Shortly after graduating from Princeton University, Mellody Hobson ’91 joined Ariel Investments as an intern. Today, she serves as the company’s co-CEO and president. Based in Chicago, Ariel is the first minority-owned investment management firm in the country and specializes in small and mid-capitalized stocks.
Hobson currently serves as vice chair of the Starbucks Board of Directors and is a director of JPMorgan Chase. & Co. She was previously the chairwoman of DreamWorks Animation and, in 2017, became the first Black woman to head the Economic Club of Chicago.
Last week, the University announced that Hobson and the Hobson/Lucas Family Foundation will fund the first residential college at Princeton named for a Black woman. Hobson College will be built on the site of First College, formerly known as Wilson College.
In this Q&A, Hobson reflects on her time at Princeton, sharing the strategies she uses to be an effective leader and decision-maker today.
Q. What is/are the most important policy issue(s) facing us today?
Hobson: There are so many important policy issues today that it’s hard to even rank the order of them. We are in the middle of a global pandemic, and that has introduced a number of significant health policy issues. I believe if those policies had been handled better, we’d be in a better situation. So that would be front and center for me: getting the pandemic under control. This would ultimately lead to some other big problems being solved, like the financial and economic state of our country. The treatment of unemployed workers has been uneven; we need to make sure they have enough money to live during this rough time. Congress hasn’t been able to solve that issue. The bottom line: It feels like, from a policy standpoint, we’re at a critical juncture in the country.
Q. What are you most passionate about? What current project or initiative are you most excited about?
Hobson: I’m excited about so many things. In Chicago, I chair the board of After School Matters. We serve 25,000 teenagers in the city annually. That’s a big number, but we’re working hard to expand. There are 100,000 teenagers in Chicago that go to public schools. We have to turn away around half of those teens who apply to our programs, and that just doesn’t sit right with me. Those who participate are doing a phenomenal job. Our graduation rates are higher than the city, and we create safe spaces for our teens. But I always think about what could be better: expanding to more teens and so forth. Communications have been particularly hard. It’s difficult during a pandemic because we’re doing it all online. It’s a challenging moment, but it also gives us an opportunity to find new ways to connect.
Q. Over the course of your career, what are the most important skills/strategies you’ve learned?
Hobson: One of the things I’ve learned in business, and as someone who runs a company, is that policy has an enormous effect on your life. I think people discount that. They don’t understand the laws and rules that are instrumental to an organization functioning. I’ve come to have a much deeper appreciation for public policy, especially after my time at Princeton, as I deal with the effects of public policy on a day-to-day basis.
Q. When it comes to decision-making, what are the most effective strategies? How do you make critical decisions and forge a consensus?
Hobson: At Ariel, we determine what we call “decision rights” before a choice is made. This means we determine who has the decision-making authority at the front end, so everyone understands their role. It’s sort of like a hierarchy of decisions, and it could be anything from a majority to consensus to alignment. There have been cases where it almost feels like a jury: where you have the one holdout and you have to get them to come to your side.
We also have a decision called “leader decides” or “leader decides with input.” So, if I’m the leader, and we’re under “leader decides,” then I have no obligation to solicit your input. “Leader decides with input” requires me to query everyone before a conclusion is reached. There are times we approach an issue by first asking: “How do we want the outcome to work?” These strategies have led to much more thoughtful leadership inside our firm.
Q. In what ways did the Princeton School of Public and International Affairs prepare you for your career?
Hobson: The school is extremely pragmatic. It teaches you that there are no blue-sky solutions to hard problems. You couldn’t walk around the School with rose-colored glasses. That work was foundational to my view that most things are hard in life, and you must be practical in how you go about solving problems.
I remember taking a class called “International Responses to Disasters and Failures.” They would present us with some pretty crazy scenarios like: “There’s an earthquake in a random country. You have to get food, water, and everything there.” But oh wait: “Now there are no runways for planes to land. What will you do now?” And oh wait: “There’s also guerilla warfare on the ground, and the phone system is down.”
These kinds of classes forced you to keep your feet on the ground and be super practical. I come from that naturally, but this was reinforced in me during my time at the School.
Q. How do you think the School trains students to be policy leaders? What were the tactical skills you gained while at the School that you still employ today?
Hobson: Again, the School just prepares you for real life. I remember serving as a leader in my policy task force; I was a senior working with juniors. We had to write a constitution for South Africa, completely start from scratch. I basically said, “Okay. Let’s all go read the Magna Carta and read the U.S. Constitution and let’s figure this out.” But how would you rewrite the constitution for an existing country? You have to do it with other people. One person couldn’t seize the day. You had to work with others. And that is exactly what we did in that course, and what real life is in business every day: collaborating with others to drive good outcomes.
Q. How can young people entering the workforce be successful?
Hobson: They must speak their truth. And it’s not truth with a capital “T.” In most things, that doesn’t exist. It’s truth with a small “t.” Your truth might not be someone else’s truth. I see a lot of young people hold back on what they believe. They sit back, trying to read the room. Yes, dangling out there on that limb by yourself is scary but liberating. Be that person. Speak your truth.