Jonathan Reckford, CEO, Habitat for Humanity

Reckford: It is great to be with you all today. Wonderful to be back on campus. I’ve been on your side of the podium. I think it’s been a long time since I’ve been in this room. Both when I was in your shoes a little bit excited, a little bit anxious about what the next steps might be as I got those coveted letters MBA. As Garth kindly pointed out, my education Stanford opened doors for me to have opportunities at a number of major companies. But I would also say, as I look back, the story is not as neat as it sounds in the resume and I’ve encountered, just as all of you will, bumps and bruises along the way, challenges that challenged my resolve and navigating those twist and is turns that come along the way is a big part of our collective challenge. I love my work with Habitat. I feel greatly privileged to get to be a part of this mission and as I look back I can see how all the different experiences along the way helped prepare me, even if I couldn’t see it at the time. I certainly don’t pretend to have all the answers as to what make AS great leader but I can share a little bit of what I’ve observed. Your experiences and your choices are gonna determine your individual journeys but I hope you can benefit a little from what I’ve seen both from the roles of some of the people I’ve had a chance to observe along the way. Like you, I’ve read books on leadership and collected my share of quotes that inspire me. Among those, a clip by leadership expert John Maxwell, who offers this tongue in cheek encouragement. “When you’re getting discouraged as a leader,” said John, ” think of Mosas. He led a million complaining people for 40 years in the desert and never arrived where he was supposed to get. Mosas faced a lot of complaints, criticism, and just plain whining. Some days as a leader I can sympathize with Mosas. I bet if he had to do it all over again make a note to self. Next time don’t tell Pharaoh let all my people go.”>>[Laughing] Reckford: You know, leadership’s hard and I think the more people you attempt to lead the harder it gets. And Mosas is a good example. As Garth laid the groundwork, I’m gonna share today in a context of my personal faith and — because my story doesn’t really make sense without that but I hope, regardless of your own faith perspectives, that the principles behind it will resonate with you today. One of the first lessons — and I doff around leadership — is a common sense one, is the importance of role models. I think all successful leaders identify either individuals or some composite of individuals that they wanna emulate and they may be really great bosses, teachers, counselors, parents. In my case I was blessed both with a mother who had a ferocious sense of justice and was very active in the civil rights movement and a rather formidable grandmother, a woman named Millicent Fenwick, who was a human rights pioneer, a New Jersey congresswoman who encouraged me and my siblings at an early age to think about what we were gonna do the serve the lost and left out in the world. Her words to be useful. Walter Cronkite later called her the “Conscious of Congress. ” I don’t know how many of you have read the comic strip ” Doonesbury,” the — my grandmother’s often referred to for Garry Trudeau’s character Lacey Davenport in the Doonesbury strips and she had a imposing regal presence and prior to her public career she had the unusual distinction of having written “The Vogue Book of Etiquette,” which sold a million copies in 1948. And so in order to graduate to the grownup table in grandma’ s house, you had to be able to sit up straight, hold your fork properly, discuss food problems in sub Saharan Africa, which is both fascinating and terrifying as a young child. And she was intimidating but was also spiritual at her core and almost every time I would see her she would at some point drill in and quote Micha six, six through eight, from the Bible. “He has shown you, oh man, what is good and what does the Lord require of you but to love mercy, to walk humbly with your God?” So act justly, love mercy, and walk humbly with your God. Pretty good marching orders for most of us and that’s become my life verse as well, though it took a long time to grow into that. I didn’t come to Stanford right after college. My original plan of going into — going to law school then into politics got derailed when I discovered I had no actual interest in practicing law so I had to come up with plan B and talk my way into a job at Goldman Sachs. Despite the latest images, this is a tough month for that company. Uh, one of the most important lessons I learned early was from one of the co-leaders of Goldman at that time, a man named John Wineberg, and there were a lot of less senior people in the firm who were caught up in their own power and, uh — but John Wineberg took a personal interest in virtually everyone and he had a deep, personal respect for everybody in the firm and that’s been something that’s been critical to me to watch both for people I was gonna potentially work with or for, or also now when I’m hiring people to see, how do they behave towards the receptionist or the custodian, or people that don’t have potential positive influence for them as a sign of character. And not everyone will agree but to me a sort of core tenet of leadership is that fundamental respect for all people in organizations. I wasn’t a great fit as a financial analyst. I was a poly sci English major with no accounting or finance preparation and had to suffer hard to live up to the idea. I sold myself into the idea that I could learn finance faster than they could teach someone to communicate. I’m not sure it was totally true.>>[Laughing] Reckford: And I found it really intellectually interesting but not very emotionally satisfying and was living in New York City, in Time Square and sort of juxtaposition of walking by these huge numbers of homeless people in the morning and evening against the sort of big mergers and acquisitions and financing deals, uh, I think caused me to do some hard thinking. And I also had a growing sense of a disconnect between the life I’d imagined living and the way I was actually spending my time at that point. And so felt — I’d become very interested in business along the way but felt it needed to go off and have an adventure and was lucky enough to get the luge program and the — no, to put the coaching in perspective, they only qualified because they were the host team and there were some parallels to the Jamaican bobsled team but we did beat the Japanese. So for those of you who know Asia, that was significant. And it was a — it was a huge life experience for me as an emersion experience. I was living in the Korean training camp with all the coaches and athletes and the only other non Korean I got to see was a Russian boxing coach who was also in the dormitory. And it’s sort of unfathomable to most of you a world with no internet, no e-mail and staggeringly expensive phone calls. So really quite isolated from — from all my relationships. And so it gave me a lot of time to read, and think and reflect. And the only westerner I saw on a regular basis was a man named Jim Peterson who was the other luge scholar that happened to be placed in Korea that year and he was a pastor and ethics professor teaching at one of the great Korean universities. And Jim was one of those rare people who had both the intellectual rigor to go as deep as I could go theologically and at the same time — which really caught my attention — an inner peace and a quiet confidence that I think really contrasted I think to my sort of raw ambition and need to impress people. And Jim took the time to get to know me and then made really a quite extraordinary offer. He offered me the — all of his Monday nights for the rest of that year and we ended up spending three to five hours every Monday night walking throughout Bible and doing systematic theology, so I had my private seminary. And I think for some people you all have your own experiences, faith can be sort of a burning bush event. Less so for me. I had to have that integration of head and heart so it was a very gradual process that eventually got me to — S?ren Kierkegaard calls that leap of faith but it was finally — became clear to me that the kind of life I wanted to lead was one of faith and that was 1987 and I think for me hasn’t necessarily made life easier but unquestionably made life better and richer. And so my time at Korea was coming to an end I applied to business schools with the thought — and Stanford was the cutting edge of this — that the skills I could acquire in the business world were desperately needed in the non profit and service world as well and Stanford was very intriguing to me because the public management program was integrated into the regular business curriculum. It — while at Stanford, I got interested in business strategy and how organizations grow. And after graduation, again, you have to choose your job criteria, my most important criteria was to get to Washington, D.C. where my then girlfriend, now wife, Ashley was. So I had a chance to work with Marriott working on new business development in their strategic planning group and had chance to — was enjoying it very much — helped work on the launch of their senior living service, their adult care business, and got married, got promoted, life was good. And then we — it pales in comparison, the S&L crisis hit. So for those of you historians, it was not a great — not as bad as now but was not a great time for the financial world. Marriott actually nearly went bankrupt and made significant cuts that included our strategic planning team and me and it was a little shocking to be laid off. I was newly married and I’d lost my job and even though it was sort of perfectly explicable, it was hard not to feel a little bit rejected. And turned out fine. I was — had the chance to start up a strategic planning group for the real estate arm of Disney which was a really fun and interesting experience. Got to work on great projects and I think Disney taught me a lot about being a fanatic about great customer service which I really appreciate. But there was another side of Disney which I appreciate a little less and that was sort of the Burbank studio culture at the time and one of the former execs I won’t name was very well known and behaved for quotes like this, “If you don’t come in on Saturday, don’t bother coming in on Sunday.” Or –>>[Laughing] Reckford: Or a little more frightening, though humorous, ” other companies do good cop bad cop. We do bad cop Antichrist. .”>>[Laughing] Reckford: And it was not good to apologize at the beginning of a negotiation to an outside party for the inherent unreasonableness of our position. But it is, umm — it leads to lesson No. 3 which is, you have to be very careful about becoming a leader or working in a place that doesn’t operate in sync with your personal values and that means — obviously that starts with having to know your personal values and as I was sort of struggling with the implications of this ask sort of what kind of career I could have there, a headhunter called with an opportunity to come to Circuit City, and there was correlation but not causality that there was two companies I worked for don’t exist anymore but –>>[Laughing?] Reckford: Circuit City was on top of the world then. They’d been the fastest growing company on the stock exchange for the entire 1980s and they had just started CarMax. You may not be too familiar. It was the — it revolutionized the used car business. It was the first time anyone had ever offered warrantied, fixed price, returnable used cars and I thought that was really interesting. So we moved to Richmond, Virginia and I never intended to be in retail but found the work really interesting, learned a lot, but had a growing — had a growing desire to actually — to run something at this point and I had lots of business development work. And so after four years, phone rang again and quite unexpected and this was Musicland which is about a 2 million-dollar retailer at the time, back when people actually bought music and movies on plastic discs, which is another thing that’s hard to believe, and we were the leading mall retailer of entertainment products and it is a disappearing category. And Napster had just launched so they could see the future and offered me a chance to run the operations and help navigate a — a new path for the company. I can’t say my wife was terribly enthused. She couldn’t really understand why God would want a nice southern lady to move to Minneapolis, the land of endless winter and, uh — but I had a very strong sense of what we were supposed to do and she — she grudgingly agreed so we made the move. We actually had a couple of record years and yet one of the more discouraging things from a business perspective, it was very hard to see how the company could survive not just against the brick and mortar but against the inevitable digital transformation that was coming. So we ended up selling the company to Best Buy which was a great win for our shareholders and a great lost really for our — ultimately for our staff and for Best Buy. It was not a great acquisition. And I stayed for a year to help try to make the acquisition work but also then became clear that — that I was redundant with the — appropriately put in Best Buy head of the division. And so Best Buy was kind enough to offer different opportunities but I had a growing sense that it was time — it had taken much longer than I has expected and maybe this is the time to begin the transition that I’d always planned of the nonprofit world. And I’d been increasingly passionate about some of the — my volunteer work, which had been helping coach pastors and priests in the leadership side of churches. And so even though I regularly counsel people, don’t leave without knowing what your next step is in this case made a decision to jump and took off with some big ideas and a really ferocious non-compete clause but I did have a walk away package so it was not a particularly brave move. For us, the freedom meant that I was gonna have a lot of time with, at that point, our very young children at home with Ashley and time to have a little enough space to really think about the next step. A little while after that Ashley had encouraged me to do something I had never really had time to do and always wanted to do which is to go on an international mission trip and I know many of you have done this now — or service trip. I wanted to go to Uganda, where our church had been sponsoring all the AIDS orphans in the Rakai district where AIDS really broke out. But I was too late to join that trip and ended up, through a series of events, being able to join an opportunity to serve with the Dalats in central India. And the Bungi — the Dalats are commonly known as the untouchables or the traditional outcasts in Indian community and the Bungi are sort of the bottom of the bottom of the social pecking order, literally only aloud to clean latrines and clean up after dead animals and living in conditions that really unimaginably bad and about half the kids without some kind of intervention are dying by the age of 13 from a combination of poor nutrition and poor health. And I think for me, uh, just shattered me to see people living in these conditions and it was — I don’t know that I knew but I essentially after a couple weeks there came back with a pretty strong sense that I was — it was time to spend the rest of my time doing something to help the poor. And I think for me it reignited some of those early passions around social justice that had softened down a little bit over the years. It was what Bill Hybels, pastor of the Willow Creek Church, calls a holy discontent. That was a nicely-termed phrase. And we have plenty of discontent in our society. We see it all over the place. People are watching some terrible event unfold in their community of the world and the response is, that’s terrible. Somebody ought to do something about that and they change channels, watch “American Idol”. And a holy discontent and contrast is when you or I see those terrible events unfold in our community of the world and the response is, I can’t stand that and I’m gonna do something about it. You turn off the TV, and get off the couch and get into the community and decide to be making — try to make the world a little bit better. It’s — so I came back with a new passion but not a very clear direction. And what was — took me back for the first time really in my whole life suddenly all the doors are closing. And now I can look back and see none of those were really the right things but got to the finals of a couple of different really exciting nonprofit jobs and didn’t get them. And I think we MBAs are particularly at risk of defining ourselves what we do. So when people would ask the inevitable question, I had a — sort of a matter of discipline to bite my tongue and resist the urge to say, “I used to be XYZ” or “I used do XYZ” and just say that, you know, I was home with my family and trying to figure out what I was supposed to do next. And I’m not a particularly patient person so I didn’t — waiting isn’t very easy for me and I think when you wait and question it can drive you a little bit nuts for us type A types. And when I first left Best Buy turned down some very good business jobs, then I started wondering, did I get the signals wrong? Did I miss — miss the opportunity? And in the meantime I was cranking way up on my volunteer time both with our kids at their school and at church and quite unexpectedly the — all the leadership development work I was doing at our very large church ended up with the church asking me to run the church as executive pastor, to free up the pastor to just preach and teach. And it was not what I was looking to do and most of my friends thought this was a really bad career move, and would not be a smart thing to do. But as best we could tell — best I could tell, it was what I was supposed to do. So went into full-time church work and in fact loved it and it was a great time for our family and it was — it was a very fulfilling time for me and I was not actually looking when probably the most important phone call I’ve gotten came in and it was from a partner at Spencer Stuart, who had recruited me in the past, who asked, Jonathan, do you know anybody who’d be interested in CEO for Habitat for Humanity? And, uh, a chill went down my spine and I asked a little bit shyly, “Does it have to be somebody famous?” And, uh, and then went home and wrote a very passionate letter about why this was the kind of thing I had been preparing for for the last many years. And I felt like finally here was something that really combined all of my passions and put everything together. It was, for me, very much my dream job and I really wanted it very badly, did not expect to get it, and was very surprised and delighted to — to have the chance. And I — that’s a lot of detail but I wanted — I share that because the fourth lesson I would share is, you know, my dad was a teacher and he taught one place for 45 years and then retired. I think that world is changed, I think in the business world especially, careers are enormously more fluid than they used to be. And — but I wanna encourage you is to — is to not fight the detours along the way, and particularly to take advantage of learning from the white spaces in your — in your career and the failures which I often found were the richest learning times for me. I arrived at a really critical inflection point for Habitat in many ways. Like very successful startup companies, they were in the process of transitioning from a highly charismatic entrepreneurial founder and had grown far bigger than they’d ever imagined and needed, in the board’s view, more professional management to build out a sort of infrastructure and leadership team to support this exponential growth that they’d had around the world. Habitat needed to become more sufficient, more sustainable, and more equipped to be able to continue to sustain the growth given how much — the side of the need in virtually every country in which we serve. I think many of you — I presume all everyone’s familiar with Habitat but let me give you just a quick Habitat 101 class. Most importantly, we build houses in partnership with — not for — families who need decent and affordable homes in the U.S. and across the world. We don’t give the houses away. Homeowners make a down payment and purchase their homes from us on a no profit basis. Homeowners are selected based on three core criteria. First, need, they wouldn’t be otherwise able to obtain a home loan or mortgage; second, the ability to re-pay a very affordable no-profit mortgage over a 30-to 50-year period; and three, the willingness to partner with Habitat. And for us, partner means is willingness to put hundreds of hours of sweat equity into building their home and helping build other people’s homes, and also to go through financial and home management training in preparation for homeownership. In the same way, then, their mortgage payments revolve in the community so in addition to recipients, they become donors to help other families have a chance at homeownership. As a Christian ministry now working into our fourth decade, we’ve got a pretty good idea what to expect when a family gets, for the first time, a decent place to live. We see huge impacts on health, the children go up — growing up in decent homes have much better health outcomes; healthy children have much better educational outcomes; and in addition to the sort of physical and material benefits of homeownership, there’s a huge psychological change that happens as well when a people have a place to call home. And what we’ve seen over and over again is family members are so proud of their new houses their homes become social centers, they become anchors in the community to stabilize communities, and many communities have been lifted from forgotten blighted areas to areas that have been restored and become inviting areas. In fact now with the housing crisis, purchasing up these empty, foreclosed homes has become a high priority for us. So we’re shifting our mix more away from new home construction towards rehabbing empty homes and in that and around those rehabbed homes tearing down the worst ones, building targeted new ones, and then doing weatherization and repairs to preserve homeownership, especially for the elderly and those communities in that trying to do as much as we can to revitalize whole communities versus individual homes. That’s a Habitat model. It’s a model that’s been effective now for well over 30 years. As Garth said, last year we helped over 61,000 families through a mix of new homes and rehabs and major repairs, which was at almost triple where we were five years ago. The nonprofit world is at least as complex from a management perspective as anything I found in the business world. We have over 1500 affiliates in the U.S. which goes back to that Mosas quote. I think the — I once had a reporter from the New York Times say this big change we’re putting in had caused 12 affiliates to get upset. And I just laughed. I thought, if there was anything we ever did that only 12 affiliates were upset at we would be doing Hallelujahs. But when you add that together, we’re actually the largest home builder in the United States. We serve in over 80 countries. If you pulled all the Habitat budgets together it’s about a billion and a half in terms of total revenue and we increasingly are able to play a significant role in terms of shaping housing policies around the world as well. Stanford stood for the idea, although I look back to Ernie Arbuckle that the same skills that will make you successful in the for-profit world are needed in the nonprofit world. And I took that seriously but I can tell you, it is more true than ever now and I think it’s a much more widely accepted idea now as well. I know certainly we’re being called to use those skills. We’ve set a new goal now at Habitat to serve a hundred thousand families per year by 2013 which is gonna challenge us to find new ways to scale up and increase our impact in the communities in which we serve. And I feel very blessed to have a small role in that process. I have the — the sad part of my job is I continue to travel across the world to places and see the way the families live all across the world and it is truly heartbreaking still and you know the numbers. But I’ve also had the chance to see what just as we call a hand up, not a hand out, can do to let a family lift themselves out of poverty and the fundamental difference that can make in life. Last year I looked into the eyes of a six- girl in a small town in El Salvador who told me her dreams of being a lawyer so she could help others. Her mother was already living her dream. She’d always wanted to be a hairdresser and have her own salon but had never had the chance. And now she’d opened a salon in her new Habitat home as soon as the girls who can now go to school went off, she started treating customers and she’s able to earn an income and spend the time with her girls. In Vietnam last fall I met a family 51-year-old grandfather who had literally spent his entirely living on a boat with his extended family. We have the privilege of tucking our children into bed. They would tie the children in at night because they’d lost one grandchild to drowning in bad weather. And if you could see the boat, uh, or the boats these families were living in, it would just — it would just break your heart. And I had the privilege of dedicating with them — we talk about a house being the foundation for a decent life. This family, for the first time ever, was gonna have a foundation and live on dry land which meant their kids can now go to school, unbelievable health impacts for — for them and for their future. So my days don’t get much better than that. And a quick review. The leaders I’ve respected the most have emulated good role models and picked the right ones; they respect and value all of their staff and teams; they find a place that — to work that is in sync with their defined personal values; and they remain adaptable and as eager to learn from their failures as their successes. I think for me, when I look back on the story, my life changed dramatically for the better during one of the sort of quiet times in life when I wasn’t earning a dime and probably was the most frustrated and I don’t think I could have ever charted the path the led to Habitat. If I — I wouldn’t have been ready for this role if I had come straight from Best Buy and I also know if I had taken the job at the church just so I could get a job like Habitat, I’m fully convinced that never would have worked. It is — in my experience, the times that I really loved work were was when I was really focused on getting projects done or doing something that mattered and the least successful were those when I was focused on trying to grow my career. And my hope for all of you is that you’ll find the same satisfaction. I hope and pray that each of you will find a vocation that allows you to take your gifts and skills and passion and do something, whether in the private sector or the nonprofit world, that makes the world a little bit better. I think we all get bombarded constantly and you all are and will continue to be bombarded with definitions of the good life that base everything based on the size of your salary and the house you live in, the car you drive, how much plastic surgery you’ve had, how perfect you look. And I think it brings me to the final lesson. When, as you get increasing responsibilities in leadership, I think you’ll be awash in temptations and I think you gotta be very intentional in defining what a good life is for you and be — in pursuing it because the lure of letting other people define that for you is very tempting. And it’s very easy for all of us to get our egos and identities tied up with our jobs or mixed up with our jobs and I find I can be more careful than ever now that I’m in a comparatively public position. As a son of a classics professor, I think we all need to be careful of the idea of hubris, that idea of putting ourselves on par with the gods. When I see the things that blow leaders up, and usually it’s around money, sex, and power, they’re really all wrapped up in pride and you have to be aware of those temptations and I think the ones who say, that could never happen to me, that’s often the first step down that path. And I’ve seen some dear friends and otherwise really effective and great leaders totally derail not only their careers but their families because they weren’t aware of those temptations or didn’t think it could happen to them. In my experience it’s better to be humble than to be humbled. And I don’t think you have to think of humility as a limitation. Jim Collins, who was a GSB entrepreneur ship professor back when we were here before he became a guru, discovered the idea of a level five leader in his research and I was so pleased to see that and that idea of people that had, as he would say, a paradoxical combination of personal humility and fierce ambition for their mission or cause. Not that level five leaders have no ego or self-interest. In fact, they’re incredibly ambitious but it’s their ambition for what they’re trying to get done rather than for themselves. And tied to that is integrity, which we just see over and over again can be destroyed in an instant. Warren Bennis, another leadership guru, describes effectively leadership as a carefully-balanced three-pronged stool of ambition, confidence, and a moral compass. And sadly, we can’t watch the businesses these days without seeing what happens when you have destructive achievers, high ambition, high competence, and no moral compass. And, uh, leadership ultimately comes — starts or emanates from character and character comes from a Greek word that literally means a tool that marks or engraves us. And each day, each choice, each action we make we’re in the constant process of either making or unmaking our character either moving more towards the kinda person we wanna be or moving back and it’s ultimately how our colleagues and others are gonna measure us. So you have to choose those values you’re gonna live by, you’ve gotta choose the lines that you’re not willing to cross before those situations actually come along. And, uh, and finally, you gotta — you’ve gotta lead from passion, not just from position. And I hope — I didn’t always know. I certainly had lots of passion but very little focus and I hope you all can find that area of passion for you. What is that issue, that problem, that thing in society that you look out and upsets you or you think could be done better or could be fixed? What’s your holy discontent? And that might be your first clue as to what your calling is. Frederick Beekner, theologian, says, “Calling is where the deep gladness of your heart meets the world’s great need.” And I think it’s worth — take some reflection to put those together but if you can, then you’ll be ready when the right phone rings or when that right call comes. So what are your dreams? What problems do you wanna solve? What price are you willing to pay to, uh, to make that happen? So we close and I hope to turn into a conversation. I just wanna share my favorite blessing from the Franciscan tradition. “May God bless you with discomfort at easy answers, half truths, and superficial relationships so that you may live deeply within your heart. May God bless you with anger at injustice, oppression, and exploitation of people so that you may wish for justice, freedom, and peace. And may God bless you enough foolishness to belief that you can make a difference in this world so that you can do what others say cannot be done.” It’s great to be with you. Thank you.>>[Clapping] Reckford: I think we have time for some questions and I think they asked if people would wait for the mic to be passed down so they can capture them so everybody can hear.>>[Quiet] Audience: Well, thank you for coming. I wanted to ask a question going back to the sale of Musicland. Seems like you had some constituents there with competing interests between shareholders and your team and maybe even customers and I was curious how your faith and how Christian principles formed how you balanced those interests, and in particular, was it difficult for you to reconcile the sale of an asset that it seems like you had some suspicions was a failing asset and maybe the sale wouldn’t go well? Reckford: You know, I think — the interesting thing was that Best Buy had a hypothesis that turned out to be flawed but they had a model of using the real estate in a huge number of relationships with had with teens in malls to leverage those for electronics sales and so it was a plausible strategy of why it was gonna be different than — it was gonna migrate around music, umm, and didn’t work. But we — I think were more — they were way more optimistic and we were more optimistic at the time, umm, that that was actually the best path because otherwise we could see sort of a long eroding tale where we’ d just be closing stores as leases came up because retail, you know, the leverage is so strong that relatively small decreases in sales wipe out all your profitability very quickly, uh, so it’s a very thin business. So it — but I think it is, you know, much easier to look back now with all the data than — than when you’re looking forward but Best Buy was on a roll and they had the financial strength to underwrite the sort of revamping of the stores that we didn’t have the capital to do. So it struck us at the time as sort of the best option for everybody. Everybody should go through a merger. Being acquired once, it’s an incredible education. I think the danger of — of almost every acquisition is, even if they’re done for strategic purposes and you acquire because you want the skills and gifts of the group you’re acquiring, there’s an acquirer’s bias that I’ve seen whether I was in the investment banking side or on the operating side where the acquirer tends to think they have always answers so they, uh, I think Best Buy made some major strategic mistakes by not fully understanding what, uh, the assets they were buying before they put all the changes in place. But it’s — I think it’s a — it’s a constant juggling act of all those stake holders.>>[Quiet] Audience: Umm, well, thanks also for coming. I think a lot of times ministry organizations have a lot of difficulty in the management of people, how they hire, how they fire, how they grow. Many times they can’t fire just out of obligation or out of, I don’t know, some — can you just kinda talk about how you’ve managed Habitat if you’ve seen some of those issues when you come in and how you’re gonna grow and build the business go forward? Reckford: Thank you. It’s — it’s really interesting challenge I think and actually it was so — that’s part of why it was so valuable to work in a church environment before coming to Habitat. If you want the most complex management challenge in some ways try to manage a synagogue, or a mosque, or a church because you’ve got immense ownership, all volunteers, very little leverage over the people doing all the work and, uh, and an enormous shared ownership of the mission. So they’re great assets but great complexity as well. What I found is, umm, that was really helpful to learn is you can manage volunteers and if you can manage volunteers you can — it’s much easier to manage people but, umm, we learned that you can hold volunteers accountable, that you, uh, that actually you need to do the same work to make sure that a volunteer is in a role that he or she values and uses their gifts well. One of the things that faith groups do poorly is often they’ ll put very high capacity people and put them in the wrong roles and Habitat was doing the same thing. And so, uh, the second thing I learned is that you’re not, umm, you’re not doing someone a favor by letting them sit in the wrong role not being successful. That’s bad for the mission and actually bad for the individual. And so, uh, I was sharing with a group last night, you know, I think what I had to learn was, umm, that it has to be integrated. I got pushed, you know, often as we put in change and sort of raise accountability, that got thrown back as, well, you’re not being faithful anymore and sort of either we were gonna be grass root and is faithful or we were gonna be professional and that was termed as “going corporate” and that was viewed as a bad thing. And the response was, no. We’re using other people’s money to do God’s work to serve the poor of the world. We should have much higher standards than the private sector because the standards are so high. So we’re gonna be unapologetic about accountability and much of the practice we do if we standard any well-run organization I hope in terms of making sure everyone has very clear roles, very clear responsibilities, they know what they’re supposed to be accountable for, then we reward them for doing their work. It’s, umm, I think it’s hard, though, because there’s that whole being nice. You know, anybody here from Minnesota? So there’s, you know, they call Minnesota nice so the land of — the land of Lutherans and woe begotten where nobody wants to say the hard things and I think part of, uh, my view is, it’s not — again, you don’t have to be nice or, you know, bad cop Antichrist model, that there’s a — that you can be nice and — and be really clear and transparent and sometimes there’s a — the other thing we see in nonprofits is — the thing is in nonprofit management is you get two groups in nonprofits. One group who are people with world class skills and gifts and talents and who are there because of the mission and I think there’s another group, umm, sometimes who are there, you know, somewhat as refugees or to be rescued rather than — rather than to, uh, to make a difference and that’s really hard. And it is, umm — what we found is we wanna treat people respectfully, we wanna treat people well, up, but at the end of the day, the first thing is the mission and what we can’t do is allow somebody who’s not performing well because if — if you send a signal that it’s okay not to perform well, that starts sort of demotivating your high performing folks and pulling them down. But it’s not easy. Audience: Hi. Thanks. One of the things I’ve been most impressed about is your ability to scale over the last five years. Can you talk about what are some of the levers that you pulled to be able to do that in the nonprofit world and what are some of the challenges you face going forward as you look at taking it to the next level? Reckford: Thank you. It’s, umm, you know, some things — true, every organization the best ideas are all at the field level so we certainly didn’t come in and say, here are all the great new ideas. We actually — I traveled around the world and just looked for what was — what was working or what were all the things people were secretly doing but didn’t — you know, weren’t saying because they didn’t think that would be okay back at headquarters and we tried to get permission to — and a couple things particularly drove growth. One, right as I started, Katrina hit, which was not on my hundred day plan but it freed us up to break a lot of rules in terms of doing something — and we needed to do something big by our standards in the Gulf so it forced us to sit down and sort of reassess the model of how can we do enough to matter in that — in that? So we got the board to formally bless disaster recovery as a formal part of our work which had been informally there for a wile. And we used the tsunami in Asia and Katrina in the U.S. as models of scaling up. We ended up helping 23,000 families in the tsunami which is bigger than anything we had ever done and we were the leading — we may still be the leading home builder in the — in the Gulf Coast since Katrina which, again, is not a typical role for Habitat. But in doing that, we used that to learn how to move faster and to do whole community development and operated to scale and operate in partnerships in way that is we hadn’t before. So now Haiti and Chile, we’re doing — we’re gonna try to help 50,000 families in Haiti and a similarly large number we hope in Chile over time. So disaster response was big. The second one was housing micro finance, uh, and micro finance extremely well established but almost — almost 90 to 95 percent of the people in the world have no access to a home loan of any kind and so what we’re — in addition to all the — so we do housing lending out of necessity but it’ s not our preference. So one of our goals is to get the micro finance world to begin lending for home improvement loans to families that have been taking out successful small business loans and we’re, umm, that’s been a — we see that as a huge next scale up. We’re launching a global housing micro finance fund to be a wholesale lender to MFIs and then we’ll technical assistance if they’ll do the lending. And that’s — we see that as one of our next big bridges for scale. Uh, and then the third one would be around advocacy, umm, trying to actually change policies so we can impact way more people than the — than the houses we build and our big focus is on secure tenure and property rights especially for women in developing countries. So we’re trying to change rules to, uh, create protections and, again, if we can, use crises to do that. So we’re doing big projects around HIV, widows and orphan programs in Africa, particularly in southeast Asia. In India and the tsunami, we used the — so the chance to come in and serve we titled all the homes along the southeast Indian coast and women’s names only and got the other nonprofits to do the same thing. That actually had a pretty profound social change in terms of — of changing, uh, changing the values there. So — and similarly, in Africa in a lot of countries if a woman’s husband dies, his husband inherits the property and the women and children are left out. So we’re trying to get laws changed to allow joint titling and so we see the — the ability to allow families to stay in communities as a way we can scale way beyond our — our core building. That’s a few of ’em.>>[Quiet] Audience: Thank you very much for coming. Umm, I worked in the nonprofit sector before coming to business school and was given the advice by somebody, umm, excuse me, at the millennium challenge corporation who had gone directly from business school back to the NCC that had she — to do it over again, she really would have gone to the private sector before going to the nonprofit sector. And I’m wondering if you can speak a little bit about — although your intention was clear to go to — to, umm, Goldman Sachs, what you learned in all of those years in the private sector that has made you more effective if your current role. Reckford: You know, I — it’s a really good question. We were actually talking about it right before this session. I don’t think there’s a right or wrong rule. Umm, I think there are enormous benefits to getting private sector experience and I think there are — if you were to generalize and I think there are brilliantly run nonprofits that are better than — than most companies and then there are a lot of poorly-run — awful lot of poorly-run nonprofits that are out there likewise there are a lot of well-run companies and not so well-run companies. So you need to choose carefully. I think for me my hypothesis was I would get more experience faster in the business world then could take that with me. I think what I would temper that with is a means to an end. I wouldn’t take a job that you really don’t wanna do just so you can get to something else ’cause I think the chance of being successful aren’t as good. And I think there are great individual opportunities. If you take an organization — take something Muhammad Yunus or Fazle Abed and BRAC– you know, if you could work with a leader like that, that would dwarf any business leader you could ever find in terms of staggering entrepreneurial talent. But those are — but you have to find the right leader to attach yourself to. So I think it’s — it’s my view is I would explore both paths if your passions are leading you that way and then pick, umm, you know, the place you think you’re gonna get the highest learning curve and — and the most tangible experience in the — in the shorter term. And then you’ve got a way in sort of the golden hand cuffs trap of once — a lot of people go in saying they’re gonna do this and then they never actually make the move and 25 years later they have all these regrets and they weren’t that happy or fulfilled. So it’s a — I think you have to be careful.>>[Quiet] Audience: Do we have time for one more question?

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