By Emily Pickrell

When Ayah Bdeir, the 36-year-old founder of electronic toy company littleBits, heard about the plight of migrant children separated from their parents on the Texas border, her reaction was both as a businesswoman and as an immigrant from Lebanon. 

“We are a company built with a mission to inspire kids and make them happy. The issue of migrants hit us hard,” said Bdeir, who wrote at length about her views in a company blog post. “There is always the fear that you are tapping into a polarizing issue and not wanting to have business risks as a result. We are a small company and it matters if we lose a big customer. But I figured that we feel very strongly about the issue.” 

Speaking up on behalf of migrant children, Bdeir said, was an obvious choice, central to her company’s mission and to her and her employee’s personal experiences. LittleBits, which received the Parents’ Choice Gold Award in 2016 for its electronic toy kits, counts as many as 20 percent of its staff as foreign-born, representing 20 or so different languages and several religions. 

LittleBits is one of hundreds of brands that have created an image around children’s products. How they react to the current immigration crisis — the federal government’s decision to split children up from parents who crossed into the U.S. without pre-arranged paperwork—is a defining moment for their brands. The administration has since announced the end of this policy and has reunited about 60 of the youngest children as of mid-July, while another 2,500 remain separated from their parents. 

How and whether a child-oriented company should speak out on this issue is especially thorny, because the kids in question are most likely not direct customers.

And even for companies intent on speaking up, doing so effectively can be a challenge, said Rice Business professor Sonenshein, a specialist on organizational behavior. Businesses have started weighing in more on social issues, Sonenshein said, noting the increased participation of companies in issues such as the 2016 “bathroom bill” in North Carolina that attempted to limit options for transgender individuals. 

“The larger question with this issue is going to be, what levers do business organizations have to pull?” Sonenshein said.

For some company executives, the lack of a direct business tie negates any need to speak up. Others have focused efforts on developing public awareness, such as Goop.com, the lifestyle titan founded by actress Gwyneth Paltrow, which came out swinging.

“These kids, some of whom are babies, have been put in camps that are essentially cages in a former Walmart,” Goop’s website reads. “It is beyond inhumane — it is vile, and indecent, and anathema to what it means to be American.”

Some have taken an even more muscular approach, drawing attention to the policy they find objectionable by publicly refusing to do business as usual. United and American Airlines, for example, both declined to provide planes for the U.S. government for deportation trips that separated parents from children.

“It has been interesting to see the breadth of business voices speaking out on the issue, from tech companies to Jamie Dimon at JP Morgan, to airlines and farmers,” said Timothy Smith, director of environmental, social and governance shareholder engagement for Walden Asset Management. 

Such positions are especially risky for child-oriented companies to make. “There is very little economic incentive for these companies to get involved and very little economic power to exercise,” Sonenshein said.

But the impact can be great. Companies’ ability to speak up to a wide client base creates a bully pulpit distinct from that of other civic groups, said Danielle Silber, director of strategic partnerships development for the American Civil Liberties Union.

After Bdeir of littleBits used her business platform to detail her opposition to the Trump policy on her company blogsite, the reaction from her client base was mixed. About two-thirds of the responses to the post were negative, a level of pushback that the company had not expected. 
     
“Twenty-seven percent of respondents explicitly indicated they would be less likely to purchase littleBits products as a result of us speaking out — either because they didn’t agree with our position, they don’t want political emails, or they simply mistrust our motives,” said Allison VanNext, the head of communications for littleBits. 

“It doesn’t change my point of view,” Bdeir said. “We tend to be on the front lines a little bit. It is the luxury of being a start-up and a lone founder-based company.” 

Meanwhile, organizations dedicated to helping separated families navigate the legal system say that the act of supporting the cause, in any way, speaks volumes. 

“If companies are able to deploy resources that we in the non-profits desperately need – school supplies, toys, in-kind contributions – all of these contributions are extraordinarily important for these kids,” said Wendy Young, the president of Kids in Need of Defense, a legal aid organization.

It’s a good fit for companies like Roma Boots, which was started by Romanian-born philanthropist Samuel Bistrian, who has built his business around making large donations of rainboots to needy kids around the world. When Bistrian heard about the 2,000-plus migrant children separated from their parents at the U.S. border, he remembered his own poverty-stricken childhood in Romania in the final crumbling years of communism. 

“When I saw this thing with the children in Texas, I thought, ‘Who knows how long they are going to be there?’” Bistrian said, explaining that rainboots protect against mud and rain, as well as dust and parasites. “A lot of them are poor and not as fortunate as I was, and I would like to offer them the same support I got.”  

The question of what to do about the distressing picture of migrant kids in cages, wailing for their mothers, also troubles self-identified socially-minded investors. 

Trillium Asset Management is one of the oldest investment advisor firms that has built its brand on “sustainable and responsible investment.” This focus has meant that it looks at the environmental, social, and governance factors in its investment process, according to Jonas Kron, director of shareholder advocacy for Trillium.

And while Trillium does not make investment decisions based on immigration issues specifically, it won’t invest in companies that run immigrant detention centers, Kron said. 

“In a way, companies can’t remain neutral anymore,” Kron said. “Everything has become so politicized that by sitting it out, you are implicitly coming down on one side or the other.” 

Based on research by Vikas Mittal, Michael Walsh and Karen Winterich

• Companies that are household names create cognitive dissonance for their most committed consumers when they radically change their logos.
• Logo changes that are consistent with the core identity of customers cause less dissonance. 
• Rounded logos can reduce the backlash from redesigns.

When Apple toyed with the idea of a logo change in 2003, thousands of users signed petitions attacking the idea. The company quickly realized that change was not necessarily good – and kept the iconic apple.

For most firms, a logo redesign is a way to refresh the brand, making it more alluring to new customers. 

If a company does change its look, industry tradition advises, it should go round. Curvier lines and letters supposedly suggest a soothing, harmonious reality, while angles suggest just the opposite.

But research by Rice Business professor Vikas Mittal and colleagues Michael Walsh of West Virginia University and Karen Winterich of Pennsylvania State University shows that regardless of the angle, companies need to be careful about visual do-overs. In general, tolerance for new logos – angular or rounded – depends on the consumer profile. Diehard fans of a brand may find the break in their visual routine irritating. New customers, meanwhile, may or may not find the updated logo aesthetically pleasing.  

To test the public’s reactions to logo changes, Mittal and his team conducted three different experiments with 215 people, 62 percent of them female and 38 percent male. First, participants were shown a range of logo designs for two leading bottled waters, Dasani and Aquafina. Then they were shown logos by a professional designer who rounded out the images’ lines. 

Changing the logo design overall, the researchers found, created a sense of dissonance among the most highly committed consumers, who reacted negatively to the new visual information. 

People who viewed themselves as more independent minded were less accepting of the rounded logos. Those who thought of themselves as more interdependent in terms of their relationship to family and friends were more likely to roll with the change. 

The researchers studied their hypothesis further by recruiting 272 undergraduate students at a large university. To participants who identified as interdependent, the researchers offered the following ad copy: “Everybody’s Favorite! Give your family and friends the water that makes mouths water. Dasani. It’s been a family favorite for years.”

For participants with an independent self-identity, the researchers presented different wording. “Your Favorite!” this ad read. “Give yourself the water that makes mouths water. Dasani. It’s been a favorite for years. Today our classic water has been joined by a variety of flavored waters that are sure to please you.” 

Committed consumers in both groups didn’t care much for the new logo. But when the design was rounded, those who identified as interdependent on family, friends and community were less resistant than those who saw themselves as more independent.

The takeaway for business: If your brand is well known, change that logo at your peril. You’re likely to irk your most devoted customers. If you must change it, however, make it rounder, especially if you are a global brand. It’ll take the edge off – both for consumers and for your company.

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

To learn more, please see: Walsh, M., Winterich, K., & Mittal, V. (2011). How re-designing angular logos to be rounded shapes brand attitude: consumer brand commitment and self-construal. Journal of Consumer Marketing, 28(6), 438–447.

By Clifford Pugh

This story was reported before COVID-19 required social distancing for each other's safety. We're looking forward to a time when these insights can be safely implemented in shared public spaces.

When the Houston Rockets won the NBA championship in 1994, revelers piled into their cars and drove back and forth past the bars and nightclubs on Richmond Avenue. It was an odd choice, but back then there were few spaces where Houstonians could come together to celebrate.

The city has grown up over the past couple of decades, though. Thanks to some visionary residents and a new mindset, public spaces where citizens can gather to honor, remember, exult, and protest are proliferating. Space City may once again be worthy of its name.

The launch of the new Glassell School of Art near the corner of Montrose Boulevard and Bissonnet Street in the Museum District is a most promising sign. Like the great museum designers around the world, the Glassell team figured out that it makes good sense to become a people magnet. At a press preview, in fact, officials from the Museum of Fine Arts, Houston seemed as tickled by their new public space as they were by the new building itself.

There’s the large open courtyard, with dancing fountains that welcome children who may be a hot mess. There’s the much-talked-about “Cloud Column” sculpture by Anish Kapoor, fast becoming a destination spot for photos. There’s an outdoor amphitheater for movies and other events, and a rooftop garden with breathtaking views in all directions.

“We can’t wait to see families climbing the roof to enjoy the view,” MFAH board chairman Rich Kinder said at an opening event for the space.

Kinder and his wife, Nancy, deserve much of the credit for the city’s new wealth of public-gathering spaces, including the Glassell’s. They spearheaded Discovery Green, the wildly popular 12-acre park downtown that opened in 2008. That too offers family-friendly fountains, plus playgrounds, a bandstand, and a performance stage.

The philanthropic couple also were the driving force behind the magnificent upgrade of Buffalo Bayou Park, with its elevated skylawn and pavilion, the Water Works. And they recently donated $70 million to fast-track crowd-friendly improvements to Memorial Park.

One Houstonian, reflecting on the struggle to renovate Jones Hall downtown, joked that “maybe they should put a green space on the roof” to attract the Kinders’ attention.

Why this particular cause? “We need places where people can gather and experience the outdoors,” Kinder told Houstonia. “We chose urban green space as an area of focus because we enjoy the outdoors, but we also felt a sense of urgency to preserve and develop our green spaces and civic-gathering places. People from all over are coming to Houston for work and lifestyle and, as a city, we will only become more densely populated. ... Houston has been good to us and we want to return the favor by making Houston a better place to live.”

The array of new spaces has added a level of sophistication and a touch of loveliness to a city long derided as ugly. When bidding for the 2012 Summer Olympics, Houston was the first of the final contenders to be dropped, largely because of the perception that the city was so unattractive.

“The lack of public spaces had a lot to do with it,” said Karlston Nasser, a lecturer in real estate at Rice Business. “Houston just didn’t have the punch that the other cities had.

Such events have spurred city officials and private citizens to come up with long-term plans to upgrade parks and create new gathering spots. But even before that, a growing number of local developers were snapping to the fact that linking projects to public spaces made business sense.

“Investors develop within the first three to five years and then look to sell the asset,” Nasser said. “You can’t build it and expect they will come. That’s why certain features and amenities for a site are important.”

Case in point: The Gerald D. Hines Waterwall Park adjoining Williams Tower near the Galleria. When developing what was then called Transco Tower in the early 1980s, Hines added a private 2.77-acre park featuring a 64-foot architectural fountain that became a prime Galleria attraction. Hines later donated it to the city as a public park.

More recent examples include Midtown Park and Bagby Park, both public-private partnerships designed to serve as community spaces near the apartments and mid-rises of Midtown.

And Discovery Green, carved from a swath of paved parking lots on the then-unfashionable eastern part of downtown, has spurred tremendous development in the past decade: apartment towers and restaurants and big hotels that tout the greenspace to lure out-of-towners.

“One thing builds onto another,” said Jefferson Duarte, a professor of real estate finance at Rice Business.

Regardless of their origins, the best spaces take on their own roles in city life. Hermann Square at City Hall, dominated by a sparkling reflecting pool, is a natural gathering spot for communal celebrations—and protests. The Astros drew upward of a million people last year for a celebration that culminated there, and the Houston Women’s March and the Houston Youth Walkout peacefully assembled in the same spot to call for equitable treatment of women and changes to gun laws.

The Rothko Chapel’s mission of spiritual reflection and advancing social justice, meanwhile, makes its outdoor plaza and Barnett Newman sculpture, “Broken Obelisk,” a natural destination on World AIDS Day and Martin Luther King’s birthday.

The new Glassell School, officials say, aims to play a role similar to the one filled by Discovery Green: as an old-fashioned civic space where all generations can enjoy themselves.

“We hope Houstonians will quickly grasp that our project intends to be a new destination for the city,” MFAH director Gary Tinterow said at the opening event for the Glassell.

“We want community entities coming here and performing, doing their magic, showing everyone that we are truly a place for all people, comfortable for everyone with parking, cafes, and shade and sun and fountains to splash in.”

Kinder wholeheartedly supports this vision. “Since the beginning of this project, the most revealing thing to Nancy and me about this whole campus redevelopment is that it’s not only transformative for the museum but also a tremendous asset for the city,” he told the assembled crowd. “When our whole campus development is complete in May 2020, I am confident it will be the best thing in Houston.”

Though such spaces are familiar in the humblest villages and grandest cities around the world, crafting a beloved gathering spot has not always been a slam dunk for Houston. Despite numerous costly attempts to lure people to Jones Plaza in Houston’s Theater District, the 1.5-acre space remains largely vacant.

A $6.5 million redo of the plaza, back in 2001, unveiled a large fountain, crushed granite walkways, concrete benches, space for a restaurant, and a performing space.

But the plaza has mainly drawn attention for its green tiles, which make it look like a bus station bathroom.

Now plans are in the works for another redo, this time costing $25 million. The new plan, from the Los Angeles design firm Rios Clementi Hale Studios, calls for an open lawn and shade trees, along with a two-story indoor-outdoor dining space. It is scheduled to open in 2020. Only time will tell whether it becomes another transformative Houston public space.

This article first appeared in Houstonia as "Is Houston Finally Making A Place For Its Public?" 

By Claudia Kolker

This article first appeared in Houstonia as "A Texan Family Treks Through Scotland"

“It’s an easy walk to the village, even with rain. You’ll have the true Scottish experience,” the young woman at Highland Riding Centre said. Thousands of miles from my Houston home, I had to laugh. Something about an inconvenient local climate and the locals’ pragmatism about it felt very familiar.

My two preteen daughters and I had just arrived by train, traveling about 150 miles north from Edinburgh to the Central Highlands of Scotland, where we made the town of Inverness our home base as we explored the region. This part of the world had called all of us for separate reasons. The younger girl hankered to see kilts and Loch Ness, while the older one longed for wild, empty spaces. As for me, after covering Houston immigrant communities for years, I’d grown fascinated by the way Scottish culture, in particular, had left its stamp on Texas.

Once we’d swathed ourselves in shawls and zipped jackets, we found the young woman directing us to the village was right. Yes, it was drizzling. But striding the road past hazy hills and hollyhocked gardens, I started to feel robust and self-sufficient. By the time we got to tiny Drumnadrochit, a town of about 1,000 people on the western edge of Loch Ness, ducking into the warmth of Annie’s Apple tearoom seemed like a delicious reward.

As did all the homemade cakes, glowing in their glass domes. With a new enthusiasm gleaned from watching The Great British Bake Off, we chose the lemon drizzle cake, gathered our pots of Earl Grey, and settled at a rustic table with a deluxe Scrabble board. It started raining in earnest. A man blustered in with a gentle, damp Labrador. The cake was beautifully compact and fragrant, less sweet and less puffy than its U.S. counterpart.

“Would you like some help?” the gray-haired shop owner, Annie, asked politely. She didn’t mean more tea. It turned out that she was an internationally competitive Scrabble player, and within moments was helping the girls plop down words I’d never heard of: the same kind of sociability, I recognized, that had made me fall in love with Texas when I moved there 25 years ago.

Three hours later the rain was gone, and the girls and I set out again for the stables. We were intent on seeing Loch Ness 19th-century style: on horseback. Composed of 23 square miles of icy black water, the lake, which is more than 700 feet deep in some places, snakes through a crevice encased in black peat, which is what makes it famously murky. The girls looked at home on the calm horses.

Staring at the bright, obsidian waters, I thought of the story a man from Inverness had told us. Growing up, he and his friends automatically got beatings for the slightest infraction at school. One day, a boy who took a rowboat down the loch to school showed up late, pale as a sheet, with no apology. He’d seen something in the water, he said. “Describe it,” the teacher demanded. The boy gave a detailed account—the smell, the shape of the head, the neck, the way the water churned near his boat until he rowed to shore and ran the rest of the way to school. The teacher sent him to his seat. “You saw it,” he said. “I’ve seen it too.”

Our horses loved to visit the loch there, our young woman guide told us, and sure enough, without bidding they crossed the road, ambled through a forest, and dashed us over a meadow to the edge of the water. Its dark surface glittered. All three of us leaned closer, peering down to try to discern what might be lurking below.
 
The next morning we took a four-hour bus ride from Inverness to the town of John O’Groats, where our first order of business was finding something woolly. The ferry to Orkney, an archipelago of 70 small islands on Scotland’s northernmost tip, was leaving in 30 minutes. We needed more layers.

People have lived on the wind-whipped Orkney islands, 20 of which are currently inhabited, for at least 8,500 years. It lies so close to Norway that many of the islanders identify less with fellow Scots than with the Vikings who sailed here, built settlements and burial mounds, and hoisted longboats on their backs to portage between waterways. The prospect of touching down at this strange, ancient crossroads was irresistible.

Docking at Mainland, the largest island, we hopped onto another bus, emerging at Skara Brae, the remains of a 5,000-year-old village of eight houses tucked into the side of a cliff and surrounded by barking seagulls and booming waves.

The place was inhabited from about 3180 BC to about 2500 BC, when it was abandoned for reasons that remain unclear today, then hidden for centuries. In 1850 it was rediscovered after a giant storm tore the sand cover from the ancient dwellings, revealing the most complete Neolithic village found in Europe.

Today you can stop at a restored underground warren, built before the pyramids at Giza. Here Skara Brae’s people cooked in underground common kitchens, stocked earthen water tanks with live fish, and slept in snug, grass-filled hutches built into the walls. “I’d like a bed like that,” my older girl said.

Peering into the stark earthen apartments, I thought of the parched-mud pioneer huts near Texas’s Big Bend. Extreme as both environments are, I could see a common appeal. There will always be temperaments, I thought, willing to sacrifice nearly everything—comfort, ease, even safety—for the chance to build a snug place somewhere wild, with no one nearby to boss them.

Immigrant populations from Scotland have been coming to the United States since the 17th century, with many eventually opting to settle here in the Lone Star State. In fact, it can seem as if almost everyone who formed Texas, from Sam Houston to Cherokee leader Chief Bowles, had Scottish or Scots Irish blood in them.

Today the state is home to one of the greatest concentrations of Scottish and Scots Irish stock in the country. Immigrants from the Scots Irish borderlands, in particular, brought cultural traditions that shape Texas to this day, said Rice history professor John Boles, author of Jefferson: Architect of American Liberty. Cautioning against generalizing – the Scots Irish who came to America were diverse both ethnically and economically -- Boles said, “I do think there is a personalism and loyalty in politics that is influenced by Scots Irish tradition. White Southerners will often vote for a person, a persona, rather than a policy per se. There is also a value on kinship, property and religious identity that reflects Scots Irish influence. "My half-Scottish friend Helen Mann, who lives in Houston, says she sees the links between the two cultures clearly. “Long historical memory,” she declared in an email. “Loyalty. Resistance to automatic authority. And individuality and self-sufficiency: ‘I am as good as you are.’” 

As a devoted Texan transplant, I thought she got it just right.
 
With just one day left in Scotland, we headed west, to the Isle of Skye. The largest of the Inner Hebrides islands, Skye embodies romantic Scotland for Americans—and Scots. “It’s my favorite place,” a young man told me, “because of the quality of the air.”

The island is a popular road-trip destination, thanks to a long bridge linking it to the mainland. At dawn we’d lined up outside of our Inverness hotel, where Raymond, a sturdy, bald-headed man in a kilt, ushered us onto a van and set off. Little by little, the lanes and shops of the town fell away. The air misted. Pearls of water beaded the windows. And suddenly there it was: a vista of green crags rising over the hills like crashing waves.

It was easy to see why Skye has served as the setting for so many novels and TV shows, including cult favorite Outlander. There’s something dreamy about these expanses, almost like gigantic stage sets. Yet the emptiness that makes the Highlands so ravishing is largely a relic of tragedy.

Three hundred years ago, these moors were strewn with farms whose tenants answered to clan chieftains, Raymond told us as we rolled past the dark green hills. Many Highlanders earned rights to their land as warriors, answering the chieftain’s command to fight other clans or British soldiers.

But after a brutal defeat at the Battle of Culloden in 1746, during which the British slaughtered more than 1,500 Highland soldiers in less than an hour, Highlands culture began to die, too. The clan armies were outlawed. Kilts, weapons, and bagpipes—classified as weapons of war—were forbidden on pain of execution, and some chieftains betrayed their own people, forcing them from the land to make space for sheep.

An entire culture was homeless. Many dispersed, ending up in Texas and elsewhere. “We have to move on from the past,” Raymond said as he led us down a path to the moor. “But we can’t forget it.”

The air exploded with fragrance: heather, its rough stalks and pink petals covering the ground for miles. Underneath our feet, the ground bounced. This was peat, Raymond explained, as the girls ran ahead toward a narrow trail on a crag.

While the sogginess kept the land green, he said, it made growing crops difficult. He pointed at a brown rectangle a few miles away, where locals were reviving the custom of peat-digging as a cheap source of fuel.

My urban Houston girls had now raced too far ahead for me to catch them. I could see them talking animatedly as they scrambled along the bluff, a stream and velvety hills below them. “Living on the edge!” one of them cackled. I held my breath and let them run.

Claudia Kolker is the associate director of intellectual capital at Rice Business and author of “The Immigrant Advantage: What We Can Learn From Newcomers To America About Health, Happiness, and Hope."

John B. Boles is the William P. Hobby Professor of the History department at Rice University. 

Based on research by Yuhang Xing, Jennifer Conrad and Nishad Kapadia

Key findings:

• Some firms with a high chance of defaulting also have a higher probability of big “jackpot” payoffs.
• But most stocks with a high chance of jackpot payoffs earn abnormally low returns.
• Retail investors often hold these risky, overpriced stocks because they misunderstand pricing charts. 

Talk show hosts love to waylay unsuspecting civilians with questions in the streets outside their studios. Think Jimmy Kimmel, Ellen DeGeneres, James Corden. Now imagine one of them donning an umbrella hat on a hot day to ask, “What’s the best way to cool off?”

“Eat ice cream!” the average civilian might answer. “Head to Alaska!” “Cannonball into my neighbor’s pool!”

The answers vary, of course, according to temperament. So, too, do different investors’ choices of stocks to buy. According to research by Rice Business professor Yuhang Xing, individual retail investors are leap-in-the-pool types. They’re drawn to positively skewed stocks with a high probability for splashy returns.  

What is a positive skewing, exactly? The term refers to an investing chart that plots stock prices on a bell curve to determine where future prices might fall. When the average price is to the right of normal distribution, the stock skews positive. Often, that’s a good thing, luring investors in droves and driving up prices. But Xing and colleagues Jennifer Conrad of the University of North Carolina-Chapel Hill and Nishad Kapadia of Tulane University found positive skewing alone does not tell the whole story.  

While investors might hit the jackpot if the bet goes right, they face abnormally low returns if it doesn’t. This actually happens a lot.

By building a mathematical model with historical stock price data from the 1950s onward, Xing and her associates studied why investors hang onto these risky, overpriced stocks. To do this, the researchers translated significant characteristics about stock price data into mathematical formulas. 

Trying to disentangle the links among the stock characteristics, Xing and her colleagues came away with several observations, among them that the correlation between extreme outcomes was a better predictor of jackpot returns than volatility alone. They also found that stocks with a high chance of becoming jackpot investments tended to have four notable characteristics: 1) higher skewedness in the past; 2) higher returns over the past year; 3) a higher sales growth rate; and 4) higher volatility. Another discovery was that among stocks with a high probability of default, low returns are only present in the top 30 percent of skewness in the past three months.

These observations, gleaned from the researchers’ mathematical model, help pinpoint which positively skewed stocks will indeed perform. Taken together, they shed light on why an individual investor would hold overpriced stocks. The odds for jackpot returns are irresistible to many investors, which drives up the stocks’ price. The result: A lucky few investors will walk away refreshed, energized and happy after that impulsive cannonball into the pool. Most others will walk away a bit embarrassed, with the distinct sense they just got soaked.

Conrad, J., Kapadia, N., & Xing, Y. (2014). Death and jackpot: Why do individual investors hold overpriced stocks? Journal of Financial Economics, 113.3: 455-475.

By Claudia Feldman

Constance Adams sounded like her old self — a powerhouse who drove a muscle car, loved punk rock and devoted the bulk of her remarkable career to designing spaceship interiors for solar system travelers. 

Adams, 53, looked sharp, too. Her hair was freshly cut and styled, her nails polished cherry red.

“I’m going out with fabulous nails,” she told a friend.

That’s when the medical supplies in Adams’ living room in inner city Houston came into sharper focus — the hospital bed, the wheelchair, the breathing aids.

Adams had terminal colorectal cancer. She’d already left reams of notes for friends, family, and most importantly her daughters 16 and 9. She’d planned her funeral and her memorial service. For Adams, however, there was no resting yet. Instead, with her last labored breaths, she sounded the alarm on climate change, what she saw as the most pressing issue of her lifetime. 

She shifted her formidable focus from outer space to her own planet last summer, shortly after receiving her cancer diagnosis. “I was on my porch drinking coffee, and I realized, it’s not if but when. Even if we put the brakes on the level of destruction that we have perpetrated so far, we’re going to have significant climate collapse by 2050.”

Adams started writing and didn’t stop until she produced what she called a blueprint for survival. From her hospital bed in mid-June, she clutched the 17-page document. “There’s lots of bad news in here but I also explain what I think we can do,” she said. She died a week later, June 25.

 ****

Constance Marguerite Adams was born in Boston July 16, 1964. But she traveled so often to Europe with her parents, and later, her father and stepmother, that she knew more about world history, art history and philosophy than most adults. When she entered Harvard University in the fall of 1982, other students struggled to keep up with her.

“All my classmates were brilliant, but Constance was intellectually a giant,” said old friend Franny Eanet, now a research coordinator at the University of Massachusetts Medical School. “Sometimes she would be drawing parallels between historical events, and since I didn’t want to reveal my ignorance, I would just say, ‘Um, sure.’”

“She was probably the wildest character in our grade,” said Michael Hirschhorn, another Harvard grad who went on to found Ish Entertainment, “She had this really outrageous, I-don’t-give-a-crap-about-anything attitude. I liked that she was a free thinker and an outsider — someone not so desperate to impress everybody else at Harvard.”

The very fact that Adams was an outsider likely fuelled her stellar trajectory, said Scott Sonenshein, a management professor at Rice Business. Sonenshein, who has written a book called Stretch, described Adams as the “quintessential stretcher.”

She came from a social science, not technical background. She was often the lone women among dozens of men at work. Because she thought and reacted differently than they did, Sonenshein said, she was often the better and more creative problem solver. Sonenshein pointed to research that shows women are 20 percent more successful than men at solving society’s greatest problems, precisely because they are treated as outsiders.

If Adams led her college pack in pondering life’s big questions, she loved life’s little questions, too. 

Who made the best coffee? (She did.) Who knew the most about punk rock? (Eanet did.) What to do with her wild mop of curls? Adams frequently cut and dyed her own hair. After she produced her usually outrageous ’dos, sometimes embellished with colored phone cords, she’d turn to Eanet and do her hair, too.

Adams graduated from Harvard in 1987, after taking a year off to focus on social justice issues in New York. Her next stop was an advanced degree in architecture from Yale, where she was infamous for occasionally attending class in a red tutu, black fishnet stockings and combat boots. As she hopscotched from prestigious jobs in Japan and Germany (she mastered Japanese and German, in addition to French and Spanish), she remained true to her nickname, Constantly Constance. That meant, in addition to lots of talking and attention-grabbing clothes, the occasional interpersonal skirmish.

Hirschorn, who is producing a documentary about Adams, said she didn’t have much of a filter or interest in social niceties. “It was hard to get her to take it down a little so we could have a calmer conversation. Her mind moved so kinetically that she couldn’t slow down in her own head to explain what she was thinking.”

Adams was job-hunting in Houston in 1995 when she took an afternoon off to tour NASA’s Johnson Space Center. She was so inspired by the challenge of exploring space, Mars in particular, that she sent in her resume. That decision was life-changing. As a NASA contractor, she helped pioneer the field of space architecture. She helped design the interior of the International Space Station. Another beloved project was TransHab or Transit Habitat, an inflatable module that was designed to expand and improve ISS living and working spaces, although it never reached fruition due to lack of government funding.

During a much-publicized talk years later, Adams decried the on-going budget cuts to the space program. “We’ll never get to Mars like this,” she said.

While working in Europe, Adams was used to being the only female architect in the room. At NASA, the field of space architecture was dominated by men as well, but the stakes were higher. 

She told Lance Hosey and Kira Gould for their book, Women in Green: Voices of Sustainable Design, “It’s not about being pretty — it’s about solving a problem. If you don’t, people will die. So, I have very stringent standards. I’m pretty sure that if I were male, I’d get a lot of respect for that. Instead, I’m seen as too tough.” 

During Adams’ earliest days at NASA, she worked on Bio-Plex, a prototype of a surface habitat designed for Mars. She also helped design the X-38 crew return vehicle and its orbital space plane. She and other space architects famously tried to give astronauts a sense of what was up and what was down in a gravity-free environment. 

She told National Geographic, “You take gravity out of the equation, and everything goes kablooey.”

By 2005 Adams was widely recognized for her work and was named an Emerging Explorer by the National Geographic Society. 

The NGS staff announced in an email, “These are individuals who embody a spirit of exploration — seeking out truth and knowledge and then passionately sharing it with others. Constance personified these traits.”

****

When Adams’ marriage ended in divorce, she threw herself into parenting. To daughters Valerie Wehring and Mathilde Adams, she was the cool mom who drove a Dodge Challenger, instantly approved hairdo experiments and whipped up fantastical birthday cakes. One was in the shape of an oyster and topped with her highly acclaimed buttercream frosting. 

“She was in a constant quest to improve every situation,” said MaryScott Hagle, a nonprofit administrator who bonded with Adams as they waited for their daughters in art and dance classes. (Today, Hagle and her husband, Daniel Kornberg, are the legal guardians of Valerie and Mathilde.) 

“Constance used to buy tank tops for the girls, then hand-knit skirt and sleeve attachments,” Hagle said. “They were engineering experiments.” Hagle became an even closer friend after Adams had her first colonoscopy at age 52 and learned she had stage 4 cancer. It already had metastasized to her lungs and liver.

From then on Hagle went with Adams to most of her doctor appointments.

“I imagine Constance’s file (at MD Anderson Cancer Center) was pretty colorful,” Hagle said. “She was not above busting out the curse words when necessary.”

Until she realized the fight was over, and she had only limited time to share what she knew. 

Adams did her best. She pointed to some climate change models that predict as many as 5 billion people will lose their homes in the next 100 years due to flooding or drought. Already, she said, global temperatures are rising, polar caps are melting and the fish in our oceans are disappearing.

Already, she added, the world’s infrastructure is at risk. Just one example: Right now 80 percent of the rail lines in the world are situated in locations that are destined to flood in the future.

Perhaps most urgent to Adams was the likelihood that we will lose 80 percent of the world’s biodiversity by the end of the century.

"Which 20 percent do we need?” Adams asked days before she died. “Do we build an ark?”

There was much more to say, but she was exhausted. “Talk to Francois,” she said.

***

Adams and Francois Levy were design partners in the company she formed in the ‘90s, Synthesis International. 

“Constance had a tremendous amount of innate design sense; I don’t want to downplay that,” Levy said. “But she was really a scientist. She would go where evidence and facts as she understood them would take her.”

That’s how she formed her opinions on climate change, Levy said, “and she was obviously not alone. She believed that there are a lot of necessary steps we have to take (to save ourselves), and somehow we’re not taking them fast enough or broadly enough because many of us have shorter-range interests at stake.”

As Adams concluded one of her final interviews on climate change, she said she didn’t want to linger in the condition she was in.

“I’ve had a fabulous life, but let’s just wind it down. It’s kind of amazing to see spry 70-year-olds running around, but you know, fairness is not something the universe focuses on. Balance, yes, fairness, no. It’s kind of like me saying when, not if."

Claudia Feldman is a freelance writer living in Houston and editor of the Last Word, a service that helps people tell their own stories.

Based on research by Robert E. Hoskisson (George R. Brown Emeritus Professor of Management), Shih-chi Chiu, Richard A. Johnson and Seemantini Pathak

• When companies plan to restructure, it makes a difference if the new CEO is hired from inside or outside.  
• Companies that value sheer volume of asset divestures may want a leader from inside the firm.
• ​Companies seeking a slimmer, more focused, less diversified operation may want a CEO from outside.

Star Co. is a hot mess. The business is bloated and sprawling. Its stock is tanking. Profits are down. It’s clearly time for a new CEO.

But where to look — inside the company or outside? It’s a decision every restructuring company faces.

Cenovus Energy tapped an outsider in 2017. General Electric, the same year, went with a longtime insider. Though it’s too soon to know yet for sure, which one likely made the right choice?

Rice Business emeritus professor Robert E. Hoskisson, with coauthors Shih-chi Chiu, then at Nanyang Technological University (now at the University of Houston), Richard A. Johnson of University of Missouri, Columbia and Seemantini Pathak of University of Missouri-St. Louis, set out for an answer: Where is the best place for a restructuring company to get its next CEO?

According to conventional wisdom and some past research, change is more likely under an outside CEO. He or she can start fresh, armed with a greater mandate to shake things up.

Recent evidence, though, suggests that outsiders may actually have more trouble succeeding. That’s because they lack the institutional knowledge to make the most informed choices, and the existing relationships needed to ease change with minimal pain. Insiders, this research shows, have the advantage of key “firm-specific” knowledge on everything from customers to suppliers to workforce composition.

To pin down an answer on whether it’s better to stay inside or go outside, Hoskisson’s team decided to look at corporate divestiture — asset sales, spinoffs, equity carve-outs — as a proxy for overall strategic change. (It’s already well documented that a new CEO makes organizational changes such as personnel changes and culture shifts.)

Next, they distinguished between scale and scope. The scale of a divestiture reflects magnitude: How many units were sold? The scope reflects diversification portfolio adjustment: Does the company have fewer business lines?

Focusing on 234 divestitures at U.S. firms that voluntarily restructured between 1986 and 2009, the authors defined a new inside CEO as having been in that role two or fewer years, and with the company previously for more than two years. They defined a new outside CEO as someone who had been at the company for a maximum of two years in any role.

Heading into the analysis, the researchers expected they would reach different conclusions for scale vs. scope. And the results were just that.

New inside CEOs, they found, did carry out more divesture activities than new outside CEOs. Not having as much inside knowledge, the outside CEO was more likely to prefer a simpler divesture plan, one that didn’t require evaluating each unit or asset. Instead, the professors hypothesized, an outsider was more likely to follow investors’ general preferences about firm strategy.

“When a higher magnitude of corporate divestures is required, internal successors are more astute than external successors in accomplishing this objective,” the researchers write. On the other hand, when a company wants to shrink the diversified scope of a business portfolio, “external successors are more likely to bring their firms to a more focused position.”

The researchers also suggested future lines of study about new CEOs and strategic change. What happens when firms want to buy and sell at the same time? Does the CEO selection process itself affect restructuring scale and scope? And does an inside chief executive who won a power struggle against a predecessor perform differently than an inside CEO named in orderly succession planning?

In the meantime, the findings are clear. If your corporate board is hunting for a new CEO, it may pay to go for the fresh face. But depending on your goals, your best option may also be a top executive sitting at a desk a few steps away.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

To learn more, please see: Chu, S., Johnson, R., Hoskisson, R., & Pathak, S. (2016). The impact of CEO successor origin on corporate divestiture scale and scope. The Leadership Quarterly, 27, 617-633.

Based on research by Alan Crane and Andrew Koch.

• In 1999, the Ninth Circuit Court of Appeals cut back shareholders’ ability to file class action lawsuits.
• Small shareholders lost a key tool to monitor and control firm management.
• As a result, the ownership structure of firms across the West Coast changed dramatically – with institutional investors taking on an outsized ownership role.

Accounting misstatements, insider trading, withholding of material information about firm operations — all are good reasons for a class action suit. Suing as a class lets small shareholders aggregate their individual strengths. 

So what happens when these suits get harder to file? From the shareholders’ perspective, it means less ability to join forces. But how does decreased ability to file class action suits affect how firms do business?

Rice Business professor Alan Crane spent years studying how the ability to litigate affects firm ownership. In a recent paper he coauthored, he analyzed firm ownership structures after a 1999 Ninth Circuit Court of Appeals ruling reduced small shareholders’ power to file class action suits.

The Ninth Circuit covers the West Coast, Alaska and Hawaii. This means that the court’s decision altered the path of the thousands of firms throughout the region that argued that small shareholders were abusing the class action mechanism with frivolous lawsuits.

Naturally, the decision meant a decline in class action litigation: a 43 percent drop over the following year. Crane, however, was less interested in caseloads than in the firms’ ensuing ownership structures. To understand the outcomes of the ruling, he and his coauthor looked at a large sample of firms over several years before and after the 1999 ruling. 

The average cost of a successfully settled class-action lawsuit, the authors knew, is roughly $13 million. Given the average damages and settlements size, a single individual would need to own approximately 10.4 percent of the average firm to find an individual suit worth filing.

So what happened next? Firms that once had significant numbers of small shareholders, the authors found, suddenly were taken over by institutional investors. In 1995, institutional ownership in the 9th Circuit versus other parts of the U.S. was roughly equal. But by 2010, some 11 years after the Ninth Circuit decision, the level of institutional ownership in Ninth Circuit firms increased to roughly 70 percent. Compare this with the 50 percent institutional ownership for comparable firms outside of the court’s jurisdiction. 

Ownership concentration and the number of large owners per firm also increased, by 15% and 14% respectively, relative to their 1998 averages.

Not all firms became dominated by institutions in equal measure. Large institutions were lured by firms likely to pay out significant dividends. Hence, firms that didn’t offer the potential for such payouts failed to attract the same level of institutional interest. 

Whether institutional ownership is good or bad for a company is a separate issue, the authors noted. Institutions, after all, have a great deal of bargaining power, allowing them to force management into efficiencies it may not otherwise want. 

But one outcome was clear. Owners’ ability to keep management in line with threats of class action drastically diminished. The Ninth Circuit’s stated rationale for its decision was limiting the impact of frivolous class action suits. But its effect, Crane found, was widespread change in ownership structure — even in companies uninvolved in litigation. 

The implications were subtle but important. Contrary to the court’s argument, the lawsuits the professors studied did *not* appear overall to be frivolous. Yet the Ninth Circuit’s ruling led to profound changes in ownership structures. The takeaway: Class action suits, contrary to many previous findings, are in fact a governance tool.  

One court decision, in other words, was enough to transform firm ownership up and down the West Coast. As a result, the power of the class action lawsuit — one of the most effective checks on corporate management of businesses — was slashed. The court’s decision may have saved time and money lost to isolated, frivolous lawsuits. But for countless shareholders and consumers, it was an unintended gamechanger. 

Alan Crane is an associate professor of finance at the Jones Graduate School of Business at Rice University.

For further information please see: Crane, A. & Koch, A. (2018). Shareholder Litigation and Ownership Structure: Evidence from a Natural Experiment. Management Science, 64(1), 5-23.  

Illustrated by Nick Anderson. Based on research by Vikas Mittal, Andrea Morales and Karen Page Winterich. 

Want to learn more about how disgust prompts bad behavior? Read our article Clean Living. 

Pulitzer Prize-winning editorial cartoonist Nick Anderson depicts research by Rice Business professor Vikas Mittal.

Mittal, V., Morales, A. & Winterich, K. P. (2014). Protect thyself: how affective self-protection increases self-interested behavior. Organizational Behavior and Human Decision Processes, 125(2), 151-161.

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

Nick Anderson is a Pultizer Prize-winning editorial cartoonist.

By Jennifer Latson

Some brands feel like old friends. Take Newman’s Own, which donates its profits to charity, or Patagonia, whose environmental activism has won the admiration, and the patronage, of many Americans — even if we find their parkas pricey.   

Brands like these earn our loyalty by appealing to our better natures. They make us feel good about ourselves when we support them. For some of us, buying a Newman’s Own product is the emotional equivalent of helping out our beloved, stunningly blue-eyed, uncle. 

But when beloved brands do wrong, it can be as devastating as being betrayed by Uncle Paul. And some of America’s best-loved companies and public figures have done a lot of wrong lately.

Many of us were shocked when Volkswagen’s “clean diesel” technology turned out to be mere smoke and mirrors — and when the CEO of Audi, Volkswagen’s parent company, was arrested in 2015, it drove home the disconnect between the brand’s reputation and reality.

Nike, meanwhile, earned our affection with ads empowering female athletes — such as the 2007 billboard featuring Serena Williams, tennis racket in hand, asking, “Are you looking at my titles?” Those of us who bought into their brand messaging were dismayed to hear that Nike’s female employees faced some of their toughest challenges at work, where, as the New York Times reported in April of 2018, women who reported being harassed and routinely marginalized were largely ignored.

And then there are the famous figures whose actions belie their wholesome public persona. When Bill Cosby was convicted in April of 2018 of drugging and sexually assaulting a woman — one of more than 50 who’ve accused him of similar crimes — it marked the final stage of his transformation, in the public’s eye, from father figure to predator. For those of us who grew up watching “The Cosby Show,” reconciling the Cosby brand with his true identity has been a heartbreaking struggle.

Why should we take it so personally when companies or celebrities fail to live up to their own branding?

“One of the reasons brands are so powerful is that their connections strengthen over time, becoming deeply embedded in our minds,” writes Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management. “In many cases, our belief in a brand can supersede reality. We are quick to forgive brands we trust.”

Our unwillingness to question brands we’ve come to admire is dangerous, Calkins argues: It’s the reason Cosby escaped justice for so long, despite the mounting evidence of his misdeeds. Few of us could believe that “America’s Dad” would behave so despicably — so we didn’t. At least, not until the evidence became impossible to ignore, well beyond the point where we would have believed similar allegations against a lesser-known figure.

“The reason Cosby’s conviction is so notable is that it highlights the disconnect between his brand image and reality. The funny, casual Cosby isn’t real. It is an image that he created,” Calkins writes.

But the image that good branding creates becomes so firmly embedded in people’s minds that it’s virtually impossible to shake, says Utpal Dholakia, a marketing professor at Rice University’s Jones Graduate School of Business. Even revelations of hypocrisy by a brand behemoth like Nike — in the form of marginalizing female employees while pouring millions into messaging that empowers female athletes — aren’t enough to knock it off its pedestal.

“That’s why the branding is so important. The consumer’s connection is with the brand, and not the people behind the brand,” Dholakia explains. “I’m not saying it’s good or bad, but that’s the effect it has. That’s why we spend so much money on advertising and establishing brand messaging.”

The ability of good branding to overcome bad publicity was perhaps most apparent when beloved Texas brand Blue Bell issued a series of ice cream recalls in 2015 after listeria outbreaks killed three people and sickened others.

“Each time, they would take their products off the shelves and then relaunch them,” Dholakia says. “And people were thrilled to go out and buy those products again. Every time.”

Blue Bell’s brand appeal, built on a marketing campaign that emphasized its small-town roots, was enough to keep its customers loyal despite the threat of illness. For many consumers, supporting the brand was a way to identify as a true Texan. Blue Bell, they felt, was in their blood.

Successful brands really do become part of our sense of self, writes Hilary Jerome Scarsella, who is completing a PhD in theological studies at Vanderbilt University. Scarsella ascribes to psychoanalyst Heinz Kohut’s theory that selfhood develops in response to other people and things, using the term “cultural selfobjects” to describe those that form a vital part of selfhood for an entire group of people — as Cosby did in American culture.

“Bill Cosby long represented an image of fatherhood, family and upper middle-class life that both reflected and shaped what Americans valued, understood themselves to be, and saw as possible for their lives. In this way, he became part of the American self,” Scarsella wrote in a recent essay.

“As a cultural selfobject, Cosby’s acts of violence against individual women were also a betrayal for all those who built a part of themselves in response to the values he mirrored back to them,” Scarsella explains. “Because cultural selfobjects shape who we are, this betrayal and loss is profound. It results in a loss of a part of our own selves.”

The revelations that Nike executives mistreated female employees, however, don’t seem to have evoked a similarly profound sense of loss. In fact, according to YouGov BrandIndex, a service that tracks the public’s perception of brands, Nike experienced a sharp but short-lived drop in consumer perception just after stories emerged about its toxic workplace — and has since rebounded to its previous levels.

While it seems like taking the moral high ground would give brands farther to fall when they do wrong, the opposite is actually true, says Dholakia. That’s because the more powerful and persuasive your branding is, the better insulated you are from bad publicity.

“In marketing, we call it the brand insulation effect: The stronger the brand, the more impervious it is to these occurrences,” Dholakia says.

But good branding has its limits, as Cosby’s fall from grace reveals. Individual reputations are easier to tarnish than the multifaceted brand identities. Nike’s reputation doesn’t hinge entirely on empowering women, after all. But when your brand rests exclusively on being America’s Dad, it’s impossible to recover from the damage of doing something egregiously un-dad-like, Dholakia says.

“Once your reputation gets hurt, it’s hurt. That’s all Cosby has: his reputation,” he says. “It’s not a brand that has many offshoots.”

Even for large brands, however, it can be hard to bounce back from a scandal that compromises your core identity. That’s where good damage control comes in — and the best takes the form of honesty, transparency, and sincere contrition, explains Scott Davis, chief growth officer at Prophet, a brand and marketing consultancy.

Starbucks offers another example. In April of 2018, two black men were arrested at a Philadelphia Starbucks store after an employee called the police because they used the bathroom without buying anything. For a company that has worked for years to build a reputation as “an inclusive, progressive, forward-thinking beacon of a brand,” the incident could have dealt a devastating blow, Davis wrote in an essay for Forbes.

But Starbucks CEO Kevin Johnson handled it the way you’d expect a good leader — or a good friend — to do when they’ve let you down.

“He accepted accountability for the incident, acknowledged that Starbucks must do better and apologized to all that were impacted by this incident but, in particular, to the two men who suffered this incredible indignity,” Davis writes. “He promised change and did not kick the can down the road.”

Researchers have found that, paradoxically, doing wrong and then making it right can actually strengthen the relationship between a company and its customers — just as it can between friends. These are defining moments in any relationship, and just as a betrayal by a close friend can end the friendship, it can also be an opportunity for growth and reconciliation.

In fact, Dholakia argues, we tend to be quicker to forgive a brand that lets us down than, say, an uncle.

“People are not all that forgiving of individuals,” he says. “But brands are powerful. People are extremely loyal to brands.”

Jennifer Latson is a writer and editor at Rice University’s Jones Graduate School of Business and the author of The Boy Who Loved Too Much, a nonfiction book about a rare disorder called Williams syndrome.