The Profile Dossier: Mellody Hobson, the Happy Warrior Seeking Wisdom

“Bravery is not the absence of fear, it is overcoming it.”

Ariel Investments president and co-CEO Mellody Hobson recently changed her Instagram bio to read: “investor, learner, teacher, happy warrior.”

“I think life is all about perspective and how you approach things,” she said in a recent interview. “I originally had ‘warrior,’ and then I was like, that sounds a little tough. Because everyone thinks the black woman is like that, and I was like, ‘I’m going to put ‘a happy warrior’ because I actually am happy.” 

She has a lot to be happy about. Hobson is at the top of her game running an investment firm with $11 billion in assets under management. She has a lovely daughter with her husband filmmaker George Lucas, and she’s admired by pretty much every big name across tech, business, and entertainment. 

But it wasn’t always like that. Hobson grew up in Chicago as the youngest of six kids to a single mom. Her childhood circumstances fueled her desire to understand money — how to earn it, how to budget it, how to invest it, how not to lose it, and how to responsibly give it away.

“I was literally mortified every time our phone was disconnected, the lights were shut off, or we got evicted,” she said. “As a result, I felt a deep, gnawing need for financial security and to be in control of my own life.”

As I was researching this Dossier, I was surprised to see just how much wisdom Hobson has extracted by studying other successful people. She is a student of John Rockefeller, Andrew Carnegie, W.E.B. Du Bois, and many more. 

Here’s how former Wall Street Journal reporter Ann Davis Vaughan put it: 

“She is a wisdom seeker and a mentor seeker. She is a sponge, always looking to soak up other people’s words to live by, advice about how the world works, how to develop character, how to build an organization. It isn’t just to get ahead. It’s on a deeper level. She is always seeking this profound wisdom.”

(Photo Credit: Ames Duncan Davidson / TED)

READ.

On building a remarkable life: This original headline for this profile was “Why the World Loves Mellody Hobson.” And that’s not an exaggeration. Oprah, Howard Shultz, Bill Bradley, Sheryl Sandberg, and Jeffrey Katzenberg are all members of the Mellody Hobson fan club. When you read this article, you’ll understand why. It explains how Hobson’s tough upbringing and relentless spirit are what made her one of the most determined, successful, and likable people in business. If you read just one thing today, let this be it. 

WATCH.

On owning her identity: Hobson’s husband George once told her: “Mellody, you’re going to have a great life.” She asked him why, and he said, “Because the early part was so hard. If the early part’s really easy, then you have the hard stuff later. But you got it over with, and it made you tough.” On a daily basis, she marvels at the life she’s built and doesn’t regret the hard experiences because they allowed her to have “a tremendous amount of compassion for those struggling in our society.” Here’s how she became the truest version of herself. 

On debunking racial stereotypes: Hobson’s TED Talk has been watched more than 4 million times. In a very matter-of-fact way, she makes the case that speaking openly about race — and particularly about diversity in hiring — makes for better businesses and a better society. “Researches have coined this term ‘color blindness’ to describe a learned behavior where we pretend that we don't notice race,” she says. “In my view, color blindness is very dangerous because it means we're ignoring the problem. We cannot afford to be color blind. We have to be color brave.” 

On bite-sized bravery: What makes us brave? Hobson says you can’t be brave without fear. “Bravery allows us to push beyond the boundaries that hold us back from having the lives we want,” she says. In this inspiring talk, she offers three equations that contain the ingredients to a happy, successful life.

LISTEN.

On overcoming the past: In this podcast, you’ll hear Hobson explain how the fears of her childhood have defined her work ethic. “I still work today as if I need the meal at the end of the day,” she says. “I think that anxiety has fueled me, but I don’t think it’s always healthy.” Over the years, she’s worked to weaken the outdated insecurities that just don’t make sense anymore. “I can’t tell you that I’ve wrestled it to the ground yet,” she says. This is a really good one. 

On mentorship and feedback: Hobson has only worked for one company in her entire life. She was an intern at Ariel Investments, and has been there for almost 30 years. In that time, she’s learned a few important lessons about taking constructive feedback. When she was 26, her mentor Bill Bradley told her: “Mellody, you could suck the life out of a room. You could be a ball hog. Don’t be a ball hog.” She had to actively stop herself from crying, but she thought: “He loves you. He would not say this to be mean. Be curious about what he’s saying.” Accept the feedback and be curious about it rather than dismissing it outright.

On embracing our differences: Hobson’s mom used to tell her, “You can be or do anything.” What she now tells her daughter is, “I want you to believe that’s true of anyone and everyone.” Hobson says she believes there’s a ton of doubt society casts on people based on their gender, race, and beliefs. “Awareness is not enough,” she says. “Action is super important.” Observe your environment and ask yourself: Who do you invite into your life? If the diversity is not there, you’re limiting your own opportunities and success, Hobson says.

On her investment philosophy: In this interview with a16z’s co-founder Ben Horowitz, Hobson delves deep into her investment thesis and explains the importance of patient investing. “Patience wins,” she says. “We feel very strongly that at the core of what we do is play time arbitrage.” Hobson believes that an expert is someone who “knows more and more about less and less.” If you pair deep expertise with patient investing, she says, you will come out on top.

On the importance of financial literacy: Hobson has called herself a brutal pragmatist, so this 2020 commencement speech is all substance and zero fluff. She explains the importance of valuing time, money, and people. Hobson advises recent graduates to build wealth through compounding, become aware of their spending and earning habits, and aim to gain financial freedom. This is a masterclass in becoming financially responsible.

On building a better future in the midst of crisis: Hobson believes Americans are resilient. Even in the midst of nationwide protests and a global pandemic, Hobson remains optimistic about our country. “My point about telling people you can be or do anything: I understand all the obstacles that will be in your way. The hope is America,” she says. “It's quintessentially who we are. We think tomorrow will be better than today. I know I wake up that way every single day. Even in our darkest hour, we always believe that things will improve.” Here’s why she says people shouldn’t give up on building a better future. 

TECHNIQUES TO TRY.

Take the cold bath bravely: In 1914, W.E.B. Du Bois wrote a letter to his 14-year old daughter who had just started attending boarding school in England. Among many, there’s one profound piece of advice in the letter that has meaningfully shaped Hobson’s life. Du Bois writes, “Don’t shrink from new experiences and custom. Take the cold bath bravely.” Everyone feels fear, Hobson writes, and you cannot be brave without it. She adds, “In other words, while you may not be able to stop your fears, you can overcome them.”

Don’t look up at the storm: How do you react when crisis ensues? During the financial crisis, Hobson learned that no one is immune to hard times. One morning, global markets were plunging, and she was beginning to panic. Her husband George gave her the following advice: “In a snowstorm, when you’re trying to get from one place to another place, you never look up at the storm. You watch your feet. If you look up at the storm, you will fall.” In other words, you keep going one step at a time and refuse to get lost in the magnitude of it all. Hobson says this serves as an example of how "in horrible moments, you can have a moment of tremendous clarity."

Don’t confuse motion with progress: During quarantine, it’s not uncommon for Hobson to do Zoom calls for up to 10 hours a day. The way she keeps perspective and cuts through the noise of business is by asking herself this question: “Before the day is over, what must I get done?” She adds, “Instead of filling my day with lots of things that feel urgent, I want to get done what’s important.” Before adding yet another thing on your calendar, consider if you’re mistaking motion with progress.

Learn to take control of your emotions: Our emotions play a part in everything we do. They dominate our relationships, our careers, and even our investing decisions. Hobson says that in stock market investing, people move between euphoria and fear, and they make bad decisions because of it. “Being guided by emotions and making investment decisions is a sure way to fail, and it happens every single day,” she says. You can get a lot of satisfaction from overcoming your fears, she says, if you can learn how to choose the brave path instead. 

Ditch the “rescue fantasy:” Hobson believes too many people are living in “financial fairy tales” where they expect someone will save them from their own uninformed decisions. “In the fairy tale, the girl always gets rescued, and so we get hardwired to believe someone will come and take care of us,” she says. One day she read a quote in which she realized, “No one is coming. I’m all I got.” That day changed the way she approached life. She asked herself the following questions: “If no one’s coming, then what kind of decisions would I make? How would I do things differently?” Stop believing the fairy tale, and start taking the ultimate responsibility for your own life. 

Seek a true partner in life: For a long time, Hobson’s passions were her career and making it in business. They were all-consuming, so she didn’t have time for love. “It took me a long time to be as brave in my personal life as I was in my professional life,” she says. “That’s because to be brave in love means opening yourself up to the possibility of heartbreak.” And then she met her now-husband George Lucas. “People talk about soulmates, I met my mind’s friend,” she says. “And since I’ve always trusted my mind, when it said ‘Leap,’ so did my heart.” Note that she didn’t act on emotional impulse — even in matters of the heart, she still let her brain lead.

Take difficult feedback with grace: There’s no such thing as constructive and non-constructive feedback, Hobson says, adding, “It just is, and you decide if you accept it or not.” A coach once came into the office to teach the staff about feedback. “What this coach said to us was that if someone calls you a horse’s ass, you might think about it and you might reject it,” Hobson says. “The second time someone calls you a horse’s ass, you might think about it again. The third time someone calls you a horse’s ass, buy a saddle.” Her point is that you shouldn’t reject and filter feedback based on who’s giving it, how they are saying it, or whether they were nice. Don’t only accept what you want to hear.

Don’t win badly: Ariel Investments founder and co-CEO John W. Rogers used to give Hobson the following feedback in her reviews: “The merits of your argument don’t matter. It’s how you win.” He told her that she was fiercely logical and intellectual about her arguments, but she was winning badly. He’d say, “You’re leaving bodies. And yeah, you might be right. But it’s cost you everything.” That’s when she learned one of the most valuable lessons in her career: “Don’t be ready for the fight. Understand how much your personality can overwhelm someone. How much fear you might induce in someone. How much you might intimidate them. Then understand that it’s not just about your logic.” 

Persuade through questions: What do you do when you think someone’s not seeing a situation in its entirety? How do you convince them to see your point of view? Hobson has been called “The Picasso of Questions” because of her relentless curiosity. She believes that the best way to get information or to help someone see a different perspective is not to pound the table and berate them but rather to ask them a series of questions that will help them understand your viewpoint. Asking questions, she believes, is the best persuasion tool we have. 

You can only move what you measure: Hobson says many CEOs say they’re trying to diversify their workplace — but trying is not enough. In fact, trying is not good enough in any other area of business. Results are what matter. “Any other area of business, you don’t shoot at targets you haven’t set,” she says. “But here, a target becomes a quota.” When CEOs talk to her about diversity, Hobson asks the following questions: “Can you be a superstar at this company and fail on diversity goals? Can you get your full bonus?” She says, “If you can, it’s not important.” In order to truly diversify your company, you need to have goals, targets, and financial incentives. In business, you get what you incentivize.

Consider your good fortune: If you were born in the United States, Hobson believes you have a responsibility to pay it forward. “I think you have debts you owe society for your own success,” she says. “Warren Buffett says, ‘If you’re born in America, you’ve won the birth lottery.’ I try to remind young people — even those who come from very difficult circumstances — you’re not a child in Syria. You’re not a girl who’s been taken by Boko Haram.” That debt is what fuels her to work with non-profits, sign “The Giving Pledge” with her husband, and dedicate her time to educating people about the importance of financial literacy.

Aim higher every day: In her Christmas card last year, Hobson quoted Laird Hamilton: “Never let your memories be bigger than your dreams.” To have purpose in life, she recommends approaching each day thinking you could become a better version of yourself, you could sharpen your thinking, and you could improve the world just a bit more. “I think that’s fundamentally what gives you purpose and fulfillment and joy,” she says. “I don’t look back at anything I’ve done and think, ‘Done, game over.’” 

QUOTES TO REMEMBER.

“The biggest risk of all is not taking one.”

“Bravery is not the absence of fear, it is overcoming it.”

“I’ve experienced both poverty and plenty. We shouldn’t stigmatize those who are struggling nor condemn those who are successful.” 

“Invite people into your life who don't look or act like you. You might find they challenge your assumptions and make you grow.”

“The first step to solving any problem is to not hide from it, and the first step to any form of action is awareness.”

“Don't be color blind, be color brave. Embrace diversity as a competitive advantage.”

“If we can learn to deal with our discomfort and just relax into it, we'll have a better life.”

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