Based on research by Siyu Yu

• Accurately perceiving and navigating social hierarchies is critical to workplace and personal success.
• People who accurately perceive group social hierarchies tend to form higher-status networks.
• People who accurately perceive social hierarchies are also typically high performers, in part because of their high-status connections. 

Social climbers get on people’s nerves by constantly vying to be close to whoever is in charge. No wonder disparaging names for them abound: opportunists, social climbers, clout chasers. To those around them, the climbers’ motives are transparent and their undignified antics laughable – until they succeed. 

In a recent paper, Rice Business Professor Siyu Yu and Gavin Kilduff of the NYU Stern School of Business looked closely at social climbers’ habits and their outcomes. The researchers concluded that these industrious networkers get a (partially) bad rap. In fact, the rest of us could learn from them.

To conduct their research, Yu and Kilduff launched four separate studies with a total of 1,334 people in university and corporate settings in China and the United States. Participants were asked to identify individuals in their study or workgroups who were especially “respected, admired or influential.” The respondents whose choices were also deemed high-status by the rest of the group were labeled accurate perceivers of “perceived status hierarchy” (PSH). The respondents whose choices were deemed low-status by the others were labeled inaccurate perceivers of PSH. 

The researchers then asked participants whom they sought out for advice and assistance. Those who previously tested accurately for PSH, they found, had more high-status contacts than those who tested poorly. 

PSH accuracy was also found to be positively associated with performance, the researchers wrote. There’s a logic to this. People with an accurate understanding of PSH are more likely to seek out high-status members in their social or professional group for mentorship and advice. They may also model the high-status colleagues’ behavior. Through these connections, they’re able to learn habits and strategies. Their alliances with high-status individuals have the power to improve their performance, gleaned from the individuals’ best practices, knowledge and skillsets.

People who are less accurate status perceivers, the researchers said, typically build rapport with individuals who are lower on the totem pole. Through these lower-status members, they may learn inefficient and detrimental work habits, limiting their chances for success. To rise in any competitive hierarchy, it is imperative to identify, align and imitate high-status individuals. 

But who exactly are these coveted high-status allies – and what makes them so valuable to others? Our species evolved to seek proximity and prolonged interaction with high performers, Yu and Kilduff noted. Within homogeneous units, prestigious individuals are typically more competent than lower-status group members. High-status individuals are often generous and group-motivated, so lower-status members benefit from their superior prowess. 

Important as status associations are, the researchers argued, opportunities to interact with high-status individuals are involuntarily limited for people in marginalized groups. No matter how accurate a worker’s PSH discernment may be, systemic forces may keep her from ever speaking – or being listened to – by someone with a high enough status to guide or advocate for her. 

At the same time, research shows that diverse opinions are important for growth and decision-making. To improve efficiency and overall functioning, Yu’s team argued, schools, businesses and other institutions need to create established paths for those perceived as low-status to have access to those higher in status. 

One important tool, the team wrote, is the creation of well-rounded mentorship programs. Another is a process for scouring biases from selection and hiring processes. 

Want to get to the top? Being nice to the receptionist and every other employee up and down the ladder makes a difference. But you’ll also need to seek out colleagues with power and prestige. So the next time you see a status-chaser in action, stifle the righteous sneer. You may even decide to swallow your pride and try to curry some favor yourself.

Siyu Yu is an Assistant Professor of Management – Organizational Behavior at Jones Graduate School of Business. Yu specializes in the micro-foundations of groups and teams.

Gavin J. Kilduff is an Associate Professor of Management and Organizations at the Leonard N. Stern School of Business.

To learn more please see: Yu, S., & Kilduff, G. J. (2020). Knowing where others stand: Accuracy and performance effects of individuals’ perceived status hierarchies. Journal of Personality and Social Psychology, 119(1), 159–184. https://doi.org/10.1037/pspi0000216

By Vikas Mittal

When Jeff Immelt took the helm at General Electric in 2001, he shifted the company’s strategy radically. Under his leadership, GE grew more inwardly focused, relying more on financial engineering and acquisitions in a bid to add revenue and cut costs. The company’s stock plummeted. Yet Immelt stubbornly stuck with what many saw as a failing strategy. 

Strategic planning is a core activity for senior leaders, regardless of business size. Over 88% of all large companies and 80% of small to medium-sized companies engage in strategy planning. For CEOs like Immelt, strategic planning is one of their most important duties, and they take great pains to communicate company strategy to stakeholders. 

But there’s a problem: many are doing it wrong. In the research for our new book, FOCUS: How To Plan Strategy and Improve Execution To Achieve Growth, we found that many CEOs have simply been mistaken in their approach to strategic planning. Contrary to popular belief, our research shows many CEOs fail to make their strategic decisions based on a systemic, science-based, statistical process. Instead, they rely on gut feel, emotions and salient information from past experience. 

In this piece, the first in a nine-part series, I’ll discuss why this is a major problem. In upcoming articles, I’ll show how CEOs can get strategic planning right.

CEOs usually rely on strategic planning to set goals for their senior executives, define major initiatives, allocate and track resources across initiatives, create budgets and hold mid-level and frontline employees accountable. Strategies become the means through which a CEO sets goals, measures success, executes plans and communicates progress to the board and outsiders.

To be sure, strategic planning is a complex process and many CEOs agree current practices need improvement. Immelt, for his part, was unsuccessful at turning GE around in part because senior and mid-level executives weren’t persuaded that his proposed strategy was coherent or would work. As one insider said, “We just became too internally focused and lost touch with our consumers.”

Another example is Wells Fargo. In 2016, regulators fined the bank $185 million for opening around 1.5 million bank accounts and applying for some 565,000 credit cards that weren’t authorized by customers. The bank’s strategy and employee incentives emphasized maximizing sales through cross-selling to existing customers rather than providing customers with real value. 

Like GE and other companies that rely on a budget-based strategy to drive sales, Wells Fargo’s strategic plan prioritized how internal activities affected revenue rather than the effects of those activities on customer value. The problem was not that Wells Fargo’s strategy was poorly executed – it was that the company followed it. 

But what is it, exactly, that makes a strategy fail? When strategic planning goes wrong, our research indicates that it’s typically for two main reasons. First, planning can fail when executives craft strategies based solely on their gut feelings, intuition, emotions and salient beliefs — beliefs that are top-of-mind. When these salient beliefs form the basis of the company’s strategic priorities, mission, or vision, they become a vehicle for executives’ desires and aspirations. 

Strategies based on executives’ salient beliefs often fail because they discount what’s important to create customer value – and customers are the largest component of a company’s cash flow. A company that relies on executives’ salient beliefs, by default, discounts customer value and simply can’t create a healthy and sustainable cash flow.

This is what happened at Wells Fargo, which began using the salient personal beliefs of its leaders to justify its cross-selling strategy. That strategy drove employees to open accounts rather than help customers, ultimately eroding customer value, sinking the company’s stock and resulting in fines. 

The second reason why strategic planning often flounders is executives’ belief that if they simply ask customers what they want, the customers will seamlessly communicate exactly what’s important to them. That’s rarely the case. Instead, what customers state as their desire often differs starkly from what actually creates value for them. 

Take, for example, the relationship between a doctor and a patient. A patient walks into their doctor’s office with a health issue. Imagine what would happen if the doctor asked the patient what medicine and tests they desired and prescribed them. Or imagine the patient simply insisting on certain tests and medications without being asked. In both cases, customers have effectively stated their desires and wants, but the doctor is unable to discern what would truly help the customer. It’s up to the doctor to perform tests and use accumulated statistical benchmarks to detect how best to help the patient. 

Simply put, you cannot create customer value by simply fulfilling your customers’ desires and wants.

Companies need to use the same process – using science, statistical expertise and data – coupled with effective listening, to set a customer-based strategy.

What’s important for customer value, in other words, is typically not be obvious to customers themselves. More often than not, they lack the expertise, data and statistical expertise to state what they need in a conversation. Yet a surprising number of senior executives rely on such conversations or “listening exercises” to unearth surface-level desires and wants and use them to develop a strategy. Such a strategy is doomed to fail. 

Often, adversity provides the opportunity to pivot. During the COVID-19 pandemic, for instance, companies and leaders have been forced to rethink and retool their strategic habits, forced to learn about what’s most important to customers. 

This transformation can be powerful. When CEOs continue to evolve – embracing humility and no longer relying on past experiences, emotions or gut feelings – they can organize around the most important, rather just than the most salient, customer needs. They can simplify their plan. As a bonus, a cleaner, simpler strategy will be more engaging to employees.

CEOs can get strategic planning right. For companies willing to dedicate the time and resources to strategic planning, the research we describe in Focus: How to Plan Strategy and Improve Execution to Achieve Growth offers a road map of exactly how to do it.  

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

Rice Business Wisdom will publish a series of articles that discuss the top strategy planning inhibitors, what gets in CEOs’ ways and what leaders should do instead to ensure their company’s success.

Rice Hoover, a Rice Business EMBA student and veteran, talks about how the EMBA program has challenged and enriched his professional life.

Dan Dobesh, a professional evening MBA student at Rice Business, shares how the Rice MBA has helped him gain confidence at work, change his career trajectory, and bring value to himself and his employer.

Bethany Cuenod shares how the Rice MBA empowered her to take a risk, leave her full-time job and gain new employment through an internship. Bethany discovered growth opportunities and new career trajectories through the Rice Business Professional MBA Program.

Rice University’s Jones Graduate School of Business will host the sixth annual Diversity, Equity and Inclusion (DEI) Conference Oct. 29. The event is designed to provide a forum for awareness, dialogue and skill-building around DEI issues as they relate to the business world.

The Jones School endeavors to create a rich learning environment that considers and appreciates a multitude of perspectives, which leads to better decision-making. The virtual event will include speakers and panels discussing topics such as “Inclusivity and Belonging,” “The Action of Allyship” and “DEI Conversations in the Workplace.”

What: Rice Business' Diversity, Equity and Inclusion Conference, "Sparking Success: The Intersection of Business and Diversity, Equity and Inclusion."

Who: Speakers include Stefanie Johnson ’02 and ’04, associate professor of management at the University of Colorado Boulder’s Leeds School of Business; Peter Rodriguez, dean and professor of strategic management at Rice's Jones School of Business; Sofia Pertuz, founder and lead strategist at Mainstream Insight LLC; Natacha Buchanan, director of inclusion and diversity at Phillips 66; Mark Crawford, senior vice president of DEI at BP; and Robert Gaudette ’01, senior vice president at NRG Business.

When: Friday, Oct. 29, 9 a.m.-4 p.m. CDT

Where: Online; the conference is open to the public and registration is $50.

For the full conference schedule, visit https://business.rice.edu/rice-business-diversity-and-inclusion-conference#agenda.