FARAI CHIDEYA, host:
From NPR News, this NEWS & NOTES. I'm Farai Chideya.
Mellody Hobson was one of those bright school kids whose private life was pretty stressful. Her family struggled to make ends meet and they moved constantly. Despite it all, Hobson made her way to Princeton University. And after graduating, she returned home to Chicago and started work at a small black-owned investment firm, Ariel Capital Management. Well, Ariel grew exponentially. And by the age of 31, Mellody took over as president.
Today, Hobson has perfected the art of multitasking. In addition to her work at Ariel, she goes on-air as a financial expert for ABC's "Good Morning America." She also has a seat on top-notch corporate boards, including Starbucks, Dreamworks and Estee Lauder.
Mellody Hobson joined us for NEWS & NOTES series, Leading Ladies. She says her drive to succeed began with her mother.
Ms. MELLODY HOBSON (President, Ariel Capital Management): I'm the youngest of six children. And my mom was a single mom and, like so many other single moms, worked extraordinarily hard to try to provide a good life for us. And being the youngest, I had a really interesting vantage point because my oldest sister is 25 years older than me.
And all the while I was growing up, of course, there were just constant conversations about money and money being tight and how are we going to make ends meet and sometimes not having enough money. And it really just made me committed to living a life with much more financial security. Because I don't think it's an accident that I ended up in the money management and mutual fund business.
CHIDEYA: Let's back up a little bit to your mom. You know, you mentioned her as someone who may not had been the best at managing money, but who - it sounds like you have a great deal of love for the commitment she put into being your mother. Why aren't you her? Why aren't you someone who struggled financially with making decisions? Why are you the person that you are, who seems very decisive about the path that you've chosen?
Ms. HOBSON: Well, I think I am her in some ways. I grew up with a mother who said anything is possible. She had a grand vision of life and a grand vision for me. And she didn't know what it would be, but she just constantly told me whatever I wanted to do would happen. That's what she felt about her own life, and still does.
You know, my mother is still out trying to figure out the next big thing, which is, it's hilarious, but it's also great to see someone still have that kind of energy and passion. You know, it just absolutely amazes me. But at the same time, she's relentless, demanding, her sense of ethics and integrity just will not be shifted. She's very strong. She's the ultimate matriarch, and does not take any excuses.
CHIDEYA: You also talked about having to move a lot.
Ms. HOBSON: Yes.
CHIDEYA: What did that do to how you saw the power of money?
Ms. HOBSON: Well, that was devastating to me. We would constantly have to move because we couldn't quite afford the places that we were living. And sometimes we got evicted. And it was just very, very difficult as a child to try to understand that. Essentially, because I went to a school in Chicago, it was a public school when I was in grade school - I went into a parochial high school. But my grade school was in the middle of what's called the Gold Coast in Chicago, and the kids were all fairly well to do.
And so it was hard to sort of put my life in context of kids that I felt, you know, were doing very well and had a lot, and weren't worrying about, you know, their phone being disconnected and things like that. So I always tell people it's not an accident. I have only had one job in my lifetime. I've worked at Ariel since I graduated from college.
And I'm known in my graduating class from Princeton as the only person who's had the same work phone number since I graduated from college. It used to be the same work and home phone number until two years ago, so that was for 13 of the 15 years - almost 16 years I've been out of college.
That moving a lot really committed me to stability and committed me to…
Ms. HOBSON: …being in control of my destiny. That was something that was very important to me. And it also made me very conservative about money.
CHIDEYA: So Ariel Capital Management is a Chicago-based investment company. You have 401(k)s, institutional clients. In the simplest of terms, tell us what you do.
Ms. HOBSON: Well, let me start with our business. Our business everyday is to make money for people. And I take it as seriously as doctors who are trying to cure cancer, because by giving people financial freedom, we allow them to do great things in their lives - from retire to send their kids to college, to buy their first house, to fund a business that they might want to start.
In terms of what I do every single day, I'm tying to get individual investors interested in our mutual funds, so I think about how to brand our business so that anyone with $1,000 or the willingness to commit $50 a month will want to invest with us. So that's everything from helping them think through ads, through sponsorships. This year, we're sponsoring the touring company of "The Color Purple," which is so exciting for us - anything that might attract attention to our company.
Additionally, my job every single day is to make sure that the railroad runs on time. So everything outside of the investment team, I have responsibility for. So that's everything from technology to human capital, to finance and administration of the firm, to the marketing teams, going out and seeing clients, keeping them excited about what we do, convincing them that we're good at what we do.
I always joke with John Rogers, who founded our firm almost 25 years ago, which is amazing, that I would have worked for free - that being there has really been a gift and has brought to my life more than I could possibly have ever envisioned. So it's been really, really fun.
CHIDEYA: Now, you mention the sponsorship of "The Color Purple," and Ariel Capital is a black-run company. Do you consider yourselves specifically marketing to the African-American community, or reaching out to a general community as well?
Ms. HOBSON: We strive to reach out to a general community. We want every person out there who might be interested in having their money grow with Ariel Mutual Funds invest in us. At the same time, we realize that there is an untapped market in terms of the African-American community that we know all so well because it is our community. We've done a tremendous amount of research with our partner, Charles Schwabb and Company, on the state of black America when it comes to investing. And one of the things that we do know is our community is under-invested.
As a result of that, one of my personal missions in life is to make the stock market a subject at dinner table conversation in the black community so that we might narrow the wealth gap that exists between our community and our white counterparts.
Now, one of the things I can tell you, that's why we at Ariel have a turtle as a logo. And we talk about patience. And our motto is slow and steady wins the race, just like Aesop's fable. And our turtle holds a loving cup, showing that he's won the race by being patient and deliberate over time. And our portfolios reflect that conservatism, buying companies that we know extraordinarily well, that have brands and franchises that stand the test of time, not new people doing new things for the first time.
CHIDEYA: You used the word conservative, and conservative in a financial term. But you've also been involved in politics, and it hasn't been on the conservative side. How do you reconcile what it - words mean? You know, the word conservative can be used in many different ways. And how do you reconcile being a businesswoman and also being someone who's active in politics?
Ms. HOBSON: Well, I think first of all, the terms conservative in financial terms and in political terms are two very different things. In the investment world, there's a, you know, understanding risk, and basically what we're thinking about every single day at Ariel is not how much money we can make, but how much we could lose in an investment. So that's a different way of thinking than trying to shoot the lights out and find that stock that's going to go from two to 200 on a wing and a prayer.
We, instead, invest in businesses like Smucker's Jelly, or Clorox Bleach, where regardless what happens to interest rates or what goes on in the world, people pay 99 cents for a quart of bleach. That's what I mean by conservatism. You don't expect those businesses to go away.
Now in politics, how do I reconcile being a businesswoman with being politically active? I believe that we have a responsibility in this country to be a part of the Democratic process. I think that's what the founding fathers intended in writing the constitution. I believe in speaking my truth and having a voice, and I believe in aligning myself with politicians that reflect the ideals and values that I have and strive for.
CHIDEYA: How do you feel about class in the black community? There's been a lot of debate, I mean, including on our show over - well, in the glory days of the past, rich black people and poor black people lived together side by side, and today you have the ghetto and you have Baldwin Hills and never the twain shall meet. Do you buy into that? And how do you deal with that when you think about the mission of the work that you do as a financial executive?
Ms. HOBSON: One of the key missions of our company is to help our community. And we have done that in a number of ways. We have a school in the inner city that has a saving and investment curriculum. We give every first grade class 20,000 real dollars to invest, and the money follows them through their grade school career. We do all sorts of special programs for the kids, including me going out and doing financial seminars for their parents.
I think it's incredibly important. Now, you know, when you're black in America, I don't care how successful you are. You have some friend or some family member who's one step away from, you know, a bad situation. So we spend lots of time with Reverend Jackson. I on the phone last week with Reverend Sharpton. You know, I consider these people to be extraordinarily important to long-term success of our community.
And I really appreciate the fact, and I constantly tell Reverend Jackson and Reverend Sharpton that I appreciate the fact that they're fighting for us, because I am an accident of birth. Warren Buffet, the greatest investor of all time, says that if you're born in America, you've won the birth lottery. Whether you're black and you're me, and you went to the schools that I went to, and you work at Ariel, you've won more than the birth lottery. And I don't take that for granted.
CHIDEYA: Let's say that someone comes up to you after one of the many speeches that you give. Say that she's 16 years old and she says I want to be just like you. What do you say to her?
Ms. HOBSON: I'd say be just like you. I once had someone tell me that I don't remind them of anyone that they ever met. And I took that as a huge compliment, which meant I was original. And so I would suggest to her that she speak her truth with her life, with her own sense of purpose and pursue her dreams. I mean, I couldn't make it more simple than that. And work as hard as possible to make sure those dreams become a reality, whatever they might be, if that's being a great mom or being a killer businesswoman - whatever it might be.
CHIDEYA: That was killer businesswoman Mellody Hobson, president of Chicago-based investment firm Ariel Capital Management. Now, we've posted several online-only audio clips at our Web site where you can hear Mellody talk about the price of her success. That's at npr.org.
(Soundbite of music)
CHIDEYA: Just ahead, an anti-smoking advocate takes a slavery museum to task for getting money from big tobacco, and Zimbabwe's fight for political justice.
NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.