Mismatches – and fixing them so that who and what should match up do so – are embedded deep in housing's affordability, attainability, and access crisis.

And housing – which desperately needs fixes to dozens of mismatches – is hardly alone. A piece in today's Wall Street Journal shines a lens on an opportunity area for the broader economy's vaunted frontline labor capacity constraints.

Facing a long-term labor shortage, employers are looking to expand the pool of potential workers. One group—people without a college degree—holds particular promise. They make up nearly two-thirds of the U.S. population over 25, and traditionally have been ineligible for many managerial and technical positions. 

A push by some companies to eliminate degree requirements has opened the door to more candidates. Yet the share of jobs that went to those candidates barely budged after the requirement was lifted, according to a new analysis." 

The analysis in question, from Burning Glass Institute and Harvard Business School’s Managing the Future of Work Project, focuses on both the causes and the consequences of economic mismatches that determine – perpetually – that capable people won't be hired, trained, and given career paths at organizations that may desperately need that capability.

...in most major industries, employers say it is as common for noncollege graduates to outperform degree holders as the other way around.  

[Joseph Fuller, a management professor at Harvard Business School and co-author of the report] and others cite several reasons for the slow pace of change. Automated hiring tools frequently compare candidates to previous high performers, which would favor degree holders. And inside companies, assessing skill requirements for jobs is time-consuming. 

Most challenging, say employers and workforce experts, is changing the behavior of hiring managers. “There’s a tremendous amount of inertia on recruiting paths,” said Byron Auguste, the CEO of Opportunity@Work, a nonprofit organization that helps employers recruit candidates who acquired skills through nontraditional paths." 

A glaring opportunity to subtract a great deal of friction in bringing more low-income and mixed-income housing to the market would be to fix a mismatch that makes it hard for project owners and developers to – easily, elegantly, and effectively – contract trusted minority- and women-owned construction firms to meet local and regional requirements for tax-advantaged affordable construction.

Tough Leaf, a 2023 Ivory Prize top-25 finalist in construction, is a New York-based six-years-young start-up that strives to do just that. Tough Leaf hosts a B2B SAAS platform that empowers certified Minority, Women, and veteran-owned businesses (Diverse Firms) to grow by connecting them with opportunities and capacity-building partners. Tough Leaf does this by seamlessly connecting General Contractors & Developers with Diverse Firms to meet and exceed their compliance requirements on projects.

Tough Leaf makes it easier for developers and builders to meet compliance goals while mitigating performance risks by pre-vetting the firms in the database. While the business from projects with procurement requirements for XBE firms already existed – and, naturally, was already going to XBE firms – by making it easier for the developers and builders to navigate these requirements, ToughLeaf’s product may bend the qualification curve in favor of project owners.

The good news is that Ivory Innovations director of Strategy and Operations Hannah Gable visited recently with Tough Leaf founder and CEO Wissam Akra, and Shaunna Randolph, the head of business development, to delve into their story, what it means to developers and owners, and why it matters critically as part of solutions to housing's chronic affordability, attainability, and access challenges.

You can listen now to Season Two, Episode Three of Ivory Innovations House Party podcast, presented in partnership with The Builder's Daily.

Here's a selection of highlights from Hannah's conversation with Wissam and Shaunna, addressing their origin story, the basics of how the Tough Leaf platform works, what impacts it's begun to have, and where it's all headed.

The Backdrop

Wissam Akra

When I came here from Lebanon in 2013, I had already managed multi-million dollar projects. I came to a respectable school, Columbia University in New York, and when I first graduated, I had very high dreams. I got a job with a reputable construction consulting company, but what I was doing was not the best use, in my opinion. I kept complaining to my managers, their managers, and everyone who would listen. I was doing manual things like filing paper and putting things in the right folders. And it wasn't what I wanted to do, it wasn't where I saw my future. And finally, after complaining a lot, someone took notice and my boss at the time agreed, 'Yes, it doesn't make sense. Why don't we have someone who was a project manager before and has a master's in construction management doing these important tasks?' Finally, they gave me more responsibilities and tasks, which was the beginning of my career in the U.S.

That impacted me a lot because it made me realize that you may have the credentials and the experience, but if no one vouches for you, if you don't have the network, and if you don't have a seat at the table, then none of that matters. People need to see you to be able to give you a chance. That's important and relevant to what we're doing here today.

When I finally got a seat at the table, I wanted to make sure that we pulled up more seats for other people who weren't qualified. That's because I'm not one out of one, I'm not one out of 100. There are thousands like me, whether they're individuals or companies, that are capable, have the experience, and want to do more but are not just given the opportunity yet. That's a major part of our mission and goal here at Tough Leaf."

The Value Proposition

Wissam Akra

The business school playbook doesn't work as much in the real estate construction technology market. The main reason is that customers don't necessarily want to use or learn new software. What they care about is having their problem solved. They want the headache to go away. So we proposed, ‘How about instead of you having to go into our software and filter and search for these companies, you just tell us what you're looking for and give us your requirements? Then we'll do all the work for you. We will go search the database, filter it, find the right companies, pitch to them ourselves, and tell them about your project and see if they're interested in actually providing a bid for you by your deadline. Then, we will provide you with a short list of these companies. So you don't do anything; just give us your requirements; we do that work, and you get a shortlist.

The Tough Leaf Team

Shaunna Randolph

We went from only serving certain states to all of the 50 United States, which was a big deal. The automation process was a very manual process. We have a new product manager, and we're all excited about it. We're a group of incredibly intelligent, experienced, expert people. Where I was able to come in and help is in building that marketing platform and that outreach platform. That meant taking the feedback that our sales team gave us and creating campaigns and experiences that connected with the people they were trying to understand and connecting the dots. I’ve fallen in love with the process of creating a great community, an educational community for our diverse firms. As you can imagine, these firms are all small businesses. They're very busy. They have a lot of big, hairy projects to deal with, a lot of problems and challenges to solve. What I'm trying to do is work with our capacity-building partners to help them solve those challenges in a very educational value-driven way. I’m happy about the great ideas I've been able to pull from our capacity-building partners – these are the pain points that diverse firms are having – and create webinars and other resources that help them solve those pain points."

Tough Leaf's Near Future

Wissam Akra

In 2023, about $200 million went through our platform to diverse businesses. Our goal for 2024 is to get to a billion dollars. There is a thing called a Billion Dollar Business Roundtable Challenge, and if you see the companies that are there, they're all Fortune 500 businesses. I want to see Tough Leaf there. I want to make sure that we're giving as many dollars to minority- and women-owned businesses as possible and to see that impact just keep on growing and being part of this ecosystem. I can't say that Tough Leaf is going to solve all the problems, but it will be a major part of the ecosystem to solve for all that money that's being left at the table."

That money needs a match.