The restaurant business is notoriously tough. Here’s how Rice Business alumni restaurateurs are innovating — in the age of the coronavirus, and for the future.
Deborah Lynn Blumberg
The restaurant business is notoriously tough. Here’s how Rice Business alumni restaurateurs are innovating — in the age of the coronavirus, and for the future.
At Pappasito’s on Richmond and Kirby, staff members slip on gloves and secure masks to deliver to-go orders of sizzling fajitas and do-it-yourself cocktails. In the parking lot, customers who’ve shared their car’s make and model and paid online wait patiently inside their cars, popping trunks as staff approach with their food.
Since Houston — like much of the world — ordered residents to stay at home to slow the spread of COVID-19, limiting food service to takeout and delivery, restaurants have had to quickly pivot. Evy Pappas ’09, an architect by training who helps design new spaces for Pappas Restaurants, now hones parking lot diagrams to make sure traffic flows smoothly for curbside pick-up. She’s on conference calls where team members discuss sourcing the products they need for their new to-go margaritas, including containers for mixes and mini Petron bottles.
Throughout our 55 years of service, this situation is truly unprecedented. In two weeks, we completely changed our business model.
Evy Pappas '09
The restaurant industry has always been difficult and fickle. Research finds that around 26% of independent restaurants fail during their first year. The traditional restaurant business model, with its high upfront investments and hefty overhead costs, makes it difficult for businesses to survive. And now restaurants are facing an entirely new hardship. The uncertainty of the coronavirus epidemic, and the new reality of social distancing, only adds to the industry’s longstanding challenges.
To succeed in the ever-evolving food business, alumni have found creative ways to set themselves apart in a crowded field. In Houston alone, diners have more than 10,000 restaurants to choose from. Rice Business alumni who are beating the odds aren’t letting themselves get complacent. They’re making their businesses stand out and they’re constantly evolving and innovating with the customer top-of-mind. It’s an approach that will become even more important as the dust settles from the coronavirus pandemic.
Keeping It In-House
Evy Pappas works with her father, Harris, who, with his brother Chris, launched one of the most recognizable brands in the Houston restaurant business. What started as a single restaurant, opened by the Pappas brothers in the 1970s, has grown to 107 locations across the U.S., serving 28 million guests a year.
They include Pappasito’s Cantina, Pappadeaux Seafood Kitchen, Pappas Bar-B-Q and Pappas Bros. Steakhouse — all go-to eateries for countless Houstonians. Recently, the family opened a barbecue spot in Duncanville as well as a new sit-down barbecue concept with an extensive whiskey menu, called the Delta Blues Smokehouse.
Being family-owned gives them the freedom to experiment, according to Evy. “This company is very nimble and can do things very quickly,” she says. That’s because it does everything in house, from lawncare to restaurant repairs. The company has a 292-person team that handles maintenance, service, landscaping and fabrication. The Pappas family owns and operates the trucks that deliver its meat and seafood, refinishes and reupholsters its own chairs, and even makes its own chef tables from raw steel. If a piece of equipment breaks, a team member picks up a part from an inventory stockpile in the Pappas warehouses and can make the repair almost immediately.
The company also follows a specific real estate strategy, honing in on spots where their restaurants are highly accessible by drivers, like freeway off-ramps and busy intersections. The Pappas family owns many of the properties where their stores are located.
Evy’s sister Eleni Pappas ’19, who works at the Houston-based engineering and transportation planning firm Traffic Engineers, Inc., also helps out with the business, advising on land development questions.
“When you’re part of a family business, even when you are not officially involved with it, it’s still part of you and something you care deeply about,” says Eleni. “So I’m always happy to help discuss site access concerns, or just any concern that may come up. I love to be a sounding board whenever I can.”
Now, the restaurant chain is focusing on its curbside business. It has adjusted its restaurant hours, reduced the number of menu items, and launched new offerings such as family packs. “And we’ll continue to innovate and change through this very challenging time,” says Evy.
Entertainment Value
At Kiran’s Indian Restaurant, Puja Verma ’12, and her mother, Kiran Verma, who opened the upscale eatery in Highland Village in 2005, have also had to find new ways to serve their customers.
Image
Puja Verma ’12, and her mother, Kiran Verma
The restaurant has been offering curbside pick-up and delivery since Houston’s stay-at-home order was issued, and planned to reopen for in-restaurant dining on May 1. It’s using the same staff each day for the kitchen and in front-of-the-house operations to minimize the risk of infection. As the restaurant’s director of operations and strategy, Puja is relying on staff who can adapt. To address the constraints imposed by the coronavirus outbreak, she’s added family-style menus and made small changes that will likely endure even after the pandemic subsides, such as replacing bowls of after-dinner mints with individually packaged candies.
Reinvention is part of Puja’s job. She helped design the restaurant’s new, larger space near Levy Park, which opened in 2017, and she recently created an intimate lounge area in the restaurant where diners can have a drink or dessert, a concept she borrowed from restaurants in Europe and the California wine country.
“It’s all part of creating an experience,” says Puja, who also helps manage the restaurant’s nearly 70 employees. “In Houston, dining is still a big part of entertainment.”
Zagat’s named Kiran’s the best new restaurant in Houston in 2006. Now Puja is working to boost the restaurant’s prominence on a national level — a task she’s embraced since leaving her oil and gas career last year to work at Kiran’s full time.
H-E-B began selling food from Kiran’s at five of its stores in late April. Puja has other ideas for expanding the restaurant’s reach, including getting its signature chai tea blend onto grocery store shelves nationwide. Another goal is to partner with an airline to serve Kiran’s cuisine in the air.
Puja stays on top of trends by visiting restaurants when traveling and poring over newspaper dining sections and food magazines. She gets inspiration for menu design, dishes and food presentation from colors and patterns in fashion magazines.
“With the restaurant industry, there is a lot of change,” Puja says. “The reason we’ve been successful is that we take everything into consideration. People start ordering Uber Eats and DoorDash, so we’re on those platforms. People start talking about small plates, so we create a small plates menu. And more and more, we accommodate dietary interests, like gluten free, dairy free, vegetarian and vegan.”
High Hurdles
Food service gets a bad rap as a notoriously difficult path to success. But in 2014, two economists tapped data from the U.S. Bureau of Labor Statistics to debunk the long-held belief that most new restaurants fail. They found that just 17% of restaurants close in year one — a lower failure rate than other service-providing businesses, which fail at a 19% rate.
Yet, the restaurant industry still has a laundry list of challenges. Its employee turnover rate is higher than average, due to a reliance on teenagers, students and seasonal staffers. In 2018, the overall turnover rate was 74.9%, according to the National Restaurant Association, compared to 48.9% for all private sector workers.
High real estate costs, climbing worker wages, and the price of high-quality ingredients also present obstacles as restaurants compete for a piece of consumers’ finite budgets.
Food-service businesses have to keep up with industry trends as well. Trends for 2020 include plant-based proteins, eco-friendly packaging, healthy bowls, and ingredients that help relieve stress, says the National Restaurant Association.
Buying into those trends can be expensive, but restaurateurs don’t necessarily have to jump on the latest bandwagon to do well. Thriving restaurants tend to follow a similar, fairly basic recipe for success, experts say. The ingredients include solid people management and accounting skills, consistent customer service — and an exceptional experience.
Testing the Market
In Washington, D.C. as news about the coronavirus intensified, Turner Hoff ’13 initially saw orders for his plant-forward subscription meal service, Vegetable and Butcher, decline as customers instead piled into grocery stores.
“People were panic-buying,” he says. “They were afraid of the unknown.” But customers started coming back for his salads, bowls and breakfast offerings once information emerged that the coronavirus isn’t likely to spread through food.
Since the outbreak, Hoff has adjusted delivery hours and started offering discounts to customers who are struggling financially.
When Hoff and his partner, Ariane Valle, launched the business in 2016, they were delivering to just two ZIP codes. As of this spring, they prepare and deliver around 4,000 meals a week to over 100 ZIP codes. The business has grown more than 100% year-over-year every year. But the pandemic may slow their growth.
As of a few months ago, events were the primary way Vegetable and Butcher attracted new customers. But for now, that’s not possible. Customers are still trickling in from past events, but Hoff worries about what happens when those leads peter out. “We realize our business model doesn’t perfectly fit in with the current environment,” he says, with more people cooking at home. So he’s being proactive. Marketing staffers who once organized events are now interviewing customers about their current needs. And Hoff is considering partnering with community businesses to help drive new accounts. For example, he may link up with a local gym to offer a sign-up discount for its members.
Beyond In-Store Sales
One evening before the pandemic took hold, Ope Amosu ’14 navigated past potted succulents to deliver dishes of fried sweet plantains and Nigerian-style corned beef stew to nearly 100 guests at Houston’s The Flora Culture plant shop. The dinner was one in a series of pop-up events Amosu has hosted over the last two years — part of a strategy to test menu items, gauge interest, and build a culture before opening a brick-and-mortar version of his West African food concept, ChòpnBlok.
Until recently, Amosu combined pop-up dinners at unique locations with one-night restaurant takeovers. Guests filled out scorecards, rating his food and service and answering questions about their spending habits. Since 2018, Amosu has held 22 dinners and takeovers, and so far his strategy has been successful. His events sold out — a recent one within hours — and he collected valuable data he can present to investors.
Image
Ope Amosu ’14
“With our process, we’re de-risking the restaurant experience with this hands-on testing with real future customers,” he said. “It’s a way to have true engagement with a specific set of people for a given set of time. We’re building a following and nostalgia. It’s about creating a true culture and identity for ChòpnBlok.”
But the current climate isn’t conducive to his model, which features in-person dining events with entertainment. Amosu cancelled his March pop-up event and offered refunds to all ticket holders. He’s using time at home to reassess his business plan, evolve his menu and ultimately determine how to best move toward growth once the market stabilizes.
We anticipate that the industry will evolve once it rebounds and we're focused on using this time to be ready.
Ope Amosu ’14
As part of his plan to create a “fast-casual” restaurant celebrating a contemporary version of West African food, Amosu previously took a temporary job at Chipotle to learn firsthand how fast-casual works. He leans heavily on social media for marketing and has linked up with celebrity influencers like musician Jidenna and actor and comedian Yvonne Orgi, benefitting from the exposure he got from providing food for them backstage.
Now more than ever, he’s focused on driving consumer engagement beyond in-store sales, and he’s experimenting with integrating packaged goods and delivery into his strategy. His goal is to share the ChòpnBlọk brand in a way that hedges against unforeseeable disruptions like the current pandemic.
The Future of Food Service
As every industry retools to try to make itself pandemic-proof, the restaurant business is finding itself both highly vulnerable and highly adaptable. Even before this crisis hit, the restaurant industry was constantly evolving, and in the next 10 years, it will be entirely transformed, according to the National Restaurant Association. Some restaurants will morph into hybrids that offer counter service, full service, takeout and delivery, and even meal kits. Data analytics will become more important, while owners will use technology like blockchain and robotics in the kitchen and implement targeted, customized promotions.
At Kiran’s, Puja Verma had already been planning for the future, considering new technology that allows customers to pay their check at the table, keeping their credit card always in sight. But now, she acknowledges that change is likely to be much more dramatic — and she can’t know for sure how restaurants will look a decade from now.
“Will dining continue to be a form of entertainment?” she asks. “Will servers be as needed? Will we still need hosts to take people to their table? The industry is changing so fast,” she says. “I’m excited to see how it evolves.”
Deborah Lynn Blumberg is a Houston-based freelance writer specializing in business, finance and health and wellness.
How we’ve adapted to the new normal during the COVID-19 pandemic.
Jennifer Latson
How we’ve adapted to the new normal during the COVID-19 pandemic.
Over the past few months, as the scope and impact of COVID-19 have become alarmingly apparent, we’ve seen the world transform. At home and abroad, we’ve witnessed courage and compassion, innovation and improvisation, stumbles and successes. Nowhere in the world is it business as usual.
Here at Rice Business, it’s business unusual. The business of everyday life continues — just in very different forms than we’re used to. Classes go on, research continues, and admission information sessions are still happening, but in ways we’d never have expected three months ago.
The safety of every member of the Rice Business community — students, staff, faculty, alumni and applicants — is our top concern. And we’ve had to innovate faster than ever before to accommodate the needs of everyone in our community who’s been impacted by the pandemic. Which is to say: everyone.
That started with taking classes online on March 16, a week before the rest of Rice University. It continued when the Faculty Senate unanimously agreed to allow all graduate students to choose pass/fail grades instead of letter grades for up to two courses this semester. It extends to prospective students as well: MBA applicants who are unable to take the GMAT or GRE because testing sits are closed are temporarily allowed to provide ACT or SAT scores instead. And the first ever virtual admit day for full-time MBA students kicked off with an online partio at the beginning of April, when newly admitted students were split into groups for trivia and getting to know each other.
In the midst of all this change, we’ve also launched a new program: MBA Early Admit, which allows promising undergraduates to apply to the Rice Business Full-Time MBA during their final year of college and reserve their spot two to five years after graduation. Students are encouraged to explore all sorts of career options, from traditional companies to startups, to help develop their professional and leadership skills during the required pre-MBA work. The deferred-enrollment program is available to Class of 2020 graduating seniors from Rice as well as other universities and has a June 30, 2020 application deadline.
Alumni have convened virtually for coffee hours and networking events in recent weeks, as well as for a webinar on angel investing in uncertain times. And, of course, we’ve taken this issue of Rice Business magazine online for the first time.
Faculty and staff, meanwhile, are keeping connected via Slack and on Zoom, including in the “Brady Bunch”-style town hall meeting pictured here. We are all getting used to seeing each other remotely instead of in person — and discovering that we can still find connection from afar. Videoconferencing brings us into each other’s homes, offering glimpses of personal lives that we don’t always get to see. We’re getting to know each other’s new coworkers and classmates — particularly the furry ones with no respect for personal space.
We’re also seeing members of the Rice Business community rise to the challenges this pandemic has posed. When MBA student William Jon Weintraub, who is deaf, realized that he wouldn’t be able to get the information he needed from online lectures, SPO director Adam J. Herman worked with him to make remote classes more accessible. Rice Business hired a closed captioning provider who does real-time transcriptions during Weintraub’s online courses and in breakout sessions on Zoom.
To help us maintain our inner balance, Emily Reichenbach, a senior client manager in Executive Education, volunteered to teach an all-levels yoga class every Monday morning on Zoom. Apart from being an accomplished yogi, Reichenbach is also a former Houston Rockets Power Dancer who spent six years coaching the Rice Dance Team.
Even while socially distant, members of the Rice Business community continue to find ways to make an impact in Houston and beyond. Take Coco Ma and Kathleen Harcourt, two MBA students who created the nonprofit #SnacksForMedStaff to deliver free meals to medical staff treating COVID-19 patients. The nonprofit has raised more than $14,000 already and delivered meals to Houston Methodist, Ben Taub, Memorial Hermann and other local hospitals, as well as to healthcare facilities in New York, Michigan and California.
These uncertain times may obscure the positive and inspiring actions all around us and within our community, but I've seen many of them recently.
“Speaking with dozens of newly admitted students this week assures me that our future is bright and that the ways we demonstrate our community's care, compassion and resiliency are noticed by everyone we touch. And, this unprecedented event is already producing innovations and improvements in all we do. Despite its challenges, this is also an exciting time to work in academia.”
We’re looking forward to the future and closely tracking the latest public health guidance to plan our next steps. We anticipate that students will be able to begin their fall semester studies on time and on campus as long as the city and Rice University President Leebron approve reopening. But the health and safety of our community remains paramount. We are prepared to make any necessary adjustments to minimize risk, which may include social distancing requirements and remote learning options.
“We are doing what almost every other organization is doing right now: Working to do the regular work necessary to deliver on our mission while doing the extraordinary work necessary to deliver on our mission in these extraordinary times,” says Senior Associate Dean of Degree Programs Barbara Ostdiek. “The resilience, the positive approach, and the tremendous effort of our faculty, staff and students are what make this possible.”
The restaurant business is notoriously tough. Here’s how Rice Business alumni restaurateurs are innovating — in the age of the coronavirus, and for the future.
Based on research by Wagner Kamakura and Danny P. Claro
How To Turn Top Employees Into Coaches
In retail, having a sales force that uses best practices can be the difference between survival or failure.
Researchers created a formula to assess which workers might have valuable hidden skills they can share with their coworkers.
By accounting for both known and unknowable factors, managers can identify salespeople with traits that work best in different types of sales.
When you’re a manager, decisions barrage you each day. What product works? Which store layout entices? How will you balance the budget? Many of these decisions ultimately hinge on one factor: the skills of your sales force.
Often, when managers evaluate their salespeople they contend with invisible factors that may not show up in commissions or name-tagged sales rosters — intangibles such as product placement, season or simply a store’s surrounding population. This makes it hard to fully evaluate a salesperson, or to spot which workers can teach valuable skills to their peers and improve the whole team.
But what if you could plug a few variables into a statistical model to spot your best sellers? You could then ask the star salespeople to teach coworkers some of their secrets. New research by Rice Business professor Wagner A. Kamakura and colleague Danny P. Claro of Brazil’s Insper Education and Research Institute offers a technique for doing this. Blending statistical methods that incorporate both known and unknown factors, Kamakura and Claro developed a practical tool that, for the first time, allows managers to identify staffers with key hidden skills.
To test their model, the researchers analyzed store data from 35 cosmetic and healthcare retail franchises in four South American markets. These particular stores were ideal to test the model because their salespeople were individually responsible for each transaction from the moment a customer entered a store to the time of purchase. The salespeople were also required to have detailed knowledge of products throughout each store.
Breaking down the product lines into 11 specific categories, and accounting for predictors such as commission, product display, time of year and market potential, Kamakura and Claro documented and compared each salesperson’s performance across products and over time.
They then organized members of the salesforce by strengths and weaknesses, spotlighting those workers who used best practices in a certain area and those who might benefit from that savvy. The resulting insight allowed managers to name team members as either growth advisors or learners. Thanks to the model’s detail, Kamakura and Claro note, managers can spot a salesperson who excels in one category but has room to learn, rather than seeing that worker averaged into a single, middle-of-the-pack ranking.
If a salesperson is, for example, a sales savant but lags in customer service, managers can use that insight to help the worker improve individually, while at the same time strategizing for the store’s overall success. Put into practice, the model also allows managers to identify team members who excel at selling one specific product category — and encourage them to share their secrets and methods with coworkers.
It might seem that teaching one employee to sell one more set of earbuds or one more lawn chair makes little difference. But applied consistently over time, such personalized product-specific improvement can change the face of a salesforce — and in the end, a whole business. A good manager uses all the tools available. Kamakura and Claro’s model makes it possible for every employee on a sales team to be a potential coach for the rest.
Wagner A. Kamakura was the Jesse H. Jones Professor of Marketing at Jones Graduate School of Business at Rice University.
To learn more, please see: Claro, D. P. & Kamakura, W. A. (2017). Identifying sales performance gaps with internal benchmarking. Journal of Retailing,93(4), 401-419.
Peter Rodriguez is the dean of the Jones Graduate School of Business at Rice University: “We know that some businesses really can't open at this capacity level and be profitable, so 25% isn't any better than being completely shut and it will stay that way." He says today's effort to restart our economy in southeast texas is a step forward. It's not a miracle drug.
“The big question is, in the absence of any government action, what will consumers do?” said Peter Rodriguez, an economist and dean of the Jones Graduate School of Business at Rice University. “Many are going to hold back at least a few more weeks and wait for a real sign of safety.”
The program provides students with a pathway to pursue rigorous and interdisciplinary study in the field of innovation and entrepreneurship. It enables students to understand the theory and frameworks behind different disciplinary aspects of entrepreneurship and how to apply these theories to develop and scale innovative solutions to societal problems.
The program, administered by the university’s Liu Idea Lab for Innovation and Entrepreneurship (Lilie) and jointly offered through Rice’s Jones Graduate School of Business and Brown School of Engineering, provides students with a pathway to pursue rigorous and interdisciplinary study in the field of innovation and entrepreneurship. It enables students to understand the theory and frameworks behind different disciplinary aspects of entrepreneurship and how to apply these theories to develop and scale innovative solutions to societal problems.
“Entrepreneurship and the creation of new businesses and industries are critical to Houston and Texas’ future prosperity and quality of life,” said Yael Hochberg, the Ralph S. O’Connor Professor in Entrepreneurship and Professor of Finance at Rice Business, who leads Lilie. “Rice students continuously seek to lead change and build organizations that can have real impact on our world. In today’s new and uncertain world, the skills and frameworks taught in the new minor are particularly important.”
The minor’s curriculum helps students develop professional skills that are valuable beyond the confines of entrepreneurship, administrators said, such as the ability to identify critical problems or market opportunities and to develop validated solutions to meet these needs; design solutions that are sustainable, inclusive and equitable; embrace empathy to better understand customers, users, clients and team members; and excel in interdisciplinary teams and in communicating messaging across departments, organizations and industries.
Lilie, which was founded in 2015, is a cross-disciplinary initiative to provide students with skills and knowledge to succeed in a world where entrepreneurial capabilities are increasingly critical for meaningful and influential careers. Lilie’s inception expanded the entrepreneurial offerings at Rice Business, creating opportunities for both undergraduate and non-MBA graduate students. Lilie features a coworking space, graduate and undergraduate entrepreneurship courses, and a variety of cocurricular activities and resources dedicated to supporting Rice students in entrepreneurial endeavors.
In recent years, Lilie has added a large variety of programs to the entrepreneurial ecosystem at Rice. For example, the annual H. Albert Napier Rice Launch Challenge, established in 2018, allows students to vie for over $65,000 in cash prizes through a series of workshops and three rounds of competition. In addition to the new minor, Lilie also oversees the Rice Business entrepreneurship concentration, which was founded in 1978 by the school’s nationally recognized faculty led by Al Napier and the late Edward Williams. Over the past decade, Rice alumni have created more than 535 businesses and raised more than $7.1 billion in funding, according to the school’s surveys. More than 80% of those companies are still operating.
Rice’s current offerings are universitywide and encompass renowned student- and community-facing efforts. The university is currently working with Houston’s city government and major corporations and organizations, such as the Texas Medical Center and NASA, to define and develop the future of technology and industry innovation in the city. Rice is also developing the Midtown innovation district anchored by the Ion.
For more information, contact Jeff Falk, director of national media relations at Rice, at 713-348-6775 or jfalk@rice.edu.
Follow Rice News and Media Relations via Twitter @RiceUNews.
Rice University student-founded companies took home a total of $115,000 in equity-free funding at the annual Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge last week. 2025 Rice Innovation Fellow Alexandria Carter won the top prize and $50,000 for her startup Bionostic.
Alex Cantin is graduating this May with a degree in business management, including a minor in entrepreneurship, from the Virani Undergraduate School of Business at Rice and will join McKinsey as a consultant. Cantin said he chose Rice because of the faculty-student ratio and because he would be one of the early graduates of the new Virani School.
Congratulations to Rice Business professor Yael Hochberg, who was recognized at the recent Texas Innovation Conference and Awards, held at TCU in Fort Worth, Texas.
How might oil and gas companies and workers navigate the latest crash in the industry’s constant boom and bust cycle? Hear from Bill Arnold, Professor in the Practice of Energy Management at the Jones Graduate School of Business at Rice University.
Many consumers have been anxiously awaiting a return to normalcy, according to Connie Porter, marketing professor at Rice University. Porter said many people will probably want to support their favorite businesses, but it’s unclear just how many others will remain wary of going outside of their homes. “Without foot traffic, upon which smaller businesses truly depend on…even just to pick it up, those stores are going to suffer, even if they’re open, potentially."
Research shows that when people gain power, they trust others less, and that distrust pushes them toward deterrence-style punishment.
Based on research by Marlon Mooijman (Rice Business), Wilco W. van Dijk (Leiden), Naomi Ellemers (Utrecht), and Eric van Dijk (Leiden)
Key takeaways:
Controlling critical resources gives power.
As a person’s power grows, so does their distrust of others — and their use of punishment as a deterrence tool.
The level of an individual’s power affects punishment decisions, which can then compromise managerial effectiveness.
Parents, bosses, managers: Most have done the same thing — punish someone who breaks the rules. And the person with power usually determines the proper punishment. Evidence also shows that the more powerful a leader grows (e.g., the head of a totalitarian government), the more partial they are to laws and rules.
This correlation between power and punishment led Rice Business professor Marlon Mooijman and colleagues Wilco W. van Dijk and Eric van Dijk of Leiden University and Naomi Ellemers of Utrecht University to wonder: What do leaders hope to achieve with their punishments? Specifically, the researchers wanted to know if an increase in individual power boosted the use of deterrence-style punishment. To find out, they created a model that was tested on nine types of power.
Power overall, the researchers note, is generated by control of critical resources. Usually, this control takes the form of monetary, physical or even social assets. Being in charge of these assets allows those with power (or resources) to impose punishment for infractions, anything from salary cuts to fines to prison sentences. The wielder of power may be a farmer with the right to shoot trespassers in his orchard, or a Saudi prince who can have a journalist murdered.
Like the nature of power itself, the punishments a person in power might brandish vary greatly. Even so, Mooijman and his colleagues write, a powerful person’s punishment strategy usually falls within one of two categories: deterrence or what they term “just-deserts.”
Deterrence punishments try to prevent potential rule breaking by making punishments public or mandatory. Examples include public announcement of mandatory minimum sentencing or a manager scolding an errant staffer in front of the whole office. Punishments can range from humiliation to tangible damages such as firing, community service or jail. Curiously, though, research on power and leadership shows that such common punitive steps aren’t always effective in preventing crime or transgression.
“Just-deserts” punishments take a different approach. This type of punishment simply responds to an offense once it’s committed. Just-deserts punishments don’t attempt to stop anyone else from committing the same offense; they simply castigate the offender for the broken rule. Research shows that most people prefer that offenders in their community receive this type of punishment.
To better understand the effects of the two types of punishment, Mooijman and his colleagues conducted nine experiments that drilled down on the connections between power, deterrence, punishment and distrust.
First, using a power scale from previous studies that assesses people’s feelings of power in everyday life, they surveyed participants from the U.S., the Netherlands and Western Europe to determine who felt they had more power, and who felt they had less. In the subsequent studies, these participants were exposed to various facets of power such as “a general sense of power” or structural manipulations of power. Participants then were asked to consider a range of manipulated scenarios from tax fraud to academic plagiarism to social dilemmas.
The researchers analyzed the results to correlate power and distrust, distrust and deterrence and power and deterrence. In one study where subjects considered a tax fraud scenario, for example, it was found that participants who felt a stronger sense of power were less trusting of taxpayers than were participants who felt a weaker sense of power.
By combining and analyzing the results of each study, Mooijman and his associates discovered that as an individual’s power increases, that person’s trust in other people declines. This new distrust then propels them to impose public or mandatory punishments meant as deterrents. Overall, the researchers found, there is a clear connection between holding a position of power and supporting deterrence punishments — even though such punishments have been proven to be less effective.
The findings have practical implications for managers, policymakers and other leaders. The main takeaway? Don’t let your success as a manager blind you to effectively managing your subordinates.
As Mooijman and his colleagues’ research shows, with each new step upward in personal power, the likelihood of losing effectiveness grows more acute. And the more closely personal power becomes enmeshed with harsh deterrence efforts, the more likely we are to sabotage our own goals.
So you might want to think twice before calling that low performer on the carpet at the staff meeting — or, for that matter, spanking your children at home.
If you’re satisfied with your pile of tasks, check in periodically to be sure you are continuing to achieve your ideal work life. For any new tasks that come your way, explicitly decide whether they are worth doing before accepting them. —Scott Sonenshein