Omaha Community Foundation

An Interview with Michael Fahey, Chair of The Omaha Community Foundation and Former Mayor of Omaha
By Aaron Smith and Jaime Stutheit, Creighton University MBA students

Tell us a little bit about your background.

I was born and raised in Kansas City, and I went to Rockhurst High School my freshman year. I returned to Redemptorist, where I had gone to grade school, for my sophomore and junior years. I had just been elected as student body president when the Archbishop decided to make Redemptorist into an all-girls school, then I had to go Bishop Lillis High School. I am the youngest of four children, with two older sisters and one brother. I graduated High School in 1961, and got several offers to play basketball from different colleges. I chose to attend the University of Dallas in Texas. It was a fairly new school, and my first year they had a basketball program that went 2-22 and they dropped the program. So I had to leave there if I wanted to keep playing ball. I transferred to Highland Junior College in Kansas to play football, where our team went 9-0 and did pretty well. After my second year of college, I dropped out, got married, went to work for a transportation company and got transferred to Denver, where I had two kids in 1968 and 1970. My brother worked for same company I did and convinced me to move to Omaha and complete my college degree. So I packed up two kids, a trailer and moved to Omaha and entered Creighton as a sophomore in May of 1971. I graduated Creighton in May of 1973 while working full time. I had entered Creighton at age 27 and left at 29, so I was a pretty non-traditional student. After college, I went to work for a guy in the title insurance business, and that ended up being my career path. After working with that company for a few years, I started my own title insurance company.

What did you like most about your work?

In 1978 I started a small company called American Land Title. It turned into a much larger company when I sold it several years later, and it has even grown larger since then. What I liked most about my work was actually building the business. I give a lot of credit to my brother for being my mentor, as my father had died when I was just 14 years old. I was really raised by my mother and brother after that. Building the business was really fun. Some have had jobs in the past where you really don’t like going in, and I had one of those prior to starting my company, but this one was a delight. I loved getting up and going to work, doing things that were a little unusual for the customer base. For example, I would go out in winter months and take donuts and coffee and talk to realtors at open houses. I made a lot of friends that way, and by the time they sold the house they would remember me. I did a lot of title insurance that way. I also did a lot of public speaking, talking to people about different financing types. I made myself knowledgeable of all the different financing packages at the time. It was an unusual time, with interest rates as high as 19%, and it was very difficult to do business. Some of the things we did were very tricky, so I became knowledgeable on the whole process so I could be of more value, and that helped me through those difficult economic times.

After starting my business in 1978 we ended up with three offices in Omaha, one in Sarpy County, and five offices in Kansas City. So I had a pretty good little business between both locations doing title insurance. In 1989, I met some people at Norwest Bank, and was on some committees with a particular president there. He called me one day and asked if I’d ever considered selling my business. I told him that I hadn’t thought about it before. They ended up making me an offer I couldn’t refuse, and I stayed on afterwards to continue to run the company. That was very exciting, because we had more financial backing and ended up opening offices in 23 states. In Arizona alone we had 33 offices. That was very exciting, and I learned a lot. A lot of what I learned was that in a small business you’re not exposed to some of the training opportunities you have in a large business. They really put you through some great exercises that I found extremely helpful. A lot of the training was centered on ethics. They practiced what they preached regarding ethics. I thought I was pretty aware of everything, but there were several aspects of operating a large company across different states. Sometimes you have to think differently and think outside the box. I ended up staying with the company until 1997.

After retiring, I found out early on that I wasn’t going to be much of a threat to the Senior PGA Tour. The year 2000 rolls around and had this feeling that I was missing something. I had an opportunity to run for Mayor, so I threw all my energy into that, and I ended up serving two terms.

Very generally, when you think of “ethics” what does it mean to you?

Ethics to me simply means doing the right thing morally.

What core values are important to you?

The number one thing for me is my reputation. I believe that you shouldn’t do anything that will bring shame on you or your family, especially in your business practices. You only go around once in life, and if you screw up like that, people will remember that. It will stick with you a long time. If you have a 30 year career doing the right thing and you slip up just once, people will always remember you for that rather than the 30 years you spent building a good reputation.

Do the moral values you see in the Omaha business community live up to your ethical standards?

Yes, Omaha is a very ethical town. I’ve lived in Kansas City, Denver, Colorado Springs, all over. What I like about Omaha is that there are no barriers to entry for being involved in the community here. If you want to get involved in the community, at any level, people welcome you. That’s not always true in other cities. Sometimes you have to be born in the right family, or go to the right schools. There just isn’t any of that here. When I came in here, people welcomed me with open arms.

What types of pressures do you feel on the job?

We were in the title insurance business, and in that business you differentiate yourself by determining what level of risk you’re willing to assume when insuring a property. That’s where all the push and shove comes in that business, because maybe your competitor isn’t willing to make a concession on a particular issue where you are willing. I think the long-term success of a title company can come from allowing some of that flexibility, but you also have to have some rigid standards in place to make sure that you won’t ultimately jeopardize your company. Also, when insuring a property, you want to make sure that you’re always acting in the best interest of the homebuyer so you’re not saddling him with a lien problem. That’s one of the areas where you want to make sure you have the training, policies, and underwriting standards in place to ensure that the company’s reputation is protected.

With my work as the Mayor, things were completely different. It’s politics. Knowing that whatever decisions you make, half the city isn’t going to like it is very challenging. We had some really rough issues with Elkhorn and the ballpark in particular. I always use what I call the “Mirror Test”. I try to make the best decision I can with the best information I have. I have to look in the mirror and ask myself if I’m doing this for the right or best reasons. I think it’s a test that everyone should use. If you can’t look in the mirror and know to yourself that you made the right decisions – ethically speaking, morally speaking, and in the best interest of the community – you’re probably lying to yourself.

Another thing I learned is that a good “sounding board” for your ideas is valuable. I found in my time as Mayor that often my biggest critic was the newspaper and the media. What I had a policy of doing was to sit down with them, tell them what I was thinking and show them what my numbers were. I wanted to know what their thoughts were from their position. We did that on almost everything we did. I think they really believed in what I was doing, and liked that I would disclose everything to them. A lot of people will make decisions, then go talk to the public about them. I did it the other way around. I found that I got better treatment from the Omaha World-Herald going about it that way. Also, I found that they would often ask questions that I had not thought of, and provided an outside opinion. That really worked well for me.

Describe an ethical situation in business you have faced that was relatively easy to handle.

When I was serving as the Omaha City Planning Board Chairman, we had a development come before the Board that was a new large shopping center. The day we were to make the decision regarding the shopping center, my salesman at my title insurance company came in and was so excited because he had just secured the title order on this shopping center. I had to tell him that although it was great that he was able to get the deal done, we weren’t going to be able to do it, because it was a big conflict of interest for me. Now, telling the customer wasn’t really a big issue for me, but telling the salesman was a lot harder because he lost his commission on that deal. I couldn’t vote to approve the project and then take the order to insure it, because it wouldn’t have been right.

Why do you call the previous situation ethical?

Because it failed my “Mirror Test”. I couldn’t take the deal and then approve the project, because it was a conflict of interest and wouldn’t have been right.

How does it feel talking with us about ethical quandaries you faced? Is it easy? It is uncomfortable?

I don’t think it’s hard talking about ethical quandaries at all. Again, I’ve given myself the “Mirror Test” lots of times, and I feel pretty confident that I’ve always acted ethically in the past.

Talk about the ethical culture at your organization. How is ethics infused in your organization?

At my title company, I expected everyone that worked for me to be truthful, not only with the customers but also with their peers. You shouldn’t do something that will take advantage of someone else. There are a lot of ways to infuse that in your organization – you go back to your mission statement, to your policies, to your training – and you want all those things to align so that you develop an ethical culture in your organization. You want your employees to act ethically; you don’t want anyone doing anything that will tarnish your name and reputation or your standing in your community. When you have 23 states that you operate in, you have different cultures, different ways of doing business itself. It was much more of a challenge when you go to different parts of the country that do things differently.

How did you build that culture of ethics in your company?

When it was just a small company, I was personally responsible for creating the culture. When I sold my company to Norwest, they took on the responsibility of creating that culture through their training and human resources department.

Do you feel the concept of business ethics has changed over the years?

I don’t think so, not much. I think that there are certainly more challenges for young people.We have a much more global economy where the internet and social media can complicate things. We spent most of our time on typewriters and things like that, so things are much different now. Kids now are putting some stupid things on Facebook, and now it seems that employers are using these tools a lot more in the interview process to investigate people. I don’t know if that’s ethical or not, but a company should have the right to know if they’re hiring an idiot or not. It could go both ways on that issue.

Have you had an ethics mentor?

My brother. He was my go-to guy, and still is to this day. He’s a lawyer in town here. When you lose your father at age 14, you don’t really have anyone to go to, so you turn to another family member a lot of times.

What are the biggest ethical challenges you think face the younger business professionals today? Any tips for dealing with them?

Avoid shortcuts and have your own “mirror test”. Ask yourself if your mom or dad would be proud of your decisions.

What made you want to become involved in The Omaha Community Foundation?

I never wanted to stop being involved in the community when I was finished being Mayor. I found myself wanting to stay involved and also wanted to keep my brain active. I can play all the golf I want to play, but

that doesn’t fulfill me. I was given this opportunity to Chair the Community Foundation, and I’ve been doing this since 2009. I’ll probably be here another couple of years, and look forward to continuing to be involved.

I’m also on the board of the Red Cross, helping them. Also, I serve on the Board of Building Bright Futures here in town, and have been involved with that since its inception. We’re trying to keep kids in town in school, and it has been really rewarding. In addition, I serve on a couple advisory boards – one at Creighton University and one at the University of Nebraska-Omaha.

Regarding your work with Building Bright Futures, do you do any kind of formal ethics training?

We don’t do much in the way of formal ethics training. Our biggest focus right now is in early childhood. We have to get to the kids earlier, literally from the womb on. Kids who enter kindergarten unprepared have drastically different outcomes. So we’re trying to get these kids ready for kindergarten the best we can. Also, we’ve started providing health care facilities at the schools now. We received some money from the federal government to implement a before and after school program in some area schools, so we can have tutors there making sure that kids are up on their math and reading skills. We found that a lot of times when a child falls so far behind, they drop out around ninth grade. There’s a lot of this that is centered on poverty, and we know that we have to reach these kids as early as possible. We put a lot of resources in, and we couldn’t do it without the help of Susie Buffett, Dick Holland and Mike Yanney. The whole team has spent time and energy making the program the best it can be. You can’t do everything for everyone, but you can sure make an effort to put a dent where you think you are going to have the best success, and early-childhood programs is where we feel the biggest impact is.

How do you measure success in a venture like Building Bright Futures?

That’s one of the biggest challenges we face. One way we can measure our success is through our Avenue Scholars program. We make a promise to the kids that if they stay in school and graduate, and are in need of financial help, we will pay for their college education or trade school. We’ve seen that most of our kids end up going to Metropolitan Community College after they graduate high school. The program is working really well, and we are constantly measuring whether or not the kids are really ready for that next level of education.