Episode 27: How to Build & Maintain an Inclusive Workplace: Mark Mordell, Chairman & CEO, Avidbank

It starts at the top — building a sense of belonging through transparency and openness.

Transcript

Chris Riback: I'm Chris Riback. This is Call In with Dr. Alexandria White. We discuss business leadership in our time of social change when to call in, when to call out, and how to build sustainable business value today.

Before our conversation though, an ask from us to you. We hope you like these call in conversations. And if so, we'd appreciate if you take a moment, go to Apple Podcasts or wherever you listen, and if you're so moved, leave a five-star review. The ratings really matter. They go a long way to helping other people find the podcast.

Dr. Alexandria White: Our show is brought to you by Clayton, Dubilier & Rice, which is committed to a more diverse and inclusive future. Let's call in.

Chris Riback: Mark, thanks so much for joining us. We're looking forward to getting to talk with you.

Mark Mordell: Well, thanks for having me. Appreciate being here.

Chris Riback: Why don't we start at the high level. If you would, please describe Avid Bank? What are your business lines? Whom do you serve? What defines and differentiates who you are, who the bank is?

Mark Mordell: Avid Bank, we're just over two billion dollar in assets. We are a commercial bank and obviously based down in here in San Jose. We have five verticals, if you will, that we participate in lending.

We're two billion in assets. We're about 150 employees. 50 of those employees are remote, permanently remote, that not do not have an office to go to. If there's any benefit from the pandemic, it got us thinking a little bit differently about where people needed to be, even though I thought we were progressive beforehand. But well, we weren't. What we've learned recently is that we can get better talent in locations, not having to have them come to the most expensive real estate and cost of living place on the planet, which is the Bay Area here.

So we've always tried to be more innovative and inclusive. So much so, when we moved out of our Palo Alto headquarters from 10,000 feet to 33,000 feet, there's not a C-suite. There's only nine private offices in 30,000 feet. We don't have man doors that open and close on our offices. They're all glass.

So this whole thing about transparency that we tried to grow, where there's access to the access to the C-suite. That everybody's got a role here and if they devalue somebody, that it's just not the way it should  be. I mean, I have a great title, but I need a lot of people that do a lot of things to help make this organization look good. And everybody here has a purpose.

We have outstanding talent for a bank our size. When you're talking about a two billion dollar bank and some of the other ones are out there in our spaces are 10, 15, 100 times our size. But we have people with 30, 40 years’ experience that buy into our value system, buy into our value propositions. And so they get big bank, sophisticated council in a small organization, hungry touch atmosphere.

Dr. Alexandria White: Thank you for that. Mark. I have had the pleasure of working with your wonderful employees over the past three years. Banking is about relationships. I used to be a banker for six years. That's how I worked my way through college. And I remember back then, it was a bank in Indiana, and we never talked about diversity, equity, inclusion. Bloomington, Indiana. And now it is everywhere in the banking sector.

It is ESG, it's diversity, equity, inclusion, and belonging. It’s making sure that if we're going to have investors and things like that, that it's going to be a diverse slate of investors or people that we want to do business with.

What is your journey as a CEO of a two billion dollar bank? What's your insight on diversity, equity, and inclusion?

Mark Mordell: One of the things that's kind of fun about our organization is that the diverse company that we do have, both from a gender and race perspective, is so organic that it's just real.

So when these topics rose as much as they did over the last three or four years, we started looking at what we were doing. And we were actually pretty good, especially in the financial services industry and certainly the banking industry, given gender and people of color. So I didn't have to be sold on this as a good idea. I learned why it was a good idea. We just were hiring the best people that we could find and as the culture we created was inclusive, even before inclusive was the hot topic.

I mean, we have lunches together. We play together, we work together, we have all sorts of things to do together to protect the culture. And this has started off by we wanted to have an environment that was more important than just a paycheck.

Dr. Alexandria White: That's right.

Mark Mordell: Or a title. I wanted to make it difficult for somebody to leave. Because people are going to leave for better opportunities. But I wanted to bite at the apple or I wanted them in tears on the way out the door.

Dr. Alexandria White: Wow.

Mark Mordell: That was the whole idea.

Dr. Alexandria White: Wow.

Mark Mordell: Because I would say, "That's a great opportunity, Chris. Go take it. I mean, you've deserved it. You've worked hard. That positions fill here or whatever it may be. But you got to take that." So that's what we want. That's the culture that we embarked on probably about eight or nine years ago.

Dr. Alexandria White: Well, you are exactly right.

In regards to growing up. I think it's very important that people know where people came from. And how it impacts how they show up as business leaders, as colleagues, as change agents. And so for you, can you tell us a little bit about that personal journey from where you grew up to now understanding diversity, equity, and inclusion? And how it impacts colleagues and companies?

Mark Mordell: Well, I think we're all products of our environment.

Dr. Alexandria White: Yes.

Mark Mordell: And so I grew up in Detroit. I was born a long time ago. So I was born in 1960. And you can imagine I was in Detroit from 1960 to 1978 before I went to Stanford. Things were much different in the '60s and '70s from an information standpoint, from an awareness standpoint.

I mean, fortunately I came from a large family of five boys and we all played sports. And sports were just a great way to meet people and to compete.

Dr. Alexandria White: That's right.

Mark Mordell: And that afforded me an opportunity to leave the public school system and go to Catholic League School I played, football was my primary sport at that point. And to get a look at, have colleges take a look at you.

Fortunate, at the end of the day, I ended up getting a full ride offer to Stanford. And that's how I ended up in California, which at that time was just like being on the moon. Given, I grew up very, very, very middle class. I mean the first plane I was ever on was my recruiting trips. So ended up changing my life by leaving Detroit and coming out here.

But I do think from then on it was just a work hard, be true to yourself kind of a thing. And doors opened at that point.

Dr. Alexandria White: That's right.

Mark Mordell: And every position that I had was through connections and through hard work. And I never thought I would be even, I took over as CEO in 2012. In 2010 or '11 there was no, if you asked me if I was going to be CEO of this bank, even though I was already chairman, I would've told you you're nuts.

And it just felt right at the time. And here we are. I took it over at, we were about 300 million, 350 million. And we're 2.2 billion at this point. So it's been a fun journey, but it's been not without its challenges.

Dr. Alexandria White: That's good to know people's background. It shows how you show up as a leader. Yes.

Chris Riback: You mentioned the inclusive feeling that you've really worked to create at your bank. And you really characterize that as a sentiment, as emotion, as feeling about belonging.

And you didn't talk about, and this is a point of curiosity, many discussions today around inclusiveness it's about gender, it's about race, it's about background. And so I'm wondering, what does an inclusive environment mean to you?

Mark Mordell: Well, what I've tried to create in being inclusive is accessible.

Dr. Alexandria White: Yes.

Mark Mordell: Is having a dialogue. Because it's my feeling in general, if you got two willing parties that are honest with each other, you can find a solution, unless you've run it off the rails. So I'll go back to what I said earlier about everybody has a role.

When I first started my first company, I was invested, had my largest investor was in just outside Munich in Germany, ran a series of wellness clinics, had 3000 employees. And he picked me up at the airport the first time I ever visited his headquarters. Picked me up the airport, drove me down to Bad Füssing, and I checked into his wellness center. And we pulled up and it's a hotel as well. And we pulled up and all sorts of people worked there. Baggage people, cleaning people, doctors, the whole thing.

He took my suitcase out of the trunk. He wouldn't let me carry it. Several of his employees came over and said, "Here, I'll take that. No, I got it." He walked me himself up to the sixth floor to my room. And I was there for a couple days and it just observed. He talked to everybody. I mean from his CEO to doctors, to nurses, to bed pan cleaners, you name it, because everyone had a role there.

He made himself completely accessible to his people because he knew he was going to hear the real story from whoever he was talking to, if in fact they weren't intimidated by him. And so that always stuck with me how humble he was, especially in a country like Germany. And this is in the early '90s. So this is when it was still more formal than it is today. And he was unique in that way.

And so the companies I ran beforehand, previous to this, all had maybe a maximum of 20 people. When I came here into this organization, it took me a little while to figure out what we wanted to be and what I needed to do because I had to figure out who the employees were. And that accessibility matters, I think. And is that another form of in inclusiveness or inclusivity? Yes, I think it is at the end of the day.

Find the common ground that's needed. Be interested, care. And that goes a long way. I mean, so that's what we tried to create here is have young people having access to more senior people. Getting the truth, having collaboration. I mean, in the environmental graphics that we have around here that Alex and Diane have seen, it's all came from the employees based on surveys of what did it take? Tell me some adjectives about what it takes to be here at Avid?

And so that works from a business and social standpoint, if in fact you'd really want to understand the person on the other side of the table or persons on the other side of the table. And you know what drives Chris or what he might be thinking about. Or Diane or Alex for that matter. And I think that's what really what we wanted to do is have this open, transparent atmosphere.

Because I tell everybody "I don't like surprises, so I don't want to be surprised." So I don't plan on surprising anybody here to the best of my ability. And I think that's just evolved. That concept has evolved into more sophisticated inclusion. But that's based on having more people than one or two driving the bus. That comes because now we're a pretty diverse company and it's important to a lot of people. And they can run with it and promote that culture because it is in the DNA, I'd like to hope in the organization.

Dr. Alexandria White: So you talked about inclusion with your company and your colleagues, but we know that Avid Bank is more than brick and mortar. So where does this inclusive sense of belonging, how are you stretching it into the community? We know the Community Reinvestment Act for Black and brown neighborhoods, financial literacy. What is Avid Bank doing to stretch that into the community?

Mark Mordell: We've done a number of things. And what I've wanted to try and create was something that we can lean into besides just writing checks. Because we have really a lot of great people here. Some of us are becoming dinosaurs, but our younger people are unbelievable how they can relate to a person younger than them, a little bit better than maybe I can being the old white guy, CEO.

So we've gotten behind some organizations like ACE Charter Schools, which serves East San Jose. Peninsula Bridge, Junior Achievement. Where we put on these internships and events for people at a young age that would not be exposed to this type of atmosphere unless they were in some sort of organization that they could get here. So we have internships every summer that run for three weeks for anywhere from five to 10 people, so they can get exposed to what else is out there. All they know about a bank is you have a checking account and Mom goes to the ATM or something like that.

Dr. Alexandria White: Okay.

Mark Mordell: Be able to be part of a, have lunch every day, have badges, and a computer. And be lectured to and do these projects and they can see other opportunity. And that's all we want to do. We're not time to recruit them to the banking industry, but we want to expose them to as much as possible.

We've done financial literacy classes to the parents of these organizations as well as the students. Really getting behind things in the community besides just writing checks is just a much better ... It's worked really, really well for us. We pack fruit, we read to second-graders or first-graders. We do all sorts of things in the community and people really get into it. Because it's not a one and done type of thing that we not only write a check, but we do show up and give some people hours that are pretty significant.

Chris Riback: Mark, this is a podcast for business leaders, business people. People worried about bottom lines, worried about stakeholders, worried about shareholders, worried about revenue. What's the business case?

And some of the context around that is you're as aware as we are that fingers have been pointed very recently around some of the banking failures. That some of the companies, they were too woke, they were too focused on DNI. They took their eyes off the ball and the implication is that that directly negatively influenced the bottom line. That got them into financial trouble. What's the business case for your argument for inclusiveness?

Mark Mordell: First, I might add that this is one of the unfortunate things about the environment that we're in, is people choose to focus on the wrong things. And I think that narrative about them being too focused on DEI or ESG and inclusion is one of those things that are not focused on the right things, first of all.

Could you make an argument that they took their eye off the ball? I can argue all day that they took their eye off the ball because it was a self-inflicted failure at this point. Would I blame it on one segment or this segment? The answer is I don't see that. They're a much smarter organization than that, to put that as number one priority and have it go south.

So the business case to do it is, I didn't realize how important it was because I never had to articulate it very much. What we started several years ago was more of this accessibility, which turns out to be inclusiveness, where everybody's rowing the same oar. We didn't know we were doing it, it just happened.

And so our company is diverse from a gender perspective. I mean full-time employees. I think the number's like 51% men and 49% women at this point. And we are on the high 40s of non-white. So we didn't do this with necessarily a plan in mind. The business cases played out for itself. And I didn't even realize that until I talked to Diane and to Alex about define these things for me. I don't understand what you're saying.

Dr. Alexandria White: You were already doing them. You were already doing them.

Mark Mordell: How do I go about doing it?

Dr. Alexandria White: Yes.

Mark Mordell: Where since we are significantly women and non-white, is we see the benefit of that because we can tackle darn near any problem out there. And I don't think the white people here and the non-white people here, the males or the females, have any specific agenda out there to grow their sector. It just happens organically.

And I think the communication that we have in this organization, which is never perfect. But I don't think people are scared or concerned to speak their minds, which is where I wanted, which is I wanted to have it. I don't want anybody saying, "It's not my business." Or, "I'm out of my lane." If you're out of your lane, you got to be really outside your lane. But if you see something, you got to say something. If something's not working right or some.

And I think that's the whole dynamic where people aren't scared to talk and therefore let's bring the problems forward to a senior executive. Let's spot the areas that aren't going real well, or are rocky, or whatever it is, and let's fix them and not let them fester until they break. And I think that is the benefit, not just to the outside community, but building a trusting environment internally gives you a lot sooner look at your problems, which gives you a lot better opportunity to fix them, as opposed to being too late.

Dr. Alexandria White: So what you are describing is called psychological safety, Mark.

What do you say to the CEO who's listening right now to say, "I'm not quite there. I don't want to be canceled. I want to be where Mark is, but I'm just a little hesitant." What would you say to him or her?

Mark Mordell: I think it's okay to say, or to tell whoever, the people you're trying to influence, that I don't know quite what I'm doing, but this is where I want to get to and this is what I think we should be doing. And build some consensus.

So it will take being a little vulnerable. I mean going, telling your C-suite, "I think this is important. I'm not that good at it, or I am uncomfortable, or I am comfortable." Whatever the narrative is, you got to start somewhere. And kind of break it apart a little bit to see what you want to do and not try and be everything to everybody because we're certainly not.

I think you got to take, what do I have? How can I develop what I have to establish the credibility of what we have before I embark on another program? Because if you don't have buy-in from a number of people inside the organization, you'll be chasing your tail. So I think you work with what you have internally first by telling them where we want to go. Build the credibility there and then take it on the road, however that may go, depending on whatever your objectives are.

Dr. Alexandria White: Thank you.

Chris Riback: Mark, thank you. I'm hearing that these are efforts that require some parts of leadership, some parts of listening, some parts of action, and some parts of corrective action perhaps. And maybe that all goes under leadership.

Thank you. Thank you for the time that you've taken with us and thank you for what to be obvious, the care that you take with your employees, your team, your colleagues, and the assets that are under your care.

Mark Mordell: Oh, thank you. I appreciate the opportunity and I wish you all the best and hope to see you again sometime soon.