22. Shortening the Learning Curve with Nani Coloretti

Alignment is what differentiates great from good and success from failure. But, how do you get there quickly and avoid information overload as a new-in-seat leader? Nani Coloretti, Senior Vice President for Business and Financial Strategy at The Urban Institute and former Deputy Director of the US Department of Housing and Urban Development, shares her playbook for triangulating data, following the money, and improving employee engagement so that you can accelerate success in your next big change effort.

Transcript

David Morris  00:09

Welcome to the HiPERleadership podcast. I am your host, David Morris, CEO and founder of HiPER Solutions. At HiPER Solutions, our mission is to bring positive change to the world. Leaders today are faced with unprecedented change, and yet even the best leaders have had to toss out their standard playbook and think outside the box. Our intent with the HiPERleadership podcast is to share best practices so that you, our listeners, can gain some actionable and practical approaches to your next big-bet endeavor. Today, my guest is Nani Coloretti, the senior vice president for Business and Financial Strategy at the Urban Institute. As the U.S.'s leading think tank organization, the Urban Institute works to develop insights to further advance the discussion on social and economic policy. As I've gotten to know Nani, as well as those who have worked with her, I'm struck by her incredible ability to lead and drive change with diverse-minded people. Whether it was her experience with the Department of Treasury as the number two with the Department of Housing and Urban Development, or with the Office of Governor Gavin Newsom, Nani has led some incredible change efforts that have truly elevated teams and their companies. Hi, Nani. It's great to have you with us tonight.

Nani Coloretti  01:30

Thanks so much for having me.

David Morris  01:32

I'm so struck, Nani, you know, over the years, your finance background and in that budget role, in yet you talk so much about employee and stakeholder engagement -   - and how those come together. And I think a lot about, sort of, when an executive goes into a new role, they're tapped on the shoulder; they come in to lead transformation; and sort of what the first six months looks like. Take me back to HUD, specifically, and what that was like, and how you go in and understand the physics of what's going on in such a large organization before coming up with a plan?

Nani Coloretti  01:43

Yeah.  Yeah, no, that's a great, great question. In these kinds of positions, when you're tapped on the shoulder to go get a Senate vote and then go into some high-level position in the federal government, you do need a tiny bit of an understanding of a playbook - how you're going to approach learning - what I like to call shortening the learning curve. And so for me, I do that in two ways. One is, as I know you and I've talked about in the past, I look at the numbers, not just because the numbers in and of themselves are interesting; but I look at where money is going because it's really an expression of values - values of the administration and the values of that organization. So that helps me shorten the learning curve. And then I also talked to a lot of people. So when I entered HUD, I met with every single senior manager on the career side of HUD. I also met with all the political appointees, but the career side of the federal government is basically run by a group called the Senior Executive Service. These are folks who often have been in the federal government their entire career, and they have worked up the chain to manage great areas of spend and implementation. So I spent 15 to 30 minutes with about 80 people, right when I got to housing and urban development, and that really helps me shorten my learning curve.

David Morris  03:25

Were you on a particular mission, or was this just pure discovery to see where the opportunities might be?

Nani Coloretti  03:31

A number of things. I'll say one of the challenges that Housing and Urban Development had, and sometimes I would say still has as an agency, is the perception that it wasn't very well run operationally. And I wasn't sure that was true. I didn't know if that was true or not true. What I was trying to find out was what was motivating the very most senior staff that work there, and what was in their way? What were some of the barriers that they face in doing their work? And those were sort of the two main questions that I asked each person, but I also perceived both what they were telling me and what they weren't saying. So for me, I like to do work in person, so the zoom world has been, while fun, a little bit challenging for me; but what people say and what they don't say is very helpful for me to understand an organization. And what I basically concluded was the organization was actually, you know, had a lot of different operational pin points and areas that needed to be improved and programmatic areas that we're not living up to their mission, their mandate; but [the organization] actually had many, many areas of strength. And one of the challenges is getting people to understand that the story that they tell themselves about the organization does not need to be focused on everything that's gone wrong. You can still focus on strengths and improve outcomes.

David Morris  04:50

You know, as you're collecting the data place with the 80 plus people, Nani, I'm wondering what the synthesis process looks like. You know, are you just iterating in your mind along the way? Do you reconcile it all in the end? And then how in your playbook does that connect back to the budget?

Nani Coloretti  05:08

So I look for themes. I looked for themes by program areas, and also across program areas of Housing and Urban Development. Housing and Urban Development is a really interesting organization because it has several programmatic areas that in some ways are very, very different from each other. They're implementing and enforcing fair housing rules, which is largely a legal endeavor. But they're also backing loans that are made for people to buy houses. And then there are several other programmatic areas inside of Housing and Urban Development. So to some extent, like Treasury, it's a holding company. So I looked for themes both across senior executives, and within programmatic areas. And then I turned those themes around and did a crowdsourcing with all of HUD's employees to basically decide which areas we wanted to do a deep dive, sort of top to bottom, review on. And so that sort of led me to many programmatic issues and operational issues; but also, at the same time, looking at the budget of areas that were coming up in these themes.

David Morris  06:15

You know, it's remarkable. When you think about crowdsourcing, Google certainly does that, using technology, incredibly well; but when a human, when a leader like you, is collecting that amount of data points, and I assume you're getting buy-in and creating that longer term engagement with the individuals. But I think a lot of leaders struggle where they get information overload. They actually don't know what to do. They have all this data, and now what? Continuing down that theme of how you hone into a plan or what you do with the information, what is sort of that next stage?

Nani Coloretti  06:46

For information, you can get information overload, by the way. For me, what I was aiming to do was gather information as an engagement strategy. And what I mean by that is, if I'm hearing themes or we're understanding some areas of the work, the mission, needing some more attention to be better accomplished, that could turn into a breakout project. And so what we ended up doing was grouping some of the issues that were coming up and creating a way to ask. We use something we call a switchboard, and it's basically like an ideation tool. But basically putting out a question to everyone, or putting out some of these themes, and seeing if people want to vote on whether or not they think it was something I should do a deep dive on. So, [laughs], so we basically, we had a lot of information; and then we just put it out into the organization and said, "Does this ring true? What do you think needs to be done to improve how we operate and to make HUD stronger?" And it's from that, that we then created some working groups to work on those very issues. And this was really not just, "Let's make HUD stronger, and improve how we're doing our work and what we're doing;" but it was actually also, "Hey, everyone here is going to actually help us do this work. If you're able, and you have time, and you want to volunteer yourself, volunteer yourself. We'll put you on a working group." And that's kind of how we divided up, gosh, maybe 13 to 15 projects in three theme areas.

David Morris  08:14

Nani, what would you say the biggest opportunity [was] that emerged during your entire tenure at HUD, either from the crowdsourcing or from the working group?

Nani Coloretti  08:24

So many. I would say one kind of overarching opportunity was to actually get the employees of HUD invested in telling the story about HUD itself. I'll say a little bit more about that so you can understand what I mean. When I got to HUD, it was the lowest ranked medium-sized agency in something called Best Places to Work. And that is based on an annual survey called the Federal Employee Viewpoint Survey. And it's, you know, I want to say 59, or, you know, there's a number of questions vary; but it is a long standing survey in the federal government and aimed at trying to understand areas of strength and areas of improvement in each agency. And one of the things I noticed when I got there, as I was talking to folks, and also looking at data was the response rate for this survey, when I got there was 51%. That's pretty low for this particular survey. And one of the effects of that is they were getting these terrible scores and sort of global satisfaction and employee engagement. But because the response rate was 51%, some managers were discounting the results, saying, you know, it's not a lot of people responding here. Maybe it's just the disgruntled and we don't need to pay attention to these results. So one of the first things we did - and Secretary Julian Castro, at the time, and I did this together - was to really try to get people to respond to the survey. The notion being if you are really the lowest ranked agency, wouldn't you want to know for sure, instead of just missing these results; and so we had aimed at getting a 75% response rate at the first year we were there, which was a big jump, and we got to 74%. So that was the first thing that kind of helped us understand, are these scores real or are they not real. By the way, at the time that we were doing the survey and trying to aim for a higher response rate, that's around when I was doing all of the engagement projects that I mentioned to you before. And so we were doing heavy push, not just on ideation tools and crowdsourcing, but also just talking - you know, more frequent internal communication. HUD had about 7500 employees scattered across the country, and we did a lot more communication with everyone in the different ways that we could; and the response rate went up, but also our results on global satisfaction and employee engagement went up. We sort of lifted ourselves off from the bottom, went up a few more rankings in the Employee Viewpoint Survey, and sort of got recognition for most improved medium-sized agency, which is sort of a nice thing to be recognized for, but also feels a little bit like, "You were terrible before and now you're, you're a little bit better." But we actually used, again, this effort on employee engagement to improve a whole bunch of areas and to get folks to, you know, believe that change can happen. I just took a look at the HUD Employee Viewpoint Survey scores since I left in 2017, and they remain higher than they were in the first part of 2000 and in 2010 and 2011. So I feel kind of good about that.

David Morris  11:37

That's my understanding. I've heard about this; it has real staying power. What have you been able to connect that to in terms of organizational effectiveness, the output, and other metrics? Like how do you link the employee engagement up left to other performance metrics?

Nani Coloretti  11:52

Yeah, so we used the engagement projects to actually work on improving outcomes in a whole bunch of domains. So one of the things we wanted to do was - I'll just say this is a small thing but really important - it was very difficult at HUD for people to hire staff. You know, when you can't get staff in to work on things, everyone's working, doubling and tripling up, and then you also start to fall behind on your achieving your goals. We brought into place some lean principles to work on pain points, such as that one; and we were able to reduce, you know, the time to hire by about 60%. We also took a deep dive look at a program area called the Rental Assistance Demonstration. This is an area that still actually a program that's been expanded - it was expanded in the Trump administration - and it re-capitalizes or improves public housing authority sites that often have long needed capital improvements where you're not using all of your available units because some of them are unusable - they have black mold in them or something like that. There was a really innovative idea that Secretary Donovan had come up with, but there was a big slowdown, or lag, in underwriting this kind of activity. And so we use the same Lean principles to take a close look; and in doing so we're able to increase the timeframe, from boom to flash, by about 50% there. Every single one of these projects has a little story of how we managed to improve either the throughput time, or the results, or both. And that we really did through, originally through, these employee engagement projects.

David Morris  13:38

Really fascinating that that was sort of what you discovered through crowdsourcing and through those working groups. Just looking back, also, your past as Acting Chief Financial Officer of the US Department of Treasury, Assistant Secretary for Management, and also the San Francisco budget director with Mayor Gavin Newsom. You know, I know dollars and cents and budgeting has always been part of your toolkit. Curious, just to understand more the approach you used - where you found it to be the greatest lever, as you think about budgeting and that conversation you'd have with your constituencies? Where you found it had the greatest impact and making positive change happen?

Nani Coloretti  14:16

Great question. So first of all, let me preface by saying that I walk into my career through the budget doorway. My early training was in public budgeting, both the state of Hawaii and actually the Office of Management and Budget, many, many years ago when I was a programming center there. And what I learned through that approach is that the budget is much more than just a spreadsheet of numbers. It actually, as I mentioned before, tells a story about where your values are. They say put your money where your mouth is and the budget can show where your values are, what programs you really are investing in the most. So it's a good overall tool to tell the story of any organization, whether public or private. And one of the things that I use when I go into a new organization is to basically kind of unpack the budget to understand what are the values of the organization or where are they spending our money? And there are lots of jobs that I've had where that tool, that lever has been used to great effect. I'll give just a small example. One of the ways that I got involved in standing up the Consumer Financial Protection Bureau, which is something I did when I was at the Treasury Department, was we created a model to model out how big the Consumer Financial Protection Bureau might be given the particular authorities that it was going to get in certain versions of the bill as it was being written. A lot of people work on this model, by the way; but we worked closely with people who understood consumer protection as a programmatic area, and who understood the back examination and consumer laws, and tried to get a sense of what would it look like if you put these authorities all in one agency? And how much would it cost? And so that model became very predictive and helpful in both the writing of the bill and then in the implementation and standing up the bureau when the Dodd Frank Act got passed.

David Morris  16:14

Yeah, I mean, you talk a lot about budget as a management lever -

Nani Coloretti  16:18

Yeah. 

David Morris  16:18

- past, present, and future, and just all of that. Where else did you find that sort of theme re emerge across these various chapters of change you've led?

Nani Coloretti  16:27

I guess, I would say, you know, there was a role that I played in, I guess, the last financial crisis in 2008. I found myself working for Mayor Gavin Newsom as his Budget and Policy Director; and, you know, at the local government level, and in state governments, you actually have to balance your budget. That is actually not the case in the federal government. But what happened was you forward budget, your revenue. Let's just say, for a given year, you're going to spend $120 - 10 bucks a month, right? What happened when Lehman Brothers failed, and the economy took a downward spiral in the fall of 2008, was that we were partway into our year, thinking we were spending $10 a month and re estimating our revenue many times. And so what was supposed to be $120 budget turned into, you know, let's just say you spent $30, then people came back and told me, you know, we're really only going to have $100 instead of 120. So you have the rest of the fiscal year to try to balance that out. And that is very specified - I would call it special ops budgeting - because you actually have to go and pass a new budget through at the time that you know, the San Francisco Board of Supervisors. And so that scenario that I just told you happened probably three times maybe until the Recovery Act passed in 2009. San Francisco, like many other cities, was just losing estimated revenue, we forward budget revenue, every couple of weeks, we'd get a new estimate. And we will have to lay off people and also furlough them. The biggest expenditure in most organizations is people. That was a really tough time sort of looking forward. And we were just living in the present. But having the Recovery Act pass actually gave us a minute to call back those last round of pink slips and start to think about the future, the budget year after that terrible year.

David Morris  18:23

Very fascinating. 

Nani Coloretti  18:24

Yeah

David Morris  18:25

Shifting to the final part is putting yourself in the shoes of a president or a governor, you're in a private sector board, if you're out looking to recruit a change leader, who does have this ability to really engage, engage with people at all different levels, and also be able to have this lens of fiscal prudence on the budgeting, what are some traits you look for in hiring that leader?

Nani Coloretti  18:51

It's so great to just imagine myself as a governor, so thank you for that question. "If you were the president, what would you do?" Anyway, I'm not on any ballot anywhere or whatever, but I'll just say that what I always look for in a leader is emotional intelligence. And what I mean by that is, obviously, you know, resume with results and all of the bells and whistles that you look for as you're screening for folks. But when you get down to the end of that, to really find out if this is a person who can take responsibility for mistakes they might have made, if this is a person who has an ability to communicate and be a wayshower for people. I think those are really important skills that I look for. There are a lot of things that you can coach for and teach; but in some instances, it's just it's incredibly difficult to have a leader who doesn't come with those skills already tried and tested because oftentimes, in these kinds of jobs, you just don't have the time to make an impact that you might have if you were going to be at a job for many, many years. A lot of these public sector jobs are shorter in term, and you need to show results very quickly,

David Morris  20:07

Beyond your own instincts in interviewing them, any tactics, either in references or in other ways, that you try to get to this EQ?

Nani Coloretti  20:16

It's such a great question. I would say, I mean, in Hawaii, we call it the coconut wire, which is, you know, talk to other people who, who have worked with that individual in different contexts to find out more about the person than you can get from a conversation. I mean, if you think about, David, how we hire, it's so difficult, right? Because you, even if you go through several rounds of interviews, it's really hard to sort of envision someone in the environment that you're hiring them into. And so the only thing you have to go on is what did they do before. So I guess that's what I would use, which is not the references that folks have given me, but references that I can find that are outside of that scope, just to kind of try to see into our observe into what someone might be like, you know, in the real world, and and kind of in the job that you're recruiting them for. And I guess I'll say one more thing about that, which is, I actually think the whole team is as important as the individual. If I'm hiring for a leadership role, I actually am trying to think of the context as well, because no one person is going to have everything at 100%. It's a tall order. But if you have the right team, and you are a good coach, then you can do anything.

David Morris  21:34

It's tremendous, and I really love that metaphor from Hawaii. I will not forget that.

Nani Coloretti  21:39

Coconut wire? Okay. 

David Morris  21:42

Nani, really appreciate it. You're a humble person. And it's great to sort of just get into a little bit more about how your mind works and how you've now done this over and over again. So thank you so much.

Nani Coloretti  21:53

Thanks so much, David. Really, thanks so much.

David Morris  21:58

And to our listeners, thank you for your continued support and feedback, be sure to subscribe to the HiPERleadership podcast on your favorite platform, so you are the first to know of new episodes with exciting guests. And if you are tasked with leading a big change initiative, visit our website at hipersolutions.com to learn more about how our playbook can increase the likelihood of success, while de-risking the change initiative.