Stephen Nalley: The Power of Flexibility; How I Was Able To Pivot To A New Exciting Opportunity Because Of The Pandemic

Never ask anyone to do anything that you are not willing to do yourself. People do not respect titles. Organizations want to be led by leaders who lead from the front and led by example.

The COVID19 pandemic has disrupted all of our lives. But sometimes disruptions can be times of opportunity. Many people’s livelihoods have been hurt by the pandemic. But some saw this as an opportune time to take their lives in a new direction.

As a part of this series called “How I Was Able To Pivot To A New Exciting Opportunity Because Of The Pandemic”, I had the pleasure of interviewing Stephen Nalley.

Stephen Nalley is the owner and Managing Partner of Black Briar Advisors, which is a small business administration and Veteran’s Affairs Certified Disabled Serviced Connected Veteran Owned Company. He has owned and operated over 200 hotels across the United States and has managed over $2B in Hotel & Resort Assets. He is the author of Relentless Pursuit, where he describes the secret to success as knowing what you really want and have a compelling reason why you want it and having the discipline to sacrifice what we want right now for what we really want later.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

During the Second Punic War, the great Carthaginian General and Statesman “Hannibal” was told by his Generals that it was impossible to cross the Alps by Elephant. He responded by saying “Aut inveniam viam aut faciam” which means “I shall find a way or make one.” Most successful people understand that failure is never an option. Throughout my life and career, this has been my motto. I either find a way or created one. This was true in my Military, Academic and Professional Career. It is one of the things that sets me apart for most people. My mindset has always been “Whatever it Takes”. There is a solution to every problem. We just have to be determined to get there.

Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

It is definitely the Art of War by Sun Tzu. This book was written at some time during the 5th Century BC. The Art of War was Sun Tzu’s Foundations and Principles of how to approach war or conflict strategically. What fascinated me about the strategies contained in the book is that they are still being used and followed today by everyone from the Military to Entrepreneurs. One of Sun Tzu’s major strategies is that in war, the victorious strategist only seeks battle after the victory has been won. This has always stuck with me. I talk about this my book “Relentless Pursuit”. When I was a young entrepreneur, I was much more aggressive and quicker to compete with anyone who challenged me and I found that many times due to inexperience or lack of knowledge, I was caught off guard and unprepared. Throughout the Book “The Art of War”, Sun Tzu puts an emphasis of preparation above all else. Sun Tzu believed that you should know your enemy and their capabilities better than you know yourself. You should never engage your enemy or competitor without first understanding how the battle will go and what the likely outcome will be. I approach everything based on this philosophy. The secret to being the smartest person in the room is to always be the most prepared person in the room.

Let’s now shift to the main part of our discussion. Can you tell our readers about your career experience before the Pandemic began?

I served honorably with the United States Army’s 10th Mountain Division as a Light Infantry Squad Leader. Upon being discharged from Military Service, I attended college and completed a Bachelor’s Degree in Healthcare Administration, Masters Degree in Business Administration and a Doctorate in Business Administration. The first half of my career was spent in the Health Care industry as a hospital administrator, regional sales representative in the biotech industry and business owner. For the past 20 years, I have owned and operated a Real Estate Investment company that specializes in the acquisition and asset management of distressed hotel & resort assets. Today, I am the Principal and Managing Partner or Black Briar Advisors, as well as, a mentor and author.

What did you do to pivot as a result of the Pandemic?

As everyone knows, the hotel industry was devastated economically by the pandemic. The majority of my assets were closed and the industries future was questionable. It was estimated by the American Hotel & Lodging Association that 40% of all hotel assets may never re-open and would become functionally obsolete. Starring at these predictions or statistics we had to re-evaluate position and purpose. One of the things about hotels that is positive is the fact that they are convertible to other uses. They can be converted to Senior Housing, Micro-Apartment and/or Luxury Apartments. While we were evaluating many of these options, I was looking at the statistics on affordable housing, which is another crisis in our Country. Suddenly it occurred to me that we may be able to solve two problems with one solution. The cost to develop new apartments is about $125K per room/door. However, you can convert an existing hotel with good bones to Micro-Apartments for approximately $40K per room/door. These completed units could be delivered to lower income populations at 60% of the cost of new development or even the renovation of an existing apartment facility. The cost to the renter would include utilities. We have been working very hard on making this concept become a reality in many municipalities around the Country. In our model, these units would be smaller but would include all of the amenities of middle-class apartment facilities.

Can you tell us about the specific “Aha moment” that gave you the idea to start this new path?

The Aha moment occurred while reading about the status of the real estate industry and the top story of the day was the quarterly reports from Hilton and Marriott and the second story beneath it was the affordable housing crisis. I was very familiar with the concept of converting hotels to apartments. In the moment that I realized the concept, it was an eye-opening experience because the goal was to work with State and Local Government to develop something that fit their needs and the communities needs. The reception thus far has been very good.

How are things going with this new initiative?

Things are going great. Obviously, it takes time to work with all of the agencies and communities to come up with a product that works, but we are making great strides. We have a project that we are working on right now outside of Ft Benning, Georgia that we are very excited about. This will give us an opportunity to provide affordable housing to veterans, as well as, others.

Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

My life was not always easy and I encountered much adversity along the way. When I was in the 5th grade my teacher was convinced that I had failed for the year and would repeat the grade the following year. My Mother had a teacher parent conference with me present and refused to accept it. The possibility of passing the 5th grade was bleak and would require a monumental effort. My Mother said to me in front of the teacher “You are going to pass the 5th grade even if it kills you”. My teacher explained to my Mom that it was impossible. Earlier, I provided the quote “I will find a way or create one”. My Mother refused to let me quit or except the fact that failure was even an option. For the next month, we eat, sleep and drank Math, Science and English 24/7. My Mother taught me that not only does hard work payoff, but the only way to fail is by quitting or not getting started. I passed the 5th grade, but this lesson stuck with me for the rest of my life. My Mother was always my toughest critic, but biggest fan.

Can you share the most interesting story that happened to you since you started in this new direction?

There have been many things that have happened since we began our new direction, but I am not sure that I have an interesting story. We have faced many new challenges with the majority of them being political. Without being specific, we have encountered many people who are resistant to change and are not very open minded. I have always been fascinated by people who cannot get out of their own way. Einstein once said to stay away from negative people because they have a solution for every problem. Many municipalities are stuck in the pre-covid mindset and despite the fact that the world has changed they are insistent on doing things the same way that they have always been done. They are looking for new development, despite the fact that it is twice as expensive and can not be delivered to renters at a cost that they can afford. These projects are great, but they service the middle class and not the common worker who makes below $22,000 per year. It will take time for agencies to change their policies and expand their box, but we are in it for the long haul and excited about making a difference.

What are your “5 things I wish someone told me before I started leading my organization” and why. Please share a story or example for each.

1. Never ask anyone to do anything that you are not willing to do yourself. People do not respect titles. Organizations want to be led by leaders who lead from the front and led by example. Over the years, I have traveled to many of our companies and I always take the time to get to know that employees that work for the organization. I do this by working with them and doing the work that they do. I have found this to be a great bonding opportunity, but also the chance to get to know them. I have done everything from clean hotel rooms to working security.
2. Be there for your employees. We are always asking the people in the organization to give us 100% and to be loyal to the company. Yet, with many organizations this is not reciprocated. A few years back, one of my general managers was diagnosed with cancer and had surgery and post-op treatment. The manager was hard working and loyal. When her FMLA ran out, we continued to pay her until she returned because she needed the organizations help. The money was not the important thing. Demonstrating that we valued her beyond her job description was everything. This is a part of our corporate culture.
3. Be accountable. Early in my career, I felt like it was important to never be wrong. Employees appreciate honesty and integrity. When I make a mistake. I own it and do everything to right the wrong. A few years back, I made the decision to change and implement a new policy which was not popular and it had the opposite effect that I wanted to achieve. It created a morale issue. After getting feedback from the majority of my staff I realized that I had mad a mistake and promptly corrected the mistake.
4. Be approachable and Listen to the people around you. This continues from my statements above. If you want to know what’s going on in the organization then you need to be approachable. When people are providing you with negative feedback you need to listen. Just because you don’t like it does not mean that it’s not true.
5. Make a decision and be transparent. I have learned over the years that the worst decision you can make is to not make a decision at all. I am in a leadership role and with the position comes the responsibility to make tough decisions. The second part of this is to be transparent and communicate your decisions to the organization. When the pandemic hit many of our companies were forced to close. Many of them due to lockdowns, but others due to financial performance. The decision to close the assets that were not producing was a tough decision, but a decision that had to made non the less. Then assuring that the information was communicated was equally important. Over the next 12 months many tough decisions were required and difficult news had to be communicated on a daily basis. This is not the fun part of the job.

So many of us have become anxious from the dramatic jolts of the news cycle. Can you share the strategies that you have used to optimize your mental wellness during this stressful period?

I do not get caught up in the news cycle or what’s happening on social media. My thought process has always been on what I can control and what I can change. I watch the news every night, but I do not obsess over it. The past 12 months have been a very trying time. Between the pandemic, election, riots, and everything else the Country has been deeply divided. My approach has been to do what I can do. I have friends that got caught up in the liberal vs conservative debates and the doom and gloom news cycle, but I cast my vote based on who I thought was best to lead the Country and moved on after the election. As a business owner there is much to do. There is little time to waste on things that are out of my control. “I believe that every negative thought is a down payment on failure and every positive thought is an investment in my success”. I try to avoid negativity and focus on moving the ball forward. I give the same advice to my clients that I mentor as well.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be?

It is not necessarily a movement, but I would like to bring public awareness to the affordable housing crisis and create funding or raise money to solve the problem. In 2021 the Department of Housing and Urban Development allocated $700M to the development of 5400 units of affordable housing. As you can imagine, this does not even put a dent in the problem. Yet, the 2020 election of the President, House and Senate raised and spent over $20B. The United States Government provides over $50B per year to foreign Countries in aid. There is a way to solve the Affordable housing crisis, but it requires money to create the units. I would like the shot at solving the problem by working with legislators and officials at creating policies that work and would benefit to our population that is financially challenged.

Is there a person in the world whom you would love to have lunch with, and why? Maybe we can tag them and see what happens!

Without a doubt it would be Warren Buffet, who is the CEO of Berkshire Hathaway and perhaps the most genius financial mind of our time. I have heard so many stories about Buffet over the years and have a strong respect for his ability to see around the curve and the general way he runs his organization. Warren Buffet once said “Someone is sitting in the shade today because they planted a tree a long time ago”. I have always loved this quote. Buffet has spent his lifetime building companies that impact the future. I would love the opportunity to discuss his book (The Essays of Warren Buffet) with him in person.

How can our readers follow you online?

I can be found at www.stephennalley.com and/or www.blackbriarus.com

This was very meaningful, thank you so much! We wish you continued success!