Editors Note: This article was originally featured in the July edition of MReport, available now.
Diversity and inclusion is not a destination—its a journey that Fannie Mae began over two decades ago with a commitment from the top. The journey has been met with many twists and turns, successes, and lessons learned along the way. One thing that remains constant, however, is that we continue our travels. We check our GPS and ensure that our roadmap aligns with the vision and strategy of the organization. Fannie Mae is a leader in the mortgage industry, with a strong vision to be America’s most-valued housing partner and lead the market in everything that we do. Taking this position comes with challenges, such as establishing objectives for others to follow, addressing the changing housing market and potential changes to the economic environment, creating a new model, and changing the game. We have faced these challenges with resilience and focus to stay steadfast on our journey to diversity and inclusion.
When Fannie Mae established the Office of Diversity and Inclusion in 1992, we were one of a few companies of any kind to create a dedicated office and staff to focus solely on building an inclusive culture. Even today, we find ourselves leading the market as one of the most diverse organizations in the financial services sector, recently earning several awards and recognition from the Human Rights Campaign, the Corporate Equality Index for three consecutive years, National Business Inclusion Consortium’s (NBIC) “Best of the Best for Diversity and Inclusion,” Black Enterprise’s 50 Best Companies for Diversity, Top 20 Companies for Best Practices in Diversity and Inclusion, and Top 50 companies for Women of Color in Mid-Level Management by Diversity MBA magazine, and Mortgage Women’s Magazine’s 50 Best Companies for Mortgage Women, to name a few.
While we appreciate external recognition of our diversity efforts, we want to ensure that we are “walking the talk,” which in part means continuously ensuring that our workforce remains diverse. In order to retain the best and the brightest talent, we have to recruit and develop our employees at all levels of the organization. We are committed to maintaining a pool of diverse candidates, and this past year chose from that pool to fill all of our open officer positions. In 2016, 66 percent of our external hires were minorities and 47 percent were women. The workforce at Fannie Mae leads financial services, with 57 percent people of color and women making up 36 percent of our board members.
From Top to Bottom and Bottom to Top
Our diversity and inclusion roadmap, or strategy, is a top-down, bottom-up approach. We have leadership vision and commitment at the top and grassroots engagement from our employee base. Our areas of focus consist of three distinct but connected pillars that enable Fannie Mae to reach its vision to be America’s most-valued housing partner. We want to continue to lead the industry with a diverse organization, hiring and retaining dynamic talent that brings different perspectives, thoughts, cultures, and decision making, which are all key elements that drive innovation. To leverage the dynamic talent at Fannie Mae, we focus on creating an inclusive culture where every employee has the opportunity to make contributions that are valued. One of Fannie Mae’s values is “valuing our people and our communities.” We live this value by providing education and tools for our leaders to build and manage an inclusive culture. More than half of Fannie Mae’s employees actively engage in one or more of our 12 Employee Resource Groups (ERG). Fannie Mae’s ERGs are demographically aligned, with a few exceptions, such as our two religious ERGs (Muslim and Christian Salt and Light), and the veterans and individuals with disabilities ERGs. Many companies today shy away from offering religious groups and affiliations to their employees. Not Fannie Mae; we believe that offering these employee resource groups shows our full commitment to embracing and creating an inclusive culture for all employees.
Our resource groups also enhance our ability to attract and retain employees with military backgrounds and those that may have differing workplace needs, thus increasing our diversity. The year-round programming and events sponsored by the ERGs provide employees opportunities for education, recruitment, professional development, networking, and volunteerism, all while supporting our corporate diversity and inclusion strategy.
Intercultural Development Inventory
Every day, we have the privilege of working with a diverse workforce. This gives us the opportunity to engage different working styles, gain deeper and more innovative ideas, and learn to appreciate different cultures, which ultimately helps us better serve our diverse customers in every market, every day. We realize that to successfully leverage this rich diversity, we need to ensure that we are a culturally competent organization. To that end, we have incorporated a tool called Intercultural Development Inventory (IDI). This theory-based psychometric instrument measures an individual’s intercultural competence. It is accurate, unbiased, reliable, and validity tested with over 7000 subjects in a variety of different cultures. This tool has been deployed to all of our officers and other key leaders to provide them with the skills to lead and manage a multicultural workforce. This means that every leader has an obligation to increase his or her level of cultural competency by executing their IDI development plan. Our work is never done on this journey. We are continuously working to achieve a culture that is self-aware, understanding of others, and capable of creating inclusive strategies to address all areas of Fannie Mae.
Diversity Advisory Council
Our focus on our culture also includes our Diversity Advisory Council (DAC), a group comprising 15 Fannie Mae executives representing the various divisions within the organization. These senior leaders are structured around the three strategic diversity and inclusion pillars to help drive a broader and wider reach of inclusion across the enterprise. Some of the members serve as executive sponsors for our 12 ERGs, and participate in our “Courageous Conversation: Let’s Talk About It” Series where we recently addressed race relations, myths, and stereotypes that plague the Muslim and LGBTQ communities. Our next Courageous Conversation will be a deep -dive listening tour with each of the 12 ERGs to hear their feedback, perspectives, and insights into ways we can strengthen our inclusive culture. This group of leaders also regularly volunteers to test and learn new initiatives before we launch and implement them across the enterprise. We recognize that we cannot seek accountability of workplace behaviors without clear communication of expectations. Therefore, our diversity and inclusion journey includes all of us.
Our roadmap targets the marketplace and is built around our strategic alliances with nonprofits, lenders, customers, and organizations enabling us to achieve our mission of providing liquidity, access, and affordability of credit to the market at all times. These partnerships also enhance the Fannie Mae brand.
Executive Leadership Visibility
To meet this business imperative, we have to understand the changing demographics of the marketplace and have a cultural understanding of diverse communities and the issues facing underserved markets. One of our initiatives in this area is our Executive Leadership Visibility, which requires that each of our executives attend at least one diversity event each year. This action not only enhances their individual cultural competency, but also exhibits their leadership commitment to diversity. We launched this initiative two years ago with about 70 percent participation; year two, 98 percent participation; and in the first quarter of this year, we have already had more than 50 percent leader participation. We anticipate a 100 percent engagement by year-end.
Embracing a Diverse Marketplace
The marketplace also includes who we buy our products and services from. We are committed to growing our diverse supplier efforts. This enables minorities, women, and people with disabilities who own businesses to prosper and possibly hire more employees—a focus not to just comply with HERA 1116 but to exceed the goals by including doing business with LGBT-owned, veteran-owned, and HUBZone-certified businesses. Over the last several years, our percentage of dollars spent with diverse businesses has continued to increase and compares favorably with the financial services industry.
While we believe we have a strong commitment to diversity and inclusion and a roadmap that keeps us focused on the journey, we can never feel like we have arrived. We recognize the shifting demographics of the workforce. Millennials are the most racially diverse generation, the oldest baby boomers have begun to exit the workforce, and African-, Asian, and Hispanic Americans account for a significant percentage of the U.S. population. Statistics show that by next year, 51 percent of the workforce will be women. We know that having a diverse workplace is one of the top three reasons millennials join a company. We’ve had to rethink our approach to recruiting and retaining these younger workers. Studies have shown that millennials feel less attached to an organization and no longer stay in one position for long, differing from previous generations. They have grown up with an expectation of transparency, much more access to information, and with the desire to feel that their voices and opinions are accepted. They require supportive leadership and a supportive culture in order to feel fully engaged.
The Destination Lies Ahead
As you can see, diversity and inclusion is not just a nice thing to have or an obligation—it is imperative for organizations to stay in the game. At Fannie Mae, we are committed to diversity and inclusion as our way of doing business. It is our way of attracting and retaining top talent, and our employee satisfaction and engagement is correlated to our inclusive culture. Innovation, creativity, and problem-solving are enhanced by our diversity, and we are using our talent to innovate and create products that serve diverse markets. For example, HomeReady and HFA Preferred solutions are designed to make homeownership affordable for qualified borrowers, and our recently launched student loan debt solutions aim to help multiple generations of current and future borrowers.
How do we continue to move forward? Encourage allies who are willing to step in and bring those courageous conversations to the table. They shouldn’t be afraid to identify the obstacles that are getting in the way of your inclusive culture. Continue to encourage and support the talent that has been brought into the company. Diversity and inclusion is a competitive advantage. At Fannie Mae, we have been on the journey for decades starting with Diversity 1.0, to where we are today, embedding and sustaining diversity and inclusion into everything that we do. But the destination is still ahead.