Learn About Opportunity Zones
White Virtua Partners Logo
Getting the Big Idea Right | September 10, 2020

Getting the Big Idea Right | September 10, 2020

September 10, 2020 Other

 

This week, I write to you from the Nixon Library where Environmental Protection Agency Administrator, Andrew Wheeler, provided remarks to a small audience in the Rose Garden. The 50th anniversary of the Environmental Protection Agency (“EPA”) was the subject of Administrator Wheeler’s comments. He gave a thorough review of the organization’s history, mandate, and a vision for the next fifty years of living in a clean and safe world. He outlined the steps he has undertaken to ensure transparency and lead structural reforms within the intergovernmental process.

Administrator Wheeler is one of those civil servants who has given his life’s work to the country. Before serving in the President’s Cabinet, he worked in industry and Congress, mastering an understanding of every community around the country that could be helped by good government. I have admired his approach to problem solving and how he empowers his teams to work for the American people.

Read More…

As we complete the first week of September, many families are feeling the relief of their children returning to school—or not.  Every community is dealing with social distancing and containing the spread of the Coronavirus differently. The Center for Disease Control reports that 1 in 4 young adults considered suicide in the past 30 days. It is more important than ever to check in with others in your life.

Earlier this summer, I taught a course with pollster Frank Luntz. From his research on public opinion, Frank assigned the word “vengeful” to the spirit of the American electorate this cycle. Karen Donfried, head of the German Marshall Fund, recently penned a public letter which said that America is really suffering two pandemics. First, the Coronavirus.  Second, what Niall Ferguson calls the “political hate industry” which amplifies contempt and division in American daily life.

 

CBS News is out with survey data this week which shows the downward spiral of public trust in national media news about the Coronavirus. In fact, Americans have consistently distrusted the national media more than they do the President, the Center for Disease Control, or their own Governor.

 

Many of us know Quinn, Coach, and Brad – the senior leadership of Virtua and Hotel Equities, to be great mentors. They have each been a huge part of my personal and professional development over the past many years. They each possess the common quality of listening to others in a way that affirms the dignity and confidences of others. They arrange and rearrange the talent on our teams with the overriding characteristic that they believe in others. As I think about a healthy workplace, particularly in a Coronavirus-world, mentors at home and in business are essential to a healthy and productive workplace.

 

 

In a wonderful remembrance of his former mentor, Henry Kissinger said of Fritz Kraemer, “He was the greatest single influence of my formative years, and his inspiration remained with me even during the last thirty years when he would not speak to me.”  Kissinger would go on to say that Kraemer had the gift of helping “discover qualities in young people they did not always know they possessed.”  I have always been moved by the confidences which Kraemer inspired in Kissinger.  And—to think, those confidences transcended a period where the two men would not even speak. Kissinger biographer, Walter Isaacson, learned that Kissinger discovered from Kraemer that it took approximately 18 months to fully master a subject in order to ultimately influence its understanding. Isaacson asked if Kraemer had “discovered Kissinger,” to which Kraemer replied, “I helped Henry discover himself!”

When I first started to work with Hotel Equities, I immediately knew that there was something different going on in the corporate culture. Coach and Brad were not just leaders – they were mentors. Their kindness and respect for their employees and guests was evident in my first handshake with both of them. They are genuine and sincere. They bring a spirit to their corporate philosophy that has changed the way I think about problem solving. I have come to learn that one of the big reasons that Hotel Equities is so successful is because of how they treat people. Every employee and every guest leaves better because of their experience.  Coach and Brad share the following 12 points with their team, and I hope you find it as refreshing as I do every time I re-read each item:

1) Do unto others as you would have them do unto you.

2) You never get a second chance to make a first impression.

3) Hire an attitude and teach them the business.

4) Inspect what you expect.

5) The greatest leaders are the greatest servants.

6) Wherever you are, be there.

7) If it were my money, would I spend it?

8) Nothing happens until somebody sells something.

9) Guests aren’t always right, but they are always guests.

10) Having integrity is doing the right thing when no one is looking.

11) Lear from your mistakes.

12) All people matter to God.

Professor Huggy Rao at the Stanford Business School breaks the science of culture into four distinct categories:

One, the alignment of goals, strategy, and how we are going to execute them.  Premortem success and premortem failure.

Two, the participation of each stakeholder needs to be engaged with ownership.

Three, communicate expectations relentlessly. When Continental Airlines went through their restructuring years ago, they would send weekly newsletters and even leave voicemails on all employee machines saying, “we are going from worst-to-first.” As Jack Welch says, don’t be afraid to be repetitive, boring and relentless. It may take as many as 7 times for a message about culture to sink in.

Four, reward systems to drive behavior.

 

 

 

 

 

 

 

Professor Jennifer Lerner at the Harvard Kennedy School breaks down the science of positive relations between two people.  This can be applied broadly, from a sales call to rediscovering your marriage. Lerner’s research illustrates that a ratio of 3:5 of the following categories makes for a healthy, positive relationship. As individuals achieve a 5:5 ratio, they have the most positive relationship:

Affiliation: Common points of light. Where are individuals connected?

Appreciation: Do both parties take the time to share what they appreciate about the other and do so in a way that affirms their dignity?

Autonomy: Can both parties say that they feel respected from their perspective?

Status: Does the relationship affirm status, both internal and external to that relationship.

Role: Is the confluence of a relationship part of a larger structure of mutually-dependent roles and responsibilities.

In 2017, National Geographic published a report on the science of happiness. It revealed that there are three attributes to happy people. They experience pleasure, purpose, and pride.

Pleasure: How many times you smile, laugh, or find joy in a day.  This is the science of positive effect.  Philosophically speaking, we construct our realities and therefore we can shape how we experience happiness. This is what Abraham Lincoln was describing when he said, “Most folks are about as happy as they make up their minds to be.”

Purpose: Aristotle said that happiness comes only from a life of meaning – doing what was worth doing. Gallup measures this kind of happiness by asking respondents whether they “learned or did something interesting yesterday.”

Pride: This is not a boastful pride but rather one’s sense of satisfaction in themselves.  Social scientists call this evaluative happiness when they as “do you take pride in what you have accomplished.”

In the Sutras, Buddha teaches that one can use breath to achieve concentration.  Peace is not the absence of difficult circumstances, conflict, or complexity – it is how we manage those difficult circumstances from within. We all have the same hours in the day.  Successful mindfulness manages time, place, and breath as energy.

In a world where video calls and six feet of distance have taken the dominant form in how we conduct everyday affairs it is important to remember that breath is how we guard our minds.  Machine thinking is the opposite of mindfulness. Mindfulness is the miracle by which we master and restore ourselves. Measure your breath. How deep are you breathing? Can you breathe deeper to find and feel wholeness in your body enough to see the world as a miracle around you?

Olympic gold medalist Lanny Bassham tells those who experience loss or suffering to remember, “It’s not happening to you; it’s happening for you.”

 

In his remembrance of Ed Ricketts in The Sea of Cortez, John Steinbeck wrote the following observation after a fire on Cannery Row in Monterey, California had destroyed his laboratory. It is Steinbeck’s literary genius to discuss such things as the philosophy of truth, through the eyes of his characters:

After the fire, there were a number of suits against the electric company based on the theory – later proved wrong, that if the fires were caused by error or negligence on the part of the company, the company should pay for the damage. Pacific Biological Laboratories, Inc., was one of the plaintiffs in this suite. Ed went over to superior court in Salinas to testify.

He told the truth, as clearly and as fully as he could.

He loved true things and believed in them.

Then he became fascinated with the trial and the jury and he spent much time in court inspecting the legal system with the same objective care he would have lavished on a new species of marine animal.

Afterwards, he said calmly and with a certain wonder: “You see how easy it is to be wrong about a simple matter. It was always my conviction, or better my impression, that the legal system was designed to arrive at the truth in matters of human and property relationships.”

“You see, I had forgotten or never considered one thing: Each side wants to win, and that fact warps any original intent to the extent that the objective truth of the matter disappears in emphasis.”

“Now you take the case of this fire,” he went on, “both sides wanted to win and neither had any interest in—indeed both sides seemed to have a kind of abhorrence for— the truth.”

It was an amazing discovery to him, and one that required thinking out. Because he loved true things, he thought everyone did.

The fact that it was otherwise did not sadden him. It simply interested him. And, he set about rebuilding his laboratory and replacing his books with an ant-like methodicalness.

 

 

As investors, developers and managers in the hospitality industry, Virtua Partners and our affiliate Hotel Equities keep a close eye on the factors and fundamentals affecting the hotel industry. For those interested, we have produced an in-depth look at the hospitality industry that offers key data points, industry outlooks and more on the broader commercial and capital markets sector.

We encourage you to view our latest installment here.

Oliver Schwab is executive vice president of government affairs at Virtua Partners. Oliver supports and provides strategic guidance to the Virtua team, investors and owners with an active voice, shaping and understanding government policy.

In additional to Oliver’s work with Virtua, he leads a family office that he co-founded. Oliver is also trustee and treasurer of a private foundation. He served as a chief of staff in the United States Congress from 2011-2018. Oliver has experience as a principal in tax, trade, financial services and national security policy. He continues to support public diplomacy as a national security scholar.

Oliver is a visiting lecturer at the European Business School in Germany and the University of Warsaw in Poland. He is also a graduate student in strategic studies at the United States Naval War College, China scholar at the Center for Strategic and International Studies, and has been a fellow at the Woodrow Wilson Center for International Scholars and the Council on Foreign Relations. Oliver focuses his research on the relationship between policy, strategy and decision making. He and his wife Ana are the incoming cabinet co-chairs at the Thomas Jefferson Foundation.

 

 

This week, I write to you from the Nixon Library where Environmental Protection Agency Administrator, Andrew Wheeler, provided remarks to a small audience in the Rose Garden.  The 50th anniversary of the Environmental Protection Agency (“EPA”) was the subject of Administrator Wheeler’s comments. He gave a thorough review of the organization’s history, mandate, and a vision for the next fifty years of living in a clean and safe world. He outlined the steps he has undertaken to ensure transparency and lead structural reforms within the intergovernmental process.

Administrator Wheeler is one of those civil servants who has given his life’s work to the country.  Before serving in the President’s Cabinet, he worked in industry and Congress, mastering an understanding of every community around the country that could be helped by good government.  I have admired his approach to problem solving and how he empowers his teams to work for the American people.

Of interest to students of American democracy, here is a quick study of the EPA: It was first created by Presidential powers fifty years ago – in 1970, Congress overwhelmingly passed, and President Nixon signed, the Clean Air Act and the National Environmental Protection Act (“NEPA”), and two years later the Clean Water Act was signed into law as well. Today, the EPA is a vital regulatory agency providing environmental standards and funding to communities to support the environmental stewardship of America.

No remarks by a member of the President’s Cabinet would be complete without a shout-out to Opportunity Zones. Administrator Wheeler cited the $75-billion investment which we featured in last week’s newsletter. He also shared the statistic that African American unemployment was at the lowest figure ever recorded in 2019 – in part, because of Opportunity Zone investments.  Opportunity Zones, Wheeler said, have been a driving catalyst in bringing over one million of our fellow Americans out of poverty.

At Virtua, we take these kinds of statistics to heart, because we have helped lead the nation in best practices for how best to unleash capital innovation in Opportunity Zones, creating a generational transformation in jobs and entrepreneurship. Our investors and owners have come to learn our strategic approach is not just creating wealth but also leaving our communities healthier and stronger.

On the subject of health, this week, we will explore the unfortunate statistic that so many of our fellow citizens are struggling with mental health as a reflection of the broader context of the struggling soul of America.  We discuss the science of happiness, culture, and positive relationships – and look to the ancient past of Buddha’s teachings to draw perspective on how to find peace amidst conflict. I have included a work of John Steinbeck at the end, in the hope that you find his philosophy about “truth” to be as thought provoking as I found it as I finished The Sea of Cortez this week.

Next week, we will return to more traditional insights about global and domestic affairs, with a deep-dive into the Marketplace Lending Program and other questions which business leaders may have about federal liquidity policy. I will report on the major advances to achieve peace in the Balkans and Middle East, and I even project what might be the ultimate October surprise for the November election.

Finally, in my travels to and from California this week, it was not without observation that 3/5 of my flights were fully sold-out.  Yes, we all still kept our distance and kept each other safe: The center seats were clear.  It is safe to say we are bringing back the American economy and the travel sector is as gracious as ever.

Oliver Schwab

Yorba Linda, CA

September 10, 2020