrote, we used to write a column for Forbes. I mean, we were asked by the Wall Street Journal once to do a book review. I was like, I just want it to be the best thing they ever saw. So I had to kill myself. I mean, just like so much self-flagellation and so much worry. But I really wanted to make sure that anything that we did was great and I was just willing to volunteer for those things.
I've got one of those coming up because the Wall Street Journal asked us to do a column for year end, where they're going to a lot of experts, and ours is on the markets. It's due on Friday and of course I'm like cursing myself like, "What was I thinking? Why did I say yes?" But at the same time, I want you all to read it and say, "Wow, they did a really good job." So, it's a funny balance and conversation I have in my head.
Natalee Graham:
Yeah. That's amazing. And fantastic. We can sense the enthusiasm now, as you're speaking. You have brought that enthusiasm to the living room of many Americans, when you were doing your various TV spots. We spoke a lot about financial literacy, and I know that's very important to you. So wanted to talk to you a bit about... and wanted you to tell us, what trends you're seeing in the communities of color, particularly for women of color? As it relates to financial literacy and the importance that that holds for you and for each and individual American as we go forward?
Mellody Hobson:
This is a big one because if we had had a financially literate society I don't think we would have had the Great Recession. People wouldn't have been signing up for mortgages that they couldn't afford, banks wouldn't be trying to do that. I mean, there was a whole... I'm not placing blame, I'm just saying no one ever taught us. It's especially true of people of color. It's more true of women than not. I challenge everyone all the time I say."It boggles the mind that in high school in America today, you can take wood shop or auto and not a class on investing." Which always leads me to ask audiences, "Who welds in their spare time? Who cleans their own carburetor? No one." Yet no one teaches you as you about the Dow, the NASDAQ, the S&P.
I'm not talking about home ec, the how to read a light bill and write a check. I'm talking how to really understand that financial markets so that when you're sitting there picking investment options for your 401k plan, which has not only implications for you and your own financial security later in life, but perhaps the wealth that you might leave behind to your heirs, that you get it right. But no one taught us. So that makes this a mission for me, I'm like an evangelist on this topic. Because I think to the extent that we have financial literacy in society, we'll actually narrow the wealth gap that exists. Both with Black and Brown people and the majority community, as well as the wealth gap that exists in terms of gender.
Michael Katz:
So that's actually a great segue to one of the questions we had related to the wealth gap and that's the gender pay gap. It exists not just for women, but even more accentuated for women of color. I believe it takes an additional eight months for women to make up that gap. What advice would you give to managers or companies as a whole, in terms of trying to bridge and address this disparity, whether it be in promotions, advancement, as well as compensations?
Mellody Hobson:
First and foremost, you've got to keep track of the numbers. I keep saying, "If it matters, it counts. So start counting." You have to see across all categories where are your people? Are they rising up? Are they not rising up? And understand why. I'm a big believer in big fan of gender equity pay studies, I think those are a good idea. I recognize that they're not one and done because you have to do them on a regular basis just to account for all the movements in a population of employees, as well as a whole host of issues. From a women stepping out of the workforce to have a baby, to a whole host of things. That should not penalize us the way it has historically. As they say, a college educated woman, they call it the mommy tax, forgoes about $1 million in salaries, and promotions, and advancement over the course of her professional lifetime for every child that she has. That's not right.
So I think America is really starting to understand the exposure that exists around this issue, to the extent that that equity is not there. I think that's a wake up call, the lawsuits were a wake up call. I'm not a fan of lawsuits, but I do think that people are more intentional about this now. I think that the thing is the whole society is smartened up. As corporate America, there's nowhere to hide. The accountability factor is so much higher than ever before because of the viral nature of our society. So I'm hopeful. I know there's still a long road to go here. So please don't think I'm being Pollyannish about this, but I think at least the keeping track leads to a better outcome.
Natalee Graham:
Great. That's actually a great point that you've made Mellody. One of the things you say is that, Change doesn't come from without it comes from within." And that institutions sort of need to fix themselves, when they're going about that. So wanting to hear from you around this topic. I know you talk about the gender gap study, pay equity study. What are some other advice or takeaways that you can help provide us in terms of how firms can fix themselves and how they can do the measurements and try to further themselves along this journey called diversity equity and inclusion?
Mellody Hobson:
Well, at Ariel we're, co-sponsors with something called the Black Directors Conference, and it brings together the fortune 500 Black directors. Also, in recent years, we've added Latin X directors. The whole idea of us coming together is to think and make sure that the civil rights agenda is not left out of the boardroom. We think that is part and parcel to our fiduciary responsibility. Because to the extent companies are not inclusive and diverse, we think a lot of embedded risks there. So we bring together all the fortune 500 directors, and we talk about the three P's: people, purchasing, and philanthropy. That's our call to action.
We want to measure across categories. So with people we say from the top of the organization and the board all the way down by ethnicity and gender, what do your numbers look like? No putting everyone together in one big multicultural umbrella, because it masks the under-representation. You don't get credit for that. No patting yourself on the back if 90% of your women employees are assistants, that doesn't work. So we started off with people. We think to the extent you're tracking and have the numbers, again, it leads to better outcomes, especially in terms of law establishing long-term targets.
I didn't say quotas. I said targets, which is very different. Targets are goals. Quotas are mandatory. In corporate America, we're used to targets. We have earnings targets. We had profitability targets. We have all sorts of targets that we're very used to. The second thing we talk about is business diversity, making sure that your spend, your corporate spend also considers minority vendors. This is something that heretofore people haven't spent a lot of time on. Or they talk about what we call last century supplier diversity. Where they don't focus on the bigger areas of corporate spend. Which are professional services, financial services, and technology. So making sure that there's representation there.
Then last but not least philanthropy. To me, it's become the tail that's wagging the dog. I think there's a lot of virtue signaling going on right now where corporations want credit for the donations. I'm happy that they're making them to Civil Rights institutions, but they cannot, as you've already suggested, fix their house from without, they must fix it from, within.
Michael Katz:
So I know we're running tight on time. I want to hit on a couple of things. So I loved listening to your Ted Talk where you talk about being a color brave. So for those who haven't watched it, I highly recommend it. Can you explain what that means? Then just given the current environment that we're all in, what does that mean in our current context? Because I think the Ted Talk was a couple of years back.
Mellody Hobson:
I did it in 2014. It's hard to believe that was six years ago, but it's perhaps even more relevant than ever before. I mean, this is the same story over and over and over again. I love this joke someone once told me, that when Einstein was at Princeton he was giving a test to the students, and one of the students raised their hand and they said, "Professor Einstein, Professor Einstein, the questions on this task are the same as the questions last year." He said, "The questions are always the same. It's the answers that are different."
When I talked to him about being color brave, I was really trying to address this idea that so many people had proudly told me about. Which is that they were colorblind. They were often members of the majority community. I don't say that to be disparaging, but there was pride. "I don't see color." I started to finally realize and say, "You don't see color, but everyone around you is like you. So maybe we need to step out of that not seeing color, and see it. Because if you see it, you would see it's missing." So instead of being colorblind, how about we become color brave. We invite people in our world who don't look like us, who don't think like us, who don't act like us, and who don't come from where we come from. Let's see how that actually enhances our life, and I believe ultimately built a more tolerant society.
Natalee Graham:
Thank you, Mellody. That that would be wonderful. Just to stay on that for a bit, when we talk about being brave and another thing you say is to be, "Unapologetically a woman, and unapologetically Black." Wanting to get your views on how do you do that in a professional setting such as corporate America? Which at times may not have that as the standard. There may be struggles off of how you present. For example, the crown actors was just passed last year. Which had actually had to be enacted that you could not fire a woman, a woman of color, a Black woman for wearing her natural hair to the workplace. So how did we become color brave and be unapologetically Black and a woman, and love your jacket as being honored positively women. How do we do that? When the standards may be different?
Mellody Hobson:
I don't think it's about standards. I think it's about you, and what you decide you want to be and what image you want to project. For me, the story that this whole idea of being unapologetic came to me at a funeral. It was the funeral of John Johnson, the great American entrepreneur who started Ebony and Jet magazines. He had all these eulogies, and one was more special than the next. It was people like Bill Clinton and all sorts of people sending him off. It was Tom Joyner, the very famous Black disc jockey, who said that "John Johnson was unapologetically Black."
I remember sitting there and I was just taken aback by the concept. I decided at that moment, that is what I wanted to be in everything that I did. That I did not want to apologize for who I was. I could think of little ways in which I had done it. I said, "It would never happen again." I felt the same thing about being a woman. That doesn't mean I have to be militant. It doesn't mean I have to be in people's face with some kind of very heavy handed Black agenda, or a feminist agenda. But it does mean that I can be authentic to myself, believe what I believe, not leave those things out the door when I walk into a room.
I think that to the extent that more of us become more and more comfortable with that, we will be more successful. I have been able to be in rooms by being just this. Not like changing, or becoming something else. I think that, that ultimately is what leads to success. I remember once reading Warren Buffet talk about the fact that it's really hard to be original. It's super hard. To be original means that you don't mind remind anyone of anyone they've ever met. So think about the Beatles, or Michael Jackson, or Elvis Presley. Think about Stevie Wonder, think about... There are so many people who fit that mold, they're completely something on their own.
When you think about that, that's what I started decided I wanted to be, my own original self. My own original self was deeply rooted in my gender and my race. Because I think that's what people see first when they see me. So I accept that. And then I say, I'm going to leverage that and fully embrace what they see because it is who I am.
Michael Katz:
Well, you have such a positive mindset, and a view toward the world and trying to change it. How have you kept kind of that sanity during the pandemic, during the social unrest that has engulfed our country over the past... Gosh, I lost count since everyday kind of blends into the next?
Mellody Hobson:
So this is what I was saying I'm a human being, I have bad moments like anyone else. I think what I do is I have great lifelines. I have people that I can call and be absolutely vulnerable, and real with. Hopefully I try to show up that way all the time. But like, "This really happened, this was a setback. This was a really bad day. I was treated very badly by this person. They were super condescending." What I channel in those moments is that they're being that way to me think of how they treat someone they see as less significant. That really, really upsets me. So then what I do is I get resolved and my resolve becomes one of being better and winning. It'll manifest itself in all sorts of ways.
I had a bad week last week actually, with someone who I didn't think was kind, fair, appropriate, and it set me back. It set me back on my heels for a minute. The next morning I got up and I was running on the treadmill, I was running so hard, so hard. Because I just was in my mind saying I will not be pulled back and taken down by this spirit, or this attitude, or this way of thinking, or what this person is projecting on me. All I could do is run. I couldn't change his mind, I couldn't make him a better person, I couldn't resolve myself that somehow he was going to be better than the next version of Mellody. But I could just get stronger in the moment in terms of what I was going to do to prove him wrong. I don't know how else to think about these things. I had a couple of people talk me through it, that I called on the phone. John Rogers was one.
So it's nice to have a moment to commiserate, but no long standing pity parties, you can't do that. So I got back up because that's what we do. I was listening to that letter that Joe Biden wrote to himself. It was on CBS this morning. He said, his mother always said to him, "When you get knocked down, get back up." I got a little choked up because I was like, "That is what we do", as women, as people of color, that is the history of 100s of years of our ancestors. That is what we do. So the words that were said to me last week are nothing compared to the suffering that my community and my gender has had.
Natalee Graham:
Amazing. Well, I know that we're coming close to the end. So quickly let's just wrap up. What are your thoughts in hope for the future of the world? I know we talked about the next four years, but where do you see this all? Where do you see women and people of color, all the things, the sectionality that goes on and their advancement? Just us coming together as Americans, and as individuals in particularly in corporate America?
Mellody Hobson:
So my vision is one day, we won't even have panels like this. That people won't even know what you're talking about. Why do you even need a conversation like this? That society will be a truly open and fair place. Now these are obviously not realistic goals for the short term. But over a lifetime maybe as Barack Obama or I don't know who else said, the arc of history bends and some times it drifts back." But the course of history has been in the right direction. It just hasn't always been as fast as we all wanted it. So we must be pleased with Kamala being Vice president or I should say Vice president Elect. It should not sound that familiar, but never satisfied. If we live in the never satisfied space, we will make progress.
Natalee Graham:
That's amazing.
Michael Katz:
Mellody, thank you so much for your time for your inspiration. Hope to have you back in the not too distant future and hopefully live next time.
Mellody Hobson:
but thanks for having me really, really appreciate here.
Natalee Graham:
No problem.
Mellody Hobson:
Good luck both of you.
Michael Katz:
Thank you so much.
Natalee Graham:
Thank you.