Webcast transcript:
Willy Walker: Thanks Susan, and good morning to those of you in western time zones and good afternoon to those of you on the east coast. It's a real pleasure and honor to have my old friend John Rice joining me today on the Walker webcast. Johnny is the founder and CEO of Management Leadership for Tomorrow. Prior to founding MLT, John worked for the National Basketball Association, where he was the Managing Director of NBA Japan and director of marketing for Latin America.
Prior to the MBA, John worked for Walt Disney, where he was in the strategic planning group. John went to Yale where he played varsity basketball and to the Harvard Business School. He is married to Andrea Rice, who also went to Yale and then to Stanford. He has a son Tao who is playing basketball at Yale, and a daughter, Kiki, who has the Women's Basketball World on pins and needles, as she decides where she will take her number two college recruit ranking and play next year. Johnny sits on the boards of trustees of Yale university, Open Door and Walker & Dunlop.
J.R. it's awesome to have you on the webcast again after joining me summer before last.
John Rice: It's a pleasure.
Willy Walker: Let's start with a quick speed round. I need one-word answers. Are you ready to go?
John Rice: I can't promise one word.
Willy Walker: It’s got to be one word. Here we go.
John Rice: All right.
Willy Walker: You are Emmett John Rice, Jr. Did your parents ever call you Emmett?
John Rice: No.
Willy Walker: Did you ever win the cup at St. Albans field day?
John Rice: Yes.
Willy Walker: Oh, my son Wyatt did, too. If you said no, he said I got to throw in their dad that I won it.
You were in Latin America studies major at Yale. What was the first country you ever visited in Latin America?
John Rice: Venezuela.
Willy Walker: Was Section D the best section in the HBS class of 1992?
John Rice: By far, I’ll call it one word.
Willy Walker: This one is from my wife Sheila. Have you ever beaten your wife Andrea in any racket sport, including Whac-A-Mole?
John Rice: Yes, and that would be ping pong.
Willy Walker: Well done. I have yet to do that. Were you in the now somewhat infamous strategic planning group at Disney?
John Rice: No.
Willy Walker: One word to describe former MBA commissioner David Stern.
John Rice: Brilliant.
Willy Walker: Who's better in hoops? You or President Obama?
John Rice: Me.
Willy Walker: What's the only publicly traded company to have two Yale board members on its board?
John Rice: That would be Walker & Dunlop.
Willy Walker: Last, but certainly not least. Where is your daughter Kiki going to commit?
John Rice: No comment.
Willy Walker: You can't say no comment.
John Rice: Don't know. That's the truth.
So I will say, she's got five great options. She's got it down to five schools that we visited. They included Arizona, UCLA, Stanford, UConn and Duke. We're leaving it to her to make her own decision. We're trying to be good consultants, and I think she's just got to figure it out over the next couple of weeks. But they're all fantastic options. We were good high school athletes, Willy, and we would have both, I think, probably trade away our families for these types of recruiting options. So I'm letting her enjoy this. She's worked hard for it. We'll see where it goes.
Willy Walker: It's just, fantastic. So Johnny, in your sister, Susan's book, Tough Love. She dedicates the book to your parents, her family and to you. In thanks to you, she says and to my brother Johnny, who has never let me get away with anything.
So the question to you is, why are you so good at asking a hard question?
John Rice: Willy, as a consistent viewer of your webcast, I probably should be asking you that question, because you’ve become the guru of asking the tough questions, and especially the questions that people were anticipating.
But I'm going to give you a... what's a prepared personal answer to that question, which is, since I was a kid, I was always a believer in the theory that every individual has a unique intellectual or physical gift. And a lot of life is really trying to figure that out, what that might be.
And I've spent literally decades on that journey to discover what my unique gift or some people call genius gifts might be. You know, I felt that I was pretty good at a lot of things, never thought I was great at anything. And so I was passionate about figuring it out. And finally about ten years ago, a good friend of mine, somebody you probably know, a great CEO himself, Tom Monaghan, used to run Corporate Executive Board, now CEO of Devry University, we were at a YPO retreatand he and a few others we're really digging into this issue of a genius gift and he helped me. I think he helped me discover what it was. And he said, “Johnny, I think your genius gift is the ability to see other people's gifts with more clarity than they do, and often before they even see them.” As it turns out, I think that's very much aligned with the work that I do with a passion and the work our organization does about coaching people toward their career potential. But with respect to Susan, we have very close relationship. And I've always pushed her. I think probably more than anyone else, because I tend to be able to see her gifts. And I will call her out when I feel like she's undershooting. And then I think lastly, in an organizational context, I think you probably agree that the hardest questions often lie at the intersection of people and strategy.
And so if I can read people and see things that others don't, that sometimes enables me to unpack how they approach decisions and push them in ways that others may not be able to. That's my perspective. I don't know if you buy it, but that's where I come from on that.
Willy Walker: I clearly buy as someone who has spent a ton of time in the boardroom with you and watched how you ask questions of me as well as the other members of our management team. And there's no doubt that a lot of those skills have not only been built up by you. I mean you talked about the comment of Tom in the last ten years, but you had those skills well before as it relates to asking good questions, but also trying to bring the best out of people as far as teams.
So your personality is one that is not terribly confrontational, but actually very collaborative. And it makes me go to questioning a little bit on, your upbringing in the relationship you had with your grandparents. The story of your grandparents, on both sides of your family, are incredible. But for a moment, I want to focus on the Dicksons. And your grandfather immigrated from Jamaica to the United States, I believe in 1911. And your grandmother joined him soon thereafter. And your grandfather was a cobbler by profession in Jamaica. And when he got to the US he was injured and therefore couldn't continue forward as a cobbler and became a janitor, and built an incredible family in Portland, Maine. I believe in the 1930 census, they were 250 black people in the entire state of Maine. Your grandfather and grandmother Mary built an incredible family with five kids, and you and Susan used to go up there in the summer time and spend time with them.
Talk for a moment about your grandparents and what that was like, spending time with them in Maine and some life lessons you learned from them?
John Rice: I think my grandparents were special people and my grandfather, he and my father have always been the people in my life that I've admired the most. The answer that will... I'll skip generations to my parents for a second to give some context on this. As you know, Willy, Susan and I grew up in a broken home. Our parents divorced when we were young. They were great people but never should have been married and were terrible to each other. And over the course of a breakup in years of custody battles and so forth, there were very few positive things that my dad would say about my mom, or her family and vice versa.
But the one that stuck out at me, which really put it on perspective was that my father, okay, the only person that I've ever heard him refer to as a great man, was my grandfather, my mother's father. And that was because he appreciated his story, the story you started to tell. Immigrating from Jamaica, being told he would get a job as a cobbler, given somebody's name, never find that guy and going back and bring his wife over.
And with a sixth grade education and no money, figuring out a way to raise five kids, send his four boys who are older than my mom, the youngest, four boys all to Bowdoin college on full scholarships. And my mom would have gone to Bowdoin too, but they didn't take women. So, you know they sent her to Radcliffe/Harvard, which wasn't a bad deal for her, on a full scholarship. And they, you know, my grandmother was a domestic worker, and turned out just they dedicated everything to around what I would call… These were people. And my father's side as well, who really set the stage for my parents to achieve the American dream. My grandparents arguably did not fully, but my parents, because of what my grandparents did for them. It's a fantastic story on both sides of the family and my grandfather, when I was seven years old, taught me how to swim in Sebago Lake. I never forget those moments. And that guy, he died in 93. He was gardening to the day he died. He just happened to slip down the step base. Otherwise, he would have lived a good life until he was 100 +. It was a story about resilience and a story about determination and a story about tough love. That guy didn't play around. If he would see me talking back to my mom a little bit, he would start to move toward the bathroom and get his razors strap and threatened to take me outside.
I never allowed him to go there, but that's what we were all about. And that's what it took, I think, to do what he did and raise the kind of family. He never owned a car. But somehow, he always found a way to focus on most important things. And at least present to me, a life that seemed reasonably comfortable.
Willy Walker: There's something about the long-term view that your grandfather David had and your grandmother Mary had that I just want to probe on for a moment. You just set the stage as it relates to how your grandfather came to the United States and, if you will, what his station in life was at that time?
The day, your Uncle Leon was born, your grandfather who didn't have a lot of means set up a savings account to send him to college. Now, there aren’t a lot of people who are struggling to make ends meet who when they have their first child go and set up a savings account, thinking forward 18 years that there are needs to be money in the bank to send that child to school.
And, I guess my question to you is, what was it in your grandparents that made them think so far ahead? Was there something about being immigrants to the country? Was there something about being such a very significant minority in the state of Maine back in the early 1900s that impacted their kind of long term view on things, because as I understand them as people, there is something incredibly noteworthy as it relates to the way they looked at investing in their family in their future.
John Rice: I think the best I understand is that somehow both my grandparents had what I would call magnetic characters, magnetic personalities. They were incredibly humble, hard working, bright. And somehow people just wanted to help them and specifically give them advice. So I think my grandfather, in particular, was just a fantastic, absolutely sort of acquirer of great advice. And there was somebody who gave him the advice to think about his kids' futures in a in a very long term way and something gave him the gumption to believe he could do it.
This is somebody, you know was essentially... when one of my other uncles passed away, at age 35, he had also gone to Bowdoin. I think the federal government gave us... there was a, maybe ten, fifteen thousand dollars that the government gave to my grandfather, you know gave that to Bowdoin College and set up a scholarship fund for minority students. I mean, unbelievable.
So there's something there. One of my favorite stories was, probably well for my nother was born, my grandfather, one of his side gigs was tending bar at Bowdoin reunions. This had to be in the 20s. When he's tending a bar, he overheard all these allums coming back. They were obviously... had a few drinks and then, they were talking loud and they were saying how great and experience this was looking back and reminiscing. He's like, I need to learn more about this. I need to send my kids to some place like this. And he did it. And he figured out. It's just a quintessential story of somebody who not only was determined, but also built the kind of relationships, somehow at that time, with people had very little in common with him that ended up giving him great advice and he was able to follow.
Willy Walker: I believe I'm correct that your grandfather was made an honorary member of the class of like 1912 at Bowdoin, because he was the first person to have had four boys graduate from Bowdoin.
And back then, as you said about your grandmother, she couldn't... As your mother couldn't go there, because it was not coed until I was surprised by early 1970s was when Bowdoin actually went coed. Your grandfather also was determined to get your mother into Bowdoin, and he called up the President of Bowdoin and said I've had four boys go there. You need to take my daughter and the President of Bowdoin said we're not ready to take women. So she's going somewhere else. And as you said, she ended up going to Radcliffe/Harvard. But there is something just unbelievable about back then setting up that scholarship.
Let's flip to the other side of the family, Johnny. And your dad grew up... was born in South Carolina. He ended up going to City College and then on to Berkeley to get his PhD. While we're talking about families, one of the things that I found to be so interesting and instrumental is just on both sides of the family, the focus on education.
That if you think about where both sides of the family put emphasis, it was really getting good grades and doing very well academically, which would then give you the upper mobility that they were also desiring of. Is that, I mean on your mother side, it seemed to be that the two things were education and service. But on your dad's side, it really did seem to be education. There were also a number of pastors and preachers on your father's side of the house. Talk a little bit about your dad's growing up in South Carolina.
John Rice: Just to close on my mother's family. So, my mother, you know, she talked about service and education. My mother went on to do dedicate her career to educate, higher education policy, and she was one of the architects of the initial Pell Grant legislation that's put millions of low-income students into college over the last many years. And she's often referred to as the mother of Pell Grant.
So something that my grandparents gave to her embedded the importance of and dedicating her career to helping other people, and especially around education, in particular. And my father, you know, he grew up in the Jim Crow south in the 20s.
You know, my father, both my parents died in the last ten years. If my father is alive now, he'd be 101 or so. And in the Jim Crow south, there just wasn't... Everything, the prism of life was all around race. OK, what you could and could not do. And he found a way. His father died when he was 7 years old. A few years after his older brother moved to New York, he moved to New York to be with him. That's how he got to City College. And he just, I think was on a path to get away from the Jim Crow south. And he found this, and so after, in between college and going to grad school, he served in World War II and in Tuskegee with the Airmen.
And after that, his view was, I've got the only way that I can kind of take my best shot from a life and opportunity standpoint, was to try to get the best education he could and remove the kind of easy excuses that other people would have to deny him opportunity. And that's what took him out to California where he studied economics and got his PhD. There's a lot in between there, but I think it was really about escaping what the tentacles, the vestiges of slavery and Jim Crow and in a search for the ability to kind of achieve his dreams. And that was sort of his mindset. And part of the path – he’s a brilliant guy. And the path was to acquire as much knowledge as possible. My father was the closest thing I've ever met to a renaissance man. He knew so much about everything and he always push... You know, if I asked what something meant, he'd always tell me, go look it up. Always focused on acquiring knowledge and being informed about the world.
Willy Walker: So when I hear about the Dicksons and the Rices and your grandparents who immigrated to the United States, versus those who were brought here by slavery, talk about how their outlook or their views were different given that background.
John Rice: Yeah. I think on my mother's side, it's sort of the classic immigrant story. My mom grew up in Maine where, as you mentioned, very, very few people go. So by definition, they had to engage with the only path to a better life, was through white people, essentially white institutions or people taking an interest in you. And, they were great at impressing people and finding opportunity. My father story is very different and it was really about growing up only around people of color, only around black people. And because it was the Jim Crow segregated south. His path was largely about trying to figure... trying to find a way to experience a different America.
And that wasn't easy and was really all cast in the prism of race and racism. As you know, he served down in Tuskegee with the Airmen. And he would tell me the story that like, after he got out, when the war ended, there were German POWs who are reloaded here to the United States, okay? They would come to where he was and be able to be served and accepted at restaurants, hotels everywhere. But he could not be served. And that was just so hard for him to internalize and to process.
And I think that's what led him to California where race, again, it was obviously important undertone, but at Berkeley, that's where he felt a level of freedom to engage more around his intellectual pursuit. And he built some very strong friendships. His best friends in life came from the folks who were studying in graduate school at Berkeley and his best years in life were there. And so the last thing I'll say on this one is while he was studying, getting his PhD at Berkeley, I think it was like a Fulbright scholarship. He went over to India for a year. And that was transformational for him, because over in India, what he saw was that this race thing, mostly what he realized was most of the world does not view race as a determining factor in what your opportunities are. India had other things do with cast and religion and other things. And what he realized that the Aha moment for him was that this racism, this thing that he's been dealing with, it's United States things, not the way the most of the world actually acts. And that enabled him to realize that racism is actually not his problem, but it's actually white people's problem. Okay, and allowed him to kind of free himself from the shackles of believing that it was his problem and that he was inferior in some way. And he would always tell me say Johnny, look, one of the most important , the most vicious components of racism. It is not that white people, it's not just that white people, some white people may feel superior to you. It's actually goes deeper than that. Part of the goal is for us to feel inferior to them. And it wasn't until he got over to India and then came back. He kind of realized that that this was all a sham, and that allowed him to view life a little bit differently going for.
Willy Walker: One of the interesting things about that time at Berkeley that I thought was so interesting about your dad was that it wasn't until he lived in International House, where he was in with a bunch of international students in that trip to India, obviously had a huge impact on him, but being in the United States, but on the Berkeley campus, living in international house with international students, made him feel like he actually was part of a group that was somehow more well received. Then if just being a black American and that by being with that international community, people looked at him differently. And he felt for the first time that he could actually, if you will, live in his own skin, because he was in that multicultural multi ethnic international house and not just in a...having a black roommate, having to figure out who you would live with when he was at City College or everywhere else he'd been in his life.
John Rice: I think it just opened him up in ways, and I think it had some influence on him going out and venturing over to India as well. But all that said, he would tell me stories about how he and his friends and they love jazz. And they would try... There were some of the major jazz bands would come to Berkeley. Sometimes they would get in to the places they were playing. Sometimes they wouldn't because of him.
And when he finished his PhD he was looking for a job. And even back then this is the 50s now, he applied for a job at the... I think it was the San Francisco FED, and they said, wow we love your background, but can't take you because you're black. It's only because of a referral, from a fellow PhD student, he got a teaching job in the economic department at Cornell University, Willy, in the late 50s. This is before the civil rights movement. This is, I'm sure that I don't know this fact, but I can't believe that there were other black faculty members in Ivy League Universities at that time. Maybe, maybe not, I've not done the research, but the point is, some faculty member referred him and said you need to hire this guy. He didn't tell him that my dad was black. So they hired him signed unseen and he gets to Cornell. And they were like, wow, they were pissed. But they couldn't do anything at that point. It was so fascinating story. And that's how he began his career. So that's really what it took.
Willy Walker: Yeah, so to the next generation of your mom and your dad, both extremely successful. Both of them, your mother working for the college board, and serving on multiple corporate boards going forward. Your father becoming a governor of the federal reserve board, and setting all sorts of, if you will, what I would call it, it's probably the wrong word, but records in the sense of breaking down racial barriers. As you just said, going to Cornell and teaching at Cornell, I think, for seven years, and then continuing to teach and then becoming the first regional manager of a large bank in the Washington area, and then being appointed by President Jimmy Carter to the federal reserve board. And being, I believe, only the second black governor of the federal reserve system at that time.
There's a quote from your mom that was, “never use race as an excuse or an advantage. Just best them all.” Your mom and dad clearly lived their professional careers in that. And you and your sister Susan have both carried that on throughout your careers. What was it in watching your parents in their professional careers that motivated you the most Jjohn to study as hard as you did, create the career you've created? We'll get to MLT in a moment, but then get off the corporate path, if you will, and go back and become the social entrepreneur that you have become.
John Rice: Two things we mentioned on my mother's side and my father’s side. For my mom, you mentioned that quote, “never use race as an excuse or advantage”. She was fiercely competitive, but I think one of her gifts was that… And this had to have something to do with her upbringing in Maine. I don't know what, but it she really didn't care what people thought. Okay. And that's how she lived her life. And she didn't have the burdens that my father had, where he was focused on, how he was being perceived and what was working against him. My mom somehow didn't have that constraint in her mind, which most people of color do. And the thing that she always pushed me to do from the beginning was to focus on how you can have impact. Right? And I knew I wasn't the most focused person, in terms of, like when I was, I think Susan was probably well more focused than I was in terms of her career aspirations. But I wasn't sure what I want to do. But I did know that I wanted to focus my life at some point on impact relative to other people. My parents, they lived the quintessential American dream, and they put Susan and me in position to focus on most of our energies. We had some tough times, but most of our energy on developing ourselves to our potential, and also figuring out a way to have impact on others. And it all came full circle after working several years at Disney, becoming an executive at the NBA. On the side, nights and weekends, while I was at the NBA I was working on this, kind of piloting this nonprofit, had one or two people working on it full time and raised a little money. But I was kind of doing two jobs. And I knew, after a while, I knew the potential that it could happen. I finally realized that the potential was really a function of my ability to dedicate myself fully to it.
But my mother told me, and she always pushed me. I think this is unique. And we've talked, you may have your own stories about this, too. She said look Johnny, she said, if everything fails, if you leave the NBA and you dedicate yourself full time, it all fails, I was recently married, if your marriage fails, everything fails, right? Everything goes wrong. You can always come back home to the little room in the house that you grew up in, right? And that ain't that bad. Right? So she gave me an incredible gift by helping me understand that the worst-case scenario, the reason you go to all these schools, you say you have a backup plan. She helped me understand the backup plan. What was that? Wasn't that bad? And that gave me the confidence to leave a sexy job to toil in obscurity for a countless number of years trying to build a nonprofit organization. That was really important.
And my father on the other hand, I’ll just add quickly, he would always encourage me, Willy, to take a bold shot at changing the circumstance. Some impact on the circumstances that black and brown people have in this country from an economic standpoint. He was an economist, and he kind of came to the conclusion that the way to move the needle on race and racism had to have included economic levers. He was a practical guy and he finally said, look... he told me, he said, people aren’t going to wake up with a completely different mindset in a new day. So, what you really have to do is, yes, you have to be the best you can, and you have to demonstrate that your confidence, but you also have to think about how do you help people of color expand the economic mobility, economic power to influence that ultimately will increase the cost of racist behavior. Not change what people maybe thought, but actually influence their behavior by making it harder for them to take racist actions. And that really stuck with me. And I have to agree, I have to admit that has had some influence in our theory of change at MLT, what we do and just ironically, Willy, the work that we do, working from college to throughout one's careers. It's really builds upon my mother's legacy, which was focused on helping low to moderate income students, white and of color, get into college and afford a college education. So it's kind of fall into... It makes some sense. I can't say at all that it was linear and I was thinking about it that way. But it's interesting to see how things play in retrospect, how they connect to each other.
Willy Walker: Your story about your mom saying if you go out and do it on your own, you always can come back here and have a roof over your head and a warm meal. When I was speaking to a group of MLT, I guess there were both a combination of alums and actual MLTers at the time in New York, probably. John, this must be five or seven years ago. And after I spoke, one of the women in the crowd asked me, how is it that you have been such a successful entrepreneur? And I've never thought of myself, much as an entrepreneur, more of just a business manager and leader, if you will.
And it was interesting question to me, and I kind of paused for a moment and she said, you just told us that you moved to Latin America. You just told us that you launched an airline, and you just told us that you moved to London that you did this and you did that. You've been very entrepreneurial in your career. How did you have the wherewithal to go do that? And I looked at her and I said, and this is in front of 350 MLTers. I said, I think the reason I did was because my parents told me that if all hell broke loose and I went to Paraguay and lived in Paraguay or in Argentina or in London, and I failed that I could always come home and I was going to have a roof over my head and I was going to have a hot meal.
What was so interesting for me was I looked out at this group and some people in the audience sat there and I could tell that they were like, oh, I've got that. Then there were lots of other people who looked at me with this blank stare of sort of, I don't have that option. I don't have the ability to take those kinds of risk because I'm on my own. Because I've got to go and I've got to succeed. I've got to make money. I've got student debt. I've got all this and other stuff. And obviously, I played a little bit into what was going through their mind by giving that response. But it was very interesting to me in the sense that parents giving their kids just that core sense that if you go out and fail, you can always come back home. It's such an amazing gift that both you and I got from our parents.
John Rice: I think that's people talk about social capital, which is critical, relationships. But that's the... I like to use the word in the importance of having that confidence you belong. Right? And that's what often white people have in the workplace that people of color, when there are one or a few, you just don't have. You're touching based on is something that is also so important, especially when it comes to risk taking as in one's career as an entrepreneur, social entrepreneur, what have you. If you've never had a sense of a backup plan, if you never had one, right? Or I should say, having one and seeing it be modeled and being told that, is transformational. And that's why the kinds of people at MLT that you were speaking to, that's why they should be taking more risk. Right? But it's very, you know, if you haven't had that in most of the students that we work with are low, moderate income students, that have never been told that. And if you tell them that they will not believe it, because it's never been modeled. That is a huge obstacle to overcome and should not be underestimated.
Willy Walker: So real quick, let me give a quick background on MLT so that people who are listening understand what MLT is up to. And then I want to dive into real issues that you're working on today, both well before George Floyd's death, and murder, and then subsequent to it and how things have changed both pre as well as post. So right now, you have about 2,500 fellows per year in your program. You've got about 10,000 rising leaders who are alumni of MLT you've got 200 corporate partners that are companies like Walker & Dunlop and McKinsey and JP Morgan, a bunch of others that they both fund MLT and then bring MLTers into their companies. Give them work experience. And then they often will go back to graduate school and then potentially come back to them or go on to other organizations. You've got an annual budget of $60 million of revenues and fund raising, and you've got about 200 staff at MLT.
So, John, there's no doubt that you've and MLT have had a huge impact on this what I would call cohort of high potential minorities, predominantly black and Hispanic, and giving them mentoring and coaching as they head into the corporate world that will give them the ability to make decisions about whether they want to go back for a graduate degree or continue forward in their career, how to find mentors, how to find resources, and how to feel like they belong and have a membership into something that is the MLT family. Broaden on what I’ve just said as a quick summary of what MLT does.
John Rice: We focus on advancing racial equity in this country with two lenses. The one that you just talked about, which is the individual lens, putting more economic mobility, economic influence in the hands of people of color. Helping them go from college to that first job that closes the deal on economic mobility for them and their families.
We talk about Pell eligible students which most of ours are, making $50K or below. 95% of our folks get jobs that average $75K right out of a college starting salary. That's immediately game changing. We provide the coaching and the high performance play book and the social capital to help advance key threshold all the way to the senior executive suite. 10,000 total about 300 or 400 now, are already senior leaders. And our goal is to have over thousand senior executives working for high impact organizations in their communities.
On the other side, institutional side of our work. You mentioned work we work with 200 companies. But the goal here is to help organizations take a much more rigorous approach to advancing racial equity. To help them widen the road for people of color. Help reduce institutional racism and to help them move the needle on all aspects of DEI. So we have, as you mentioned, we source top talent for 200 organizations -- campus, lateral, now senior talent. We help organizations retain and advance the talent that they have, sending their mid-career folks to us for that kind of safe place, coaching that you only get when your senior executive bring that down to the mid-levels where people need it around key promotion thresholds. We have a whole advisory. One of the fastest growing aspects of our work is like essentially consulting arm, and advisory arm working with organizations. In the C-suite on "How to Strategies and Tactics" of getting to a critical, massive diverse talent. And we more recently, just last year launched an offshoot of that, really, which is a racial equity certification that establishes an absolute standard for racial equitable workplace practice.
So two lenses on our work. We think that our theory of changes, if you put more economic mobility in the hands of people of color, if you decrease institutional racism and make our workplace more equitable, then that's actually the critical element. Going back to what my father said to address the persistent inequities. Racial equities not just in our institutions, but in our society more broadly around health care, around policing, around wealth gaps and so forth. And if we have more people color on the same economic mobility trajectory, if white people are working side by side with people of color in their workplaces, if they see leaders that are of color outside of sports entertainment, then that's what actually changes the narrative that white people have about people of color. And that translates into the white person, no longer being scared of the black person walking down the sidewalk in a hoodie coming toward them. That's how you change the narrative about race. And that's how you also increase the cost of racism. So we're really focused on advancing more racial equity, more broadly in the United States, but with a very tight focus on the economic level. And doing so in the belief that employers are critical. They're the key pathways for all Americans to achieve their American dream, economic, financial stability, and comfort. And so organizations like Walker & Dunlop and so many others are really important. We often view, it's the government's role or it's the philanthropy sector's role to advance people of color and address racial equity. Well, we believe that employers play a really important role. It's good for business and it's also good for equity.
Willy Walker: You wrote an article in the Atlantic entitled The Difference Between First-Degree Racism and Third-Degree Racism. Give us a synopsis on what you wrote.
John Rice: So my thesis was that there are three degrees of racism. And the most obvious one is like overtly prejudice behavior calling somebody, saying something that's racist, calling the police on a blackbird watcher in New York City, Central Park. That kind of stuff. That's racism in the first degree.
Second one is about failing to, turning ones back or failing to oppose... Turning one's back on meaningful anti racism efforts. And I call that kind of, again, aiding and abetting sort of racism in the second degree. A common example of that is just how so many individuals and leaders and institutions demonize Colin Kaepernick for kneeling to protest racist policing. And they tried to connect him to being disloyal and not patriotic and so forth and had nothing to do with that. Until George Floyd’s murder we didn't really fully appreciate and support that.
But the third degree racism, what MLT is really focused on, actually, is I would argue the more pernicious category. Because it undergrads the everyday black experience, not just for people who are in poverty and for people who are trying to work the way from poverty to a solid wage job. And it underrates a black experience for people who are in high trajectory careers as well. It's essentially when employers or educational institutions, even government entities fail to unwind practices that disadvantaged people of color in the competition with white people for economic and career mobility. That's what I call third degree racism, essentially involuntary manslaughter, which is, we're not trying to hurt anybody, but we create the conditions where somebody's aspirations for the future are shattered.
I believe that eliminating this more nuanced, poorly understood form of racism is the key to expanding economic mobility and power for people of color and to unlocking this opportunity around diversity, equity, and inclusion in our institutions.
And lastly on this is that the reason, this third degree racism is not something that is something, even the most progressive equity oriented white people are just missing, not for any malicious reasons, but there are just too many poorly informed, call them views, that actually lead to the kind of failing to unwind practice that will help people of color compete in equally in our institutions and in society. Saying for example, because people believe that there is no pipeline of diverse talent, then therefore, they don't take a rigorous approach to recruiting talent. Or if people in too many situations operating, as if there is a tension between increasing diversity in an organization and maintaining the excellence-based meritocracy, that so many of our institutions, that has made many of our great institutions successful. So it's really that the article is trying to hit on this third degree racism and focused on what do we need to begin to do to unpack it? In the thesis is, first, we have to be well informed, understand, and diagnosis it and realize that it's addressable and actually start taking actions that will move the needle as opposed to the random acts of diversity that aren't really based in a diagnosis of why we are, where we are.
Willy Walker: And here we are fourteen, fifteen months after George Floyd murder. Have we gone from random acts of diversity into strong, institutional, consistent focus on these issues? Or are you seeing some of those immediate efforts that came to the front after George Floyd murder waning?
John Rice: I would say, whatever fifteen, sixteen months after, there has been some progress, I can see, I do see within our conversations with companies, the momentum waning a bit. But let me step back and say that there was a fundamental shift in the entire dialogue around race in our institutions. In particular, that happened. As you know, after George Floyd’s murder, so many organizations put out very strong and compelling statements standing against racism in our communities and in our organizations, in all forms. It was actually the response that people of color and so many of our institutions had to those statements, well-intentioned powerful statements that actually has led to the very forward leaning kind of actions and a higher level of rigor and discipline and urgency around moving in on racial equity. What happened was, people of coler stood up and said, hey, we appreciate those statements. But our lived experience within our organization actually is fundamentally inconsistent with what we're saying externally in our values relative to race. And that was an Aha moment for CEOs and senior executives. They realized that what they had thought was a little different than was actually playing out. Meaning they realized if there's racism inside our organizations. Okay, people feel that. And, we're actually saying we stand against racism. Then if leadership doesn't move the needle on racial equity within our organizations, then we're standing on the wrong side of the race, then we can legitimately be called racist. And so that's unacceptable that elevate to an enterprise risk level. And that's where you saw a lot of movement.
And so what I've been very excited about, Willy, is a level of urgency and around moving the needle, trying with a lot of organizations, saying we need to kind of move from a let's do better than last year level of rigor with respect to our approach to moving the needle, to an approach that actually applies the same level of business rigor that we assume and apply to every other part of our business. And the accountability that comes with that.
The challenge there is that there are too many companies that right now, too many leaders that actually still believe that this is a moral equity issue. This is about the right thing to do, as opposed to taking a business equity mindset, which is, let's understand why we are where we are, why are our own staff, and their white colleagues raising those issues around the lived experience. Let's figure out what we need to do to move the needle. And let's approach it with the same level strategic attack where we do everything else. And we've tried at MLT really tried to help to catalyze and apply to rigor, both with our advisory work that we do one off with organizations on, like any other consulting firm, but also with a racial equity certification that we launched about a year ago, called "Black Equity at Work", which will be adding at next equity work down the road actually next year. But the point around black equity work, which we can dive into if you like, is really to establish an absolute for the first time, an absolute standard for what good looks like with respect to racially equitable workplaces, akin to the lead standard environmental sustainability space. And it's really about trying to move the space from a kind of a good intentions, but lack of rigor, to a comprehensive approach to move the needle holding ourselves accountable in the process. And one of the things that we feel was really important, given where the world, where leaders and organizations are, they're struggling to figure out, what to do, how to do, so we said, essentially, let's create an onramp that every organization, regardless of where you are in the journey, whether you have zero diversity or you're making a lot of progress, create an onramp for every organization, which is developing a rigorous plan. And then we would help them with that plan, but that plan would be approved based on rigor alone, not where you are. And then giving organizations three years to make progress against that plan toward level of certification, built around a blueprint that we designed in conjunction with the Boston Consulting Group and number of other firms that really cuts across people, purchasing, suppliers so forth and philanthropy. So very comprehensive blueprint but really focused on providing that support and calling organizations in, not calling them out. Supporting their approach and scores are confidential. Collaboration, bringing our insights so they actually move the needle in a comprehensive way.
Willy Walker: As you and I discussed before, I think what you just said is so fundamentally important to this issue of calling organizations in, rather than calling organizations out. I think that as you and I have discussed previously, issues of race are so sensitive. They are so charged that there is a sense that those who have momentum towards it or having progress or have been focusing on these issues, pre-George Floyd, this has been a great opportunity for companies to lean in on it. And if you're like, Waler & Dunlop who have been working on these issues ahead of George Floyd, we just did more and we leaned in more and we created more specific plans and we've been running with it.
John Rice: I do not want to interrupt you but I do want to talk about that. I'm sorry, go ahead. I'm just saying the context, we've got... Walker & Dunlop is one of 50 great companies that have signed up, committed employers that just in the first year, these are organizations who are not far from where they want to be on racial equity but our demonstrating their leadership in terms of commitment to rigor. People in the health care space like DaVita and Abbott. In the media and entertainment space, Warner Media, Fox media, Viacom. Finance players, Bain Capital, Blackrock, State Street and so forth. Major consumer brands Target, Starbucks, Nike, Peloton, one of your favorite brands, and the NBA, law firms and even consulting firms like Deloitte and BCG. The point here is that you all, as one of our employers, that has gotten there to finish their plan, got into that plan approved stage. But you've also taken it farther at Walker & Dunlop and I think it is important as relates to help people understand what you're doing, because it's not just instructive Willy, I think it's groundbreaking with respect to public disclosure of your efforts and plans. Our efforts and plans as a director.
Willy Walker: I know, as a board member, I guess you're on it. But there are just a couple quick things that I would say, because I was going to get to... You all calling people in and not calling people out is hugely important. Because as I was going to say, those companies that had momentum towards these issues, but maybe not doing enough which we clearly weren't, but we had real efforts on it. This was the opportunity to lean in. A lot of other companies that were not moving down the right path. At first sort of felt like they had to say something and then all of a sudden said oh, we're not good on these issues so maybe I just continue to ignore them rather than focusing on them. And I think this certification that you're putting out there gives companies the opportunity to create a baseline. To say we're either good, bad and indifferent on these issues, but we need to be better. And we need to get a baseline like we all do in all aspects of our business.
So to your question really quickly on W&D, we first of all, I've yet to hear someone say that there is another company that's done this. I'm waiting for someone to say you're not the only one, but we did publish in our 2020 proxy, which came out in 2021, our D&I goals for 2025. We have very explicit goals on diversity and inclusion that we are driving towards between now and 2025. That are in our proxy statement. And my compensation and the compensation of other senior executives at Walker & Dunlop is based upon achieving those D&I objectives.
Let me take it down one level from that because publishing in the proxy was, I would say, innovative and also very much tells the world we're up to and holds our feet to the fire over the next five years. But we hired 220 people at Walker & Dunlop during the pandemic. 220 people from March of 2020 to March of 2021. I sat down with our head of HR and looked at the stats on what we were doing from a diversity standpoint, and we failed.
So here we were putting in our proxy statement this is where we got to go. But from our hiring of 220 people we did not meet the gender or ethnic racial diversity issues that we wanted. So what we then said was, hold on a second, how do we measure financial results? We do a monthly financial review. We do a quarterly financial review. We also have KPIs from an operational standpoint that we always look at in that financial review. Now, a third element of our monthly financial review and operational review is a diversity and inclusion review. Now, when we just got done with our review of our September numbers, we go finance, we go Ops, and then we go diversity and inclusion. We're reporting out on a monthly basis of what we're doing from a hiring standpoint to meet those 2025 goals. It's interesting because I've had plenty of white males at Walker & Dunlop come up to me and say, is there opportunity at Walker & Dunlop for white males?
If you think about our top 20 wage earners at Walker & Dunlop, top 20 wage earners 91% male so only 9 % female, and 94% white. So 6% diverse. And we're trying to drive both of those to 15% and 15% by 2025. And guess what, every white male who's in our top 20% wants to stay in our top 20%. So we, as a company, have to do things to invest in women and minorities to give them the opportunity to get into that top cohort. And so unless we're mindful about it, unless we have a big goal that's a 2025 goal and unless we're doing things daily, monthly, quarterly, yearly, we're never going to get there. So, one of the things that I would just conclude on this, John, is that having you on our board, having the insight that I'd gotten from knowing everything you're doing at MLT. Having gotten out there and put out some really ambitious goals on this, even with all of that, without tracking it on a monthly basis, we weren't delivering on what we wanted to do. I had everyone in the company, including my board of directors bought in on this. But until you institutionalize it, implement every single day, track it, track it, track it, like we do EBITDA margins, like we do sales, like we do client coverage, all of those things. It doesn't get done. I would just back up to your previous comment, which is that I've been running Walker & Dunlop for seventeen years. These issues have always been important to me. seventeen years later, we are not nearly as diverse a company, as I would have liked us to have been today. That's not because I didn't have desire or a good heart in this space. It was because we didn't implement it in building our company, like we implemented revenue growth, and net income growth.
Now it is part of our business practices, and I have no doubt. We had an ERG meeting a couple weeks ago, and a number of our minority employees asked, Howard Smith, our president, what happens when we don't meet those goals? And Howard looked at him, guess you haven't been around Walker & Dunlop long enough, because we don't establish goals and not meet them. We'll hit those goals, but it's going to take a lot of work, and it's going to take day to day management of it.
John Rice: You just hit on the number one insight from an institutional standpoint that I've gained over the last twenty years of building MLT, which is, living and breathing example. Only when you apply the same level rigor to move a needle on the DEI that you require in every other part of your business does it actually happen. It forces the conversations and changes behaviors so that we approach it with the same level rigor. Right? That's all anybody is asking. Okay. When you do apply the same level of rigor, then we know they're going to be setbacks. We all have them. But when you do actually apply the structure and the rigor, people have trust that you're taking it seriously. And that gives you ability to make mistakes and not lose trust. And I think that, if there's one message I can give to folks running organizations out there. That's what it would be.
Willy Walker: Well, on that, because I just looked at my watch and realize you and I have run over. Johnny, thank you for all you've done for W&D. Thank you for establishing MLT and all you were doing for those people who benefit from MLT. Thanks for the friendship over so many years. I look forward to seeing you next week at our board meeting. To everyone who joined us today, thank you. Great discussion. And we'll be back next week with another Walker webcast. Thanks, Johnny.
John Rice: Thank you. Appreciate it.
