It’s the start of another new year and, as so many of us are doing this time of year, I’m working on some goals for NMHC for 2016. My aim is to find more ways our organization can help move the industry forward, making it even more successful over the long haul. This year, I’m focused on diversity and inclusion.
NMHC is the place where apartment leadership resides, as our tagline proudly proclaims. And when I look at our membership, there’s no doubt that you truly are the industry’s leaders. You’ve got fires in your bellies, so to speak, as well as an appetite for risk, focus, follow-through and an ability to learn from your mistakes. Those are core ingredients to success in this business, and if you lacked in any of those areas, you wouldn’t be where you are.
But when I look at our membership, I also see an industry where white males still dominate. True, more women and people of color are moving up the ranks. We at NMHC recognize and celebrate their successes, but they are still too few in our book. We can talk about all the reasons why this is, but regardless, the bottom line is this: Our homogeny is a governor on industry success. Our industry could be more innovative, efficient and productive by being more diverse and inclusive.
I learned this back in the early 1980s when I was part of the team that legendary CEO David Maxwell brought into Fannie Mae to reinvent the imperiled company, which was dangerously close to hitting the rocks and creating an historical bankruptcy.
In 1981, the consultancy firm McKinsey & Company evaluated the franchise. It estimated that the current business course would produce bankruptcy and a $50 billion to $60 billion hit to taxpayers in today’s dollars. The company needed bold action, for sure, but also more than a fair dose of unconventional thinking to save it. To get there, David knew the company would need the creativity of a wide set of skills and backgrounds because we literally had to tear down the old and build the new-from creating mortgage-backed securities and nationally indexed adjustable-rate mortgages to starting a multifamily business from scratch.
As we tackled this mammoth challenge, David was hyper focused on recruiting women and minorities for his executive team. We not only brought in a diverse pool of talent, but we also created an inclusive culture. We threw away the stereotypes that had restricted ideas on who should do what job and all of us were challenged to fill different roles as we reinvented the company. The combination of diverse talent and consistent opportunities for the challenges of new jobs produced unparalleled successes-not the least of which was expanding our business and providing housing opportunities for millions of Americans, including those who had previously been excluded.
Under David’s leadership, Fannie Mae became one of the most successful financial companies in America and was profiled in Jim Collins’ book Good To Great: Why Some Companies Make the Leap... and Others Don’t. Fannie Mae was also honored as one of the most admired companies in the U.S., earning Fortune magazine’s recognition as one of the best places to work. Turnover dropped from a staggering 25 percent per year when we embarked on our journey to under 5 percent annually by the advent of the 1990s.
But diversity and inclusion at Fannie Mae didn’t happen by accident; it was a strategic choice. As Collins wrote in Good to Great, “Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.”
At NMHC, we think about diversity and inclusion a lot-especially when we choose content, select outside speakers and arrange for volunteer members to moderate and speak on panels. We have a Diversity Committee and have benefitted from great leadership from Peter Donovan, who encouraged us to form the committee in the first place, as well as subsequent chairs Tom Bozzuto and Daryl Carter, who also supported our initiative. The committee has provided NMHC with guidance on how to be helpful to our members’ diversity and inclusion efforts, including those who may be struggling in their shops.
Now it’s time to ratchet up our efforts to provide our members with additional resources while helping to strengthen the industry’s pipeline for future leaders. Julie Smith, CAO of the Bozzuto Group and current Diversity Committee chair, has some ambitious goals in moving diversity forward as a central business strategy. I’m delighted to share a few highlights:
- We are in the process of redesigning our Diversity landing page on the NMHC website, making it more robust and visible;
- We have formed a subcommittee on Academic and Organizational Alliances to help strengthen the industry’s talent pipeline;
- We produced a video that will debut next month featuring NMHC volunteer leaders speaking about why they value diversity;
- We are working with the Emerging Leaders Committee to identify collaborative opportunities to showcase and encourage diversity among our “up and comers”;
- We continue to provide programming on diversity issues, including a special break-out session at the 2016 Annual Meeting featuring diversity officers from other sectors;
- And we continue to enhance diversity-related resources available on our website, including articles, videos, research and practical information.
So, as we make our commitment to diversity and inclusion much more visible, we encourage you, our industry leaders, to do the same. Diversity rarely happens on its own; it takes real leadership to make it a strategic path to sustained business success.