Based on research by Siyu Yu

• Most workers surveyed visualize their organization as either a ladder structure or a pyramid.
• The quality of relationships in pyramid-structured workplaces is higher than in ladder-structured workplaces.
• Ladder-structured hierarchies have lower group performance than pyramid-structured hierarchies.

It’s a paradox of power: research shows that hierarchies often undermine the very structures they are designed to uphold. Within organizations, conflicts between members can erode entire systems. In a groundbreaking paper, Rice Business Professor Siyu Yu shows that even visual perceptions of the hierarchy can influence its success. 

In the first study of its kind, Yu joined a team of colleagues to explore how humans visualize the hierarchies to which they belong – and how that thought process influences group processes and outcomes.

The researchers found that most of the people they studied thought of hierarchies in terms of pyramids or ladders (a tiny minority visualized them as circles or squares). In a ladder hierarchy or stratified structure, each member occupies a particular rung. A pyramid hierarchy is more centralized, with one person at the top and multiple people on the lower levels. Think of corporate giant CISCO, a typical pyramid, versus a mid-size dry cleaning business, with the owner at the top and one person on each rung below, down to the entry-level cashier. 

These are far more than fanciful images, the researchers argued. Psychological research has long shown that individuals think, feel and act in response to mental representations of their environment. Intuitively, the link between perception and behavior has been articulated as far back as biblical times: “As a man thinketh, so is he” – or, for that matter, she or they.

To better understand the practical effects of these visualizations, Yu’s team conducted five studies with 2,951 people and 221 workplace groups. They chose from nationwide pools monitored by West and East Coast American universities. The studies took place in the United States and the Netherlands and included multiple ethnicities, men and women, and income groups ranging from college students to seasoned professionals earning upwards of $90,000 annually.  

In the first study, the team asked participants to indicate the shape that best reflected how they thought about hierarchies: pyramid, ladder, circle or square. In the second study, the researchers measured social relationship quality within different groups: participants were asked to rate their answers to questions such as, “Are your needs met at work? Do you feel socially supported?” In the third study, the researchers focused on professional workgroups, measuring relationship quality, group performance and the likelihood that individuals compare themselves to others in the group. 

Subjects who perceived their working group as a ladder, the researchers found, were more likely to compare their rank and station with others. Their relationships were also weaker: when asked whether they trusted their team members, most subjects disagreed or strongly disagreed. When asked whether they thought about if they were better or worse than their colleagues, they agreed and strongly agreed. These comparisons and lack of trust indirectly correlated with lower performance levels, the research showed.

Perceiving one’s organization as a ladder structure, Yu’s team argued, undermines group members’ relationships with each other and hinders collective performance. In contrast, participants who visualized the same company as pyramids rated radically higher on all three quality measures.

Interestingly, the impact of these visualizations is similar, whether the visualizations reflect an actual company structure or simply an individual’s perception of that structure. “It can be created by both perception and actual rank, for example, job titles,” Yu said in an interview. “So, as a practical implication, companies should think about ways to reduce the ladder system, such as with a promotion system that seems more like a pyramid, or by creating the mutual belief that upward mobility within the company is not a ladder or zero-sum.”

Managers, in other words, need to pay close attention to how subordinates see their workplace. Even if your firm is structured as a pyramid, your team members could perceive it to be a ladder – with a cut-throat climb to the top. For the sake of both work performance and quality of life, Yu said, managers, human resources directors and C-suite members should do their best to discern how their workers visualize the company – and, if the paradigm is a ladder, work hard to reduce the workplace vertigo that goes with it. 

Siyu Yu is an Assistant Professor of Management – Organizational Behavior at the Jones Graduate School of Business Rice University.

Lindred L. Greer is an Associate Professor for Management and Organizations and Michael R. and Mary Kay Hallman Fellow at New York University’s Stern School of Business.

Nir Halevy is an Associate Professor of Organizational Behavior at the Graduate School of Stanford Business.

Lisanne van Bunderen is a lecturer at the University of Amsterdam in The Netherlands.

To learn more please see: Yu, S., Greer, L. L., Halevy, N., & van Bunderen, L. (2019). On Ladders and Pyramids: Hierarchy’s Shape Determines Relationships and Performance in Groups. Personality and Social Psychology Bulletin, 45(12), 1717–1733. https://doi.org/10.1177/0146167219842867

Based on research by Vikas Mittal

This article originally appeared on Chief Executive

According to a 2020 survey, executives spent 44% of their time on non-strategic activities, including day-to-day tactical efforts, unproductive tasks and meetings, politics and firefighting, and convincing others to listen to their point of view.

Why do so many companies come up short in their strategy planning and implementation? Because their CEOs end up playing the role of firefighter, implementer or counselor. Four years of intensive data analysis conducted by the authors has shown the three roles repeatedly emerge, deflecting from strategy and keeping CEOs from elevating their companies.

To truly improve company performance, CEOs must escape the firefighter, implementer and counselor roles and function as strategy leaders.

The Firefighter

The firefighter is a turnaround artist. A company might be struggling due to sudden adverse events or internal foibles. The firefighter swoops in to stabilize the situation.

After Uber Technologies parted ways with its CEO in 2017, the company installed a firefighter CEO while it looked for a new chief executive. In more ways than one, the firefighter takes on the role of an operating officer intent on stabilizing company functioning. But the firefighter does not take on a mandate to shape, lead or implement long-term strategy.

The Implementer

The implementer installs policies and processes to ensure employees perform key tasks with competence. The implementer functions as a caretaking manager who narrows the scope of their remit, delivers on time and stays within budget. The implementer works with middle management and frontline employees to clarify existing goals, policies and initiatives. Implementers are inward-looking and emphasize processes and ongoing initiatives, rather than pinpointing key initiatives or imagining new ways to do things.

For example, a private equity fund retained the chief technology officer of a large company as the CEO of a portfolio company to overhaul its IT infrastructure and implement e-commerce within nine months.

The Counselor

The counselor delegates strategy to others while focusing on relationships, personalities and conflict management. The CEOs then focus on smoothing interpersonal relationships among executives, building teams through hiring and mentoring, empowering their executive teams to act and championing employee engagement and motivation.

For example, the CEO of a healthcare-software startup viewed her role as developing and mentoring young and inexperienced team members. The counselor role can be invaluable for inventors and entrepreneurs launching companies, as the innovators can benefit from mature executive mentorship.

The Strategy Leader

The strategy leader adds value to a company, but not by firefighting, implementing or counseling. The strategy leader helps senior executives focus on customers and rank company-wide priorities. The priorities align the firm’s customers’ most important needs with its senior executives’ time and effort. Guiding sound implementation, the strategy leader helps senior executives develop the correct customer, operational and financial metrics to track employee performance and meet financial targets.

Even strategy leaders must occasionally firefight, counsel and implement. But strategy leaders do not make the functions their priority. They direct their human resources group to counsel, COO to implement and other senior executives to firefight when needed.

The strategy leading CEO focuses the collective energy of senior executives on implementing a clear, simple strategy to satisfy customers’ most important needs. Reassuringly, the process connects the CEO, senior executives and employees directly to their firm’s highest priority customer value drivers.

Case Study: How One CEO Became A Strategy Leader

In this example, an individual became CEO of a construction site management company with $2 billion in sales and more than 5,000 active sites worldwide. A strategy audit showed the company had more than 40 open initiatives that had remained unfinished for many years. Several senior executives disagreed about the company’s direction. The CEO also found a contract for a client with more than 200 sites was underperforming because the site management firm’s service costs were higher than the negotiated price.

The CEO worked with the company’s chief strategy officer to set long-term direction. Using several structured client-assessments they found the company’s two most important customer value drivers and used the results to prioritize their more than 40 open initiatives from most to least impactful. They focused on the six initiatives directly tied to client-value drivers, while pausing or deferring the remaining initiatives. Working with the company’s chief finance and commercial officers, the CEO renegotiated the large customer’s underperforming contract to bring it in line with the most critical value drivers. Determining the company’s customer value drivers also helped resolve differences among regional presidents.

Following the strategy realignment, the site management company’s sales and margins outperformed its peer groups over a one-year period. An executive assessment revealed all senior executives were 100% aligned on strategy by the year’s end, a vast improvement over their initial 21% alignment.

The CEO became a strategy leader by not getting mired into the firefighting, counseling and implementing that consumes many CEOs and, instead, aligning initiatives to customer value drivers.

Image

Vikas Mittal is the J. Hugh Liedtke Professor of Marketing at the Jones Graduate School of Business.

Shrihari Sridhar is the Joe Foster ’56 Chair in Business Leadership and professor of marketing at Texas A&M University's Mays Business School.

To learn more, please see: Mittal, V., Sridhar, S. (2021). Focus: How to Plan Strategy and Improve Execution to Achieve Growth. (1st ed. 2021.) (Edition). Palgrave Macmillan..

Updated from original post that was published on 06/25/2021.

What kind of boss do you want? What kind of boss do you want to be? At Rice Business, we believe leaders come in an array of styles, professional roles and personality types. What they share is the ability to bring out the best in coworkers, subordinates and even their superiors. They also display a singular skillset grounded in Rice Business values: empathetic and collaborative leadership. 

It's a distinctive formula, prized by top recruiters because it leads to effective work teams committed to their communities. In the words of Rachael Goydan, managing director of enterprise operations at Deloitte Consulting, "Rice graduates are now an integral part of Deloitte's fabric, making a strong impact through their excellent problem-solving skillset, broad business exposure and collaborative style of working." 

To nurture these skills, Rice Business offers leadership training through academics, such as Professor Jing Zhou's groundbreaking instruction on innovation, with personal coaching at the Doerr Institute for New Leaders, in practice during the Capstone Courses and Action Learning Project, via the Global Field Experience and, finally, through opportunities to lead peers in team experiences and conferences. 

A Consistent Theme in the Rice Business Experience 

"The MBA experience provides a psychologically safe sandbox for students to strengthen themselves and impact their organizations, industries and society at large," said Erica Njoku, director of student experience. "In the entire Rice Business experience, there's a through-line that helps students recognize the importance of making decisions affirming, listening to and valuing a variety of stakeholder groups." 

The impact of this experience is concentrated, thanks to the collaborative community at Rice Business, where students are both colleagues and leaders. The high-achieving student body includes 170+ full-time MBA students, with an average class size is just 40 people and an 8:1 faculty ratio. 

At the same time, Rice's leadership classroom literally is the world. The semester-long Global Field Experience, part of the core curriculum for full-time, professional, executive and online students, creates small teams to work on consulting projects abroad with students, companies and NGOs. 

The goal: fostering durable, productive professional relationships with overseas businesses and colleagues. Integral to this is a service-learning project, more formally known as Creative Practice, designed to forge bonds and deep understanding in the communities in which students may one day do business. During one GFE in Brazil, Rice Business students went so far above and beyond expectations for one struggling client that the business' income rose by 400 percent. 

Building Empathy Close to Home

Rice Business students also contribute closer to home, through the popular Action Learning Project for full-time students, a 13-week, team-based consultative project, in which student teams provide detailed, actionable recommendations for a company facing major challenges, and the Capstone Program, in which second-year student teams from the Professional and Online MBA programs creative comprehensive strategies for nonprofit community organizations and corporate partners. 

Overall, Rice Business ensures that teamwork and an ethic of public service are ingrained in almost everything students do from the beginning of their MBA journey, said Abbey Hartgrove, director of Global Programs and Experiential Learning. 

Rice Business Values at Work

Image

Julianne Katz (Rice MBA) is a good example of these values at work. As President of the 21st annual Women in Leadership Conference at Rice Business, she took advantage of one of Rice Business' many student leadership opportunities, managing a 15-member committee that worked with 13 corporate and organizational sponsors to launch a high-impact, widely-attended conference during the pandemic. Under Katz's leadership, more than 1,300 attendees, both in Houston and around the globe, heard from more than 45 expert speakers. In addition, Katz was a Rice Business Board Fellow, taking part in a program that engages full-time, professional and executive MBA students as non-voting board members at more than 50 Houston area nonprofits -- again, learning leadership skills while making a difference at the grassroots. 

Access to Professional Quality Leader Development

Rice Business students are also able to access university-wide resources provided by the Doerr Institute for New Leaders, such as one-on-one and group coaching as well as multi-session workshops. The Doerr Institute uses evidence-based practices with an emphasis on measuring impact to develop students cognitively, emotionally and behaviorally to effectively lead themselves, teams and organizations. "The Doerr Institute was the missing piece of the puzzle of my personal development during my Rice MBA journey," said Sujeev Chittipolu (Rice MBA). "The variety of programs at Doerr helped me target and strengthen my skills to become an effective leader. I am seeing improved results at school, at work and, more importantly, at home." 

Quizi (Chu) Liang (Rice MBA) added, "I never had a professional coach before the Rice MBA program and it opened my eyes to a different world of leadership development. Working with the Doerr Institute has helped me gain confidence, convert my weaknesses into strengths and feel proud of myself and my culture." 

Through intensive exploration and reflection, two years of classroom instruction and a smorgasbord of extracurricular and international opportunities, Rice Business conveys a message: leadership is a lifestyle and an ongoing character development process. Few skillsets pay off so well over time, many alumni often say.

"Actively working to make yourself a better leader is not always a comfortable proposition," Herman said. "Becoming a better leader should push you, and -- sometimes -- should feel like a challenge. In addition to the coursework you'll complete in business school, it is important to take advantage of a mix of opportunities that will allow you to shape a bespoke MBA experience, tailored to forge you into the leader you want to become." 
 

Explore the Rice MBA

To boost employees’ creativity, managers should consider offering a set of rewards for them to choose from, according to a new study by management experts at Rice, Tulane University, the University of North Carolina at Greensboro and National Taiwan Normal University.

The study, co-authored by Jing Zhou, the Mary Gibbs Jones Professor of Management and Psychology at Rice’s Jones Graduate School of Business, is the first to systematically examine the effects of reward choice in a field experiment, which was conducted in the context of an organizationwide suggestion program. An advance copy of the paper is published online in the Journal of Applied Psychology.

“Organizations spend a lot of resources and exert a great deal of effort in designing incentive schemes that reward the employees who exhibit creativity at work,” Zhou said.

“Our results showed that the effort may be a bit misplaced. Instead of discovering one reward type that is particularly effective at promoting creativity, what is more effective is to provide the employees with the opportunity to choose from several reward types, if they submit one or more ideas that are among the top 20% most creative ones.”
 

Workers in the study were given a range of options: a financial reward for the individual employee or their team, a self-discretionary reward such as getting priority to select days off, or a donation the company made to a charity selected by the employee. Those choices had positive, significant effects on the number of creative ideas employees generated and the creativity level of those ideas, Zhou and her co-authors found.

The researchers arrived at their findings by conducting a quasi-experiment at a company in Taiwan over the course of several months. Then they conducted a second experimental study that included employees from 12 organizations in Taiwan to replicate the first study’s results and compared the results with a control group.

The studies also found that rewards aimed at helping others, such as making a donation to a charity, might be especially powerful. But for less-creative employees, alternative rewards that benefit those in need might actually lower creativity and should be avoided, the authors said.

The researchers also found that the choice of rewards fostered creativity by raising the employees’ belief in their ability to be creative. Alternative rewards also had a powerful impact on boosting the creativity of employees who earlier had scored high on an assessment of creative personality characteristics.

Zhou co-authored the paper with Greg Oldham of Tulane, Aichia Chuang of the University of North Carolina at Greensboro and Ryan Shuwei Hsu of National Taiwan Normal University.

Owl Have You Know

Season 1, Episode 22

This episode is part of a set of short interviews which were recorded during Alumni Reunion Week 2021. Be sure to listen to the other two Alumni Reunion Week episodes. Ian Hernandez ’11 joins host Christine Dobbyn in the Owl's Nest.

Subscribe to Owl Have You Know on Apple Podcasts, Spotify, Youtube or wherever you find your favorite podcasts.

The Watt Sells Award

Each year, the American Institute of Certified Public Accountants (AICPA) recognizes very top performers on the CPA Exam with the Elijah Watt Sells Award. Watt Sells Award winners must have passed the CPA Exam on their first attempt and have earned an average score above 95.5 across the exam’s four sections.

Nearly 75,000 people sat for the CPA Exam in 2020. Out of those thousands of test-takers, just 89 qualified to earn the prestigious Elijah Watt Sells Award.

Two Award Winners from Rice in 2020

We are exceptionally proud that two members of the Rice MAcc Class of 2020, Emily Rychener and Claire Weddle, earned the Watt Sells Award.

• Emily previously earned her bachelor’s in statistics from Rice in 2019. Emily is currently employed at PwC in Houston.

• Claire, also a “Rice Twice” graduate, earned her bachelor’s in mathematical economic analysis in 2019. She now works at PwC in Stamford, Connecticut.

Well done, Emily and Claire! We applaud you both for this wonderful achievement.

Four Years in a Row!

Emily and Claire’s accomplishment marks the fourth consecutive year that a Rice MAcc alum has won the Watt Sells Award. Our track record is especially noteworthy in light of the purposefully small size of the Rice Master of Accounting program – the MAcc Class of 2020 had just 25 graduates.

Moreover, none of Rice’s Watt Sells Award winners over the past four years had majored in accounting as undergraduates. In just one year, the Rice MAcc provides you the technical accounting and business education needed to excel on the CPA Exam, regardless of what your undergraduate major was.

And Rice’s CPA Exam success doesn’t end with our Watt Sells Award winners. The Rice MAcc program has ranked second highest in the nation on the CPA Exam pass rate for first-time test takers for two years in a row.

To learn more about the Elijah Watt Sells Award and our previous winners, read our blog post: Top CPA Exam Score Winner -- Third Year in a Row!

Find out whether the Rice MAcc program is a good fit for your career goals. Click here for more information about our admissions process. We also encourage you to reach out to us with any questions.