Based on research by Arnaud Chevallier (former professor at Rice University)

• When a company’s problem is complex or potentially costly, mapping it out is critical.
• “Idea mapping” is a method of organizing the answers to a key question in a mutually exclusive, collectively exhaustive and insightful way.
• Mapping makes space for innovative analysis.

Let’s say you’re in Houston, but you have a meeting in Paris. You could go by air — maybe first class, maybe business. Perhaps it’s smarter to take an ocean liner and then a little boat up the Seine. Should you build a rocket or walk? Maybe Paris should simply remove itself from France and appear on your doorstep.

This exercise is plainly absurd. Yet there’s good reason to dig for all possibilities when solving a problem, argues Arnaud Chevallier, a former Rice University engineering professor, in his book Strategic Thinking in Complex Problem Solving. Analyzing extensive research on idea creation and decision trees, Chevallier argues that a technique called “mapping” forces decision makers to think differently and push the horizon of all that could be possible.

Mapping is worthwhile, Chevallier says, because the obvious solution isn’t always the best one. For a hotel manager fielding constant complaints about a slow elevator, replacing it with a faster one would certainly fix things. But as a solution, it’s expensive. The second most obvious plan, redoing the electronic dispatch algorithm, may be too costly as well. Casting the net wider for ideas can yield something altogether different: in this case, giving hotel guests something to do while they wait by installing TVs and mirrors inside the elevator and outside its doors.

For complex problems, or problems where making the wrong choice can be costly, mapping helps free decision makers from the obvious and allows them to find solutions with added value.

The first rule of mapping, therefore, is to include the obvious. Next, go beyond it. This creates space for innovation, forcing the thinker first to identify divergent explanations, and only then evaluate whether they are worthy alternatives. Cultivating this analytical style, Chevallier writes, can be a powerful tool for finding innovative solutions to key performance issues.

This is because problems have a structure. And while there are any number of mechanisms one can use to map an issue and represent it visually, what’s important is that the representation exposes the problem’s underlying structure. In other words, an image makes clear a problem’s various dimensions, which allows decision makers to better understand it.

To start an issue-mapping journey, decision makers need to consistently ask and answer one of two types of questions: diagnostic (“why?”) or solution-based (“how?”). If the question is diagnostic, the map will only show possible causes. If the question is solution-based, the map’s branches and byways will depict options for “how.”

A map should place these answers in mutually exclusive branches. Two events are mutually exclusive when the occurrence of one precludes the occurrence of another. Using mutually exclusive branches ensures that each solution gets considered just once — there are no overlaps. At the same time, maps should be collectively exhaustive. That is, to the extent possible they should include all outcomes. This forces decision makers to ask, “What other possible reasons could there be for the problem at hand?” That way, each map considers all possible answers exactly once.

Using these two methods forces decision makers to travel beyond cliché and conventional wisdom. But the only way to reach this point, Chevallier says, is to acknowledge each idea in its entirety — yes, even those that prompt laughter. Uncomfortable as it may be to draw, a complete map includes apparently dumb ideas.

By focusing on both mutual exclusivity and collective exhaustion, decision makers can avoid a few notorious pitfalls. First, the process discourages fixating on one particular explanation. And second, it reduces confirmation bias, the pernicious human habit of gathering just the evidence that favors our pre-existing beliefs.

Issue-mapping also helps decision makers examine a problem in detail. Take, for example, an information technology company trying to learn why it can’t turn a profit. While it’s easy to explain the problem with a standard breakdown between costs and revenues, drilling deeper can reveal the real issues.

“Why are the volume of sales too low?” Maybe clients are switching to competitors. But why? Some may do so because what the company offers is inferior. Alternatively, the offering may not be inferior, but clients nonetheless believe that it is. But why is it inferior, or perceived to be so? Is it because of one of the classic four Ps of marketing — price, promotion, place, product itself? If so, each of these issues could be broken down further. Studying problems with this level of relentlessness can unveil critical information that otherwise may be overlooked.

When a problem is complicated, of course, the danger is that mapping could go on and on. How to know when to stop? Surprisingly, Chevallier warns against immediately defaulting to a tactics such as time limits. When it comes to problem solving, he argues, artificial barriers can build artificial dead ends.

Ideally, Chevallier says, issue-mapping should continue as long as the new details discovered are valuable. The trick, of course, is to reach the far shores of possibility without falling into the claws of paralysis — the dragon that lurks where the map finally gives out.

Arnaud Chevallier is a former associate vice provost and instructor of strategic thinking in the George R. Brown School of Engineering at Rice University

To learn more, please see: Chevallier, A. (2016). Strategic Thinking In Complex Problem Solving, Oxford University Press.

By Allyn West; Photo credit: Ed Schipul

Phoebe Tudor knows how to save a building. With a master’s in historic preservation from Columbia University, Tudor and her husband, Bobby, moved to New Orleans, where she served for four years as the architectural historian for the New Orleans Historic District Landmark Commission.

The philanthropically-minded couple found their way to Houston a few years later. Here, Tudor served on the Archeological and Historical Commission, helped strengthen the city’s preservation ordinance and was instrumental in the formation of a group that restored the 1926 Julia Ideson Building, designed by Ralph Adams Cram as Houston’s Central Library. Led by Tudor and preservationist Minnette Boesel, the Julia Ideson Library Preservation Partners raised the $32 million for the restoration, which included the addition of an archival wing that houses the Houston Metropolitan Research Center.

That’s one place where you can learn the history of a city that is often accused of having “amnesia” as another landmark is torn down, replaced with something new and forgotten. You can study, for example, some of the original blueprints of the Harris County Domed Stadium—or the Astrodome, for short.

And it’s the Astrodome Tudor has her sights on next. “It’s a great asset for Houston,” Tudor says. “It’s one of our biggest icons, honestly, and we’re worried about what’s going to happen next.”

Completed in 1965 in the midst of the Space Race, just a few years after President John F. Kennedy’s famous call to action at Rice University, the Astrodome opened to international wonder. It was the first—and best, many still argue—of its kind. An architectural feat. An engineering marvel. A pinnacle of technology. All the superlatives seemed to apply. Apart from its one-of-a-kind design, the Astrodome played host to important competitions—from the Game of the Century between the University of Houston and UCLA to the Battle of the Sexes between Billie Jean King and Bobby Riggs—and performances—from Elvis to Selena to Evel Knievel—until the early 2000s, after the Houston Oilers had relocated to Tennessee and the Astros to a new stadium downtown. The Astrodome’s last great moment was in 2005, when it was a temporary shelter for residents who evacuated New Orleans during Hurricane Katrina.

It has been vacant ever since. It is paid for, but it costs Harris County taxpayers about $170,000 a year—most of which covers the electric bill. In 2013, voters failed to approve a bond that would have paid for a $217 million renovation into a convention center. When that vote failed, many feared it was a death knell, and the Astrodome would be demolished, once and for all.

What happened instead was a resurgence of interest and passion around what many others considered one of Houston’s greatest cultural assets. Just one year later, the Astrodome was listed on the National Register of Historic Places. Then, in 2017, it became a State of Texas Antiquities Landmark, granting it protection from demolition or unapproved alteration. Beth Wiedower, a senior field officer for the National Trust for Historic Preservation says: "It's not the only piece of our cultural identity, but it is a big piece of our shared cultural story, as Houstonians. And that has big-picture implications of how we define ourselves as a city and how we relate to each other."

Now, explains Wiedower, the conversation has changed. “It’s not, ‘Should we save [the Astrodome]?’” she says, “but what are the mechanics of saving and re-purposing it? How do we go about this?”

This is where Tudor comes in. Answering those questions, she says, “is my passion and my great interest and my professional training.” Teaming up again with Boesel and art historian and curator Judy Nyquist as founding board members and officers, Tudor established the Astrodome Conservancy in 2016. The Conservancy, says Tudor, is “an independent nonprofit.” It has federal 501(c)3 status and an eight-member board, which includes Wiedower. “We are now going down the road to become the official county partner,” Tudor says.

There has never been a shortage of good ideas about what to do with the Astrodome. The Urban Land Institute recommended that it become the centerpiece of a new public park. Architect James Richards proposed that it be stripped to its structural skeleton and wrapped in a several-miles-long hike and bike trail that curlicues up around it. The question, though, always begins and ends with how to pay for it.

Tudor, Boesel and Nyquist have inverted the path, starting with the same financial model that worked for them on the Julia Ideson Building ad that has become increasingly popular in Houston: the public-private partnership. It's the model that allowed the City of Houston to develop Discovery Green, Buffalo Bayou Park, Bayou Greenways and other public amenities, and Tudor believes it will help Harris County transform the Astrodome. “It’s working,” Tudor says. “It’s been hugely successful.” The strength of the public-private partnership is that it can “take on responsibility for city assets that are underutilized and underappreciated and that need something more than the city can provide.”

It’s too early to say just what that transformation will look like. Though a bill proposed by Texas Senator John Whitmire would require state oversight before Harris County can spend money on the Astrodome, the Harris County Commissioners unanimously approved a $105 million plan to begin bringing it back to life. The floor is set to be raised and a revenue-producing parking garage installed underneath.

Meanwhile, the Astrodome Conservancy is focusing on fundraising and advocacy. The Conservancy hired HR&A Advisors, consultants who are helping with visioning short-term, site-specific art installations and activations. “Then we start to do what conservancies do in these situations,” Tudor says. “They raise private funds. They won’t be taxpayer funds. And they can come from all sorts of sources.”

“I thought it would be terrible, terrible for the city, that the final result would be that it would be torn down. We don’t need to lose the Astrodome," Turdor insists. "We are at a new moment, and it's exciting."

By Claudia Feldman 

The other day David Karohl found himself completely absorbed in a story about a tea shop.

He was sucked in by the descriptions of the indomitable owner who had to sell because of declining health and the customers who ranged from Rice Business professors to yoga devotees to weary hospital staff.

“Things end,” an ICU nurse and tea lover told writer Claudia Kolker. “People die. But I thought (the tea shop) would go on forever.”

But it wasn’t just the poetry in the story by Kolker, Karohl’s dear friend, that grabbed his attention. He had been a regular at the tea shop himself, and he realized that he knew all the characters in the unfolding drama.

He is close to Connie Lacobie, the woman who is now the former tea shop owner. He is a friend and former business associate of Connie’s husband, Kevin Lacobie. And Karohl saw the story because he was scrolling through Rice Business Wisdom on the internet. He is a proud graduate of Rice Business, Class of 2001, and he knows the Rice professors who used to patronize the shop, too.

“Am I the center of the universe?” Karohl joked in a fan letter to his Rice Business friends. “Thanks for the fond memories of ‘all y’all.’ ”

Karohl is founder and president of My Best Plan, a company that helps clients get the best home electricity plans at the cheapest rates. As an entrepreneur, he knows that the sunny side of every business challenge is a lesson in life.

In 2015, as Connie Lacobie was struggling to find a buyer, the moral was this: In business, love isn’t enough. Prospective buyers weren’t interested in Lacobie’s vision of a nurturing community center for the city’s eccentrics. They cared about what was lacking — big profits and an industrial-sized kitchen.

Karohl knows that his intense, even joyous reaction to the Rice Business story might hold some lesson or kernel of business wisdom, too.

Perhaps his jest about being the center of the universe contains an earnest message about the power of networking. “People are generally pleased to find out they have connections to someone else,” he says. “I play squash, and through the game I can get to an amazingly broad number of people.”

Al Danto, a lecturer in management and entrepreneurship at Rice Business and managing partner of The Danto Group, says Karohl is onto something. Business networking, Danto says, is about relationships: whether it’s employees supporting each another, companies knowing their clients to best serve them or businesses working in tandem with other businesses. Increasing research now shows that employees' personal networks – and the networks of their friends – are powerful boosts to innovation.

“To make things happen, it’s critical to connect the dots,” Danto says.

That explains why Karohl greets friends and strangers with a few simple questions. He pries gently to find out what friends or connections they might have in common and if they’d like to pay less for their electricity.

The simple strategy has fed his growing success.

When Karohl opened his business in 2009, he had little more than an idea. Today he has a staff of five full-time employees, and his company’s software has more than 80,000 lines of custom-written code. Over the years, he’s employed more than 20 interns who have gone on to companies including Google, Goldman Sachs and Microsoft.

Rich soil for more networking.

Based on research by Alexander W. Butler and Sinan Goktan

• Startups can profit from partnering with newer venture capital firms.
• Younger venture capital firms have an advantage when analyzing startup companies: They gather information through relationship building and intense study.
• Inexperienced venture capitalists build on their strengths rather than resting on their reputations.

In the high-risk world of venture capital investing, successful firms don’t always start big. For venture capital firms that are young and inexperienced, wealth can flow from backing a similarly young company, and patiently building client confidence with financial records and persuasive information.

According to a study coauthored by Alexander W. Butler, a finance professor at the business school, and Sinan Goktan of California State University East Bay, a number of startups have partnered successfully with inexperienced venture capitalists. These newer venture capitalists, Butler and Goktan found, were highly motivated to build the financial backing and advice needed to showcase their startup partner’s potential.

Investors are aware that some well-known companies are nearly guaranteed to deliver profits. But newer companies also have the potential for huge returns if they can escape their lackluster credibility. And newer venture capitalists can be their ticket out. These equally hungry partners are willing use their own resources to build financial profiles that reassure bigger investors. When the heavy hitters join in, it can prompt an initial public offering.

It’s obvious why a startup would welcome that kind of support. But why do young venture capitalists take the risk? It’s because the collaboration benefits them as well, Butler and Goktan explain. The startups provide an important niche for younger venture capitalist firms, which gravitate toward companies that outside investors find hard to evaluate, then roll up their sleeves to build credibility for them.

While experienced venture capitalists judge an investment based on existing financial data, the young venture capitalists tend to be ground-breakers. Their goal is to offer bigger investors–with whom they have often already have relationships–a detailed view of what is going on inside a new company, and to show why those investors should be part of its future.

Younger venture capitalists don’t shrink from new firms that lack hard financial information. For them, a promising startup is an opportunity to be seized. Later involvement from more established venture capitalist firms is part of the plan. When these heavy hitters invest, word spreads that a company has major support and may be the next big thing.

To generate hard information for investors, the newer venture capitalists hustle. They talk with a company’s key people, and they learn what’s going on day to day. When they see fit, they give advice. Because their insights are built on relationships, the closer the venture capitalists are to a company geographically the more efficient the process tends to be.

These findings, Butler and Gotkan note, explain a puzzle. When startups pair with younger venture capitalist firms, the latter often do something that seems uncomfortably self-serving: They rush their startup partners into initial public offerings, a tactic known as “grandstanding.”

These collaborations continue, the researchers say, because the startups and the investment firms know their mutual inexperience has unique benefits for both. While young venture capitalists have incentive to grandstand, they also have a comparative advantage at gleaning crucial financial information. Both investor and investment in these arrangements, in other words, benefit from similar traits. They’re intensely motivated, they take the long view and they’re willing push an idea from dream to blue chip reality.

Alexander W. Butler is a professor of finance at Jones Graduate School of Business at Rice University.

To learn more, please see: Butler, A. W. & Gotkan, M. S. (2013).  On the role of inexperienced venture capitalists in taking companies public. Journal of Corporate Finance, 22, 299-319.

Based on research by Robert A. Westbrook and G. Anthony Gorry (1941-2018)

• Information technology is redefining customer service.
• Caring for customers has to be more than a phrase: It requires actively empathizing with their experiences.
• Building intellectual capital is as essential to business as stocking the shelves.

Information technology is redefining relationships between companies and customers. Much of the time, technology lets businesses increase the efficiency of their customer service, and gives customers new ways to access goods and services. But as Tony Gorry and Robert A. Westbrook, professors at Rice Business, argue, executives should think beyond measures of efficiency and see technology as a conduit through which customers can contribute intellectual capital to their businesses.

"We care for you," companies like to declare. To reinforce the declaration, they often offer "customer care" in place of what used to be customer service. But what does that mean?

To prosper, a business has to actually deliver on those professions of caring. And it has to deliver along a continuum in which each step is marked by trust and maximum ease for the customer: not just at the moment of sale, but also at delivery, installation, training, maintenance and repurchase.

Everyone knows what happens when a company doesn’t care. Protocols are needlessly complex, rules and conditions are onerous and requests for help are met with indifference.

The proliferation of technology has eased some of these problems and streamlined customer interactions with companies, which have, for example, implemented automatic call distribution, customer relationship management systems, interactive voice response, self-service web portals, multi-channel integration, intelligent call routing, live chat and automated callbacks.

These innovations often convey benefits to customers, who get swifter access to product information and services, quicker procurement and faster reporting of problems. At FedEx, for example, customers can dispatch and follow the course of their parcels online. At USAA and American Express, real-time information helps service representatives speedily answer inquiries and requests for help. At Amazon and many other businesses, information technology makes shopping online simple, easy and even entertaining.

What these businesses all have in common are senior managers who have devoted themselves and their companies to engaging with customers. A drive for excellent customer service, in other words, fueled technological innovation.

But technology can also undermine customer service. A relentless push for efficiency can drive a business to deploy technology in a way that is detrimental to customer relations. A rash of "innovations," aimed mainly at cutting costs, has made many businesses more opaque, leaving customers poorly served and frustrated.

Equally damaging, the scholars say, is how this use of technology has distanced employees from customers. The less contact there is between the two groups, the less authentic empathy the company can show, and the less companies can learn from those who use their goods and services. But if a company truly cares for its customers, its managers and front line employees have to listen to them.

Senior managers can take several steps, Gorry and Westbrook write, to avoid these unfortunate consequences of technology-mediated customer relationships. First: reaffirm the commitment to active, empathetic involvement with customers. Second: understand the effects of the company’s current procedures and systems on customers. And finally: use online social networks such as Facebook to help customers tell their stories and to help workers and managers really hear them.

Managers should think of online platforms as 21st century versions of the door to the general store, through which customers can amble and chat with the proprietor and employees. It’s that kind of interaction, detailed, informative and wide-ranging, that lends credibility when a company pledges, "We care."

The most important vehicle for customers’ input, say Gorry and Westbrook, is storytelling. A lot of the knowledge shared in organizations evades quantification; so does the information offered by customers. Instead, within the workplace, storytelling transfers knowledge.

While our devotion to storytelling has ancient roots, its implications for business are immediate. As face-to-face talking gives way to electronic connection, stories can still play a role in successful customer relations. Stories add detail to maintain the customers’ presence in a company’s imagination as actual human contact recedes. Numbers alone, serving as surrogates for stories, often lack important nuance and context.

A few firms are actively harnessing the power of customer stories. At Ritz-Carlton, senior management holds gatherings in 21 countries so staff can share customer stories and strengthen the company's emotional link with its clients. Harley Davidson executives and bike owners join together for rides, events and community service projects. And Levi Strauss trains thousands of employees to collect customer stories.

The modern company, Gorry and Westbrook note, is increasingly a knowledge business. What it can do depends on what it knows and how it exploits that knowledge. Most companies now understand how much of that knowledge resides in the skills of employees, along with their experiences, insights, intuitions and relationships. But customers, too, are crucial knowledge sources. Insightful businesses should treat them as potential contributors of ideas for improving operations and innovation.

By giving customer stories the same attention they give to narratives from their workers, the professors write, the best companies are building the intellectual capital that is now as important to any business as the products on their shelves.

Tony Gorry was the Friedkin Professor Emeritus of Management

Robert A. Westbrook is the William Alexander Kirkland Professor of Business at Jones Graduate School of Business at Rice University

To learn more, please see: Gorry, G. A. & Westbrook, R. A. (2011). Can you hear me now? Learning from customer stories. Business Horizons 54, 575-584.

Also see: Gorry, G. A. & Westbrook, R. A. (2010). Empathy, technology and customer care. Business Horizons 54, 125-134.

By Mary Lee Grant

Natsuyo Jaeke led her blind elephant into the River Kwai, just shoreward of the cool swift current that moved towards the mountains. The 58-year-old former Seattle banker side-stepped the elephant's feet and trunk, gently prodding her with a stick as she led her up the bank.

"I spent my entire career in banking, but I was one of those people who just wasn't passionate about my job," Jaeke said later. "I realized that what I loved was elephants."

Jaeke is one of a small but growing number of professional women who find working with the world's largest land mammal more rewarding than a traditional business career. Their passion echoes a rising awareness about elephants amid the general public: This winter, outcry against the misuse of elephants led to the recent closing of Ringling Bros. For Jaeke and at least a dozen other women caregivers, aiding elephants is the best use of emotional and management skills they have honed their whole lives.

Perhaps surprisingly, at least one business researcher thinks they're right.

"Sometimes we spend our lives acquiring more resources than we need, as we head in a direction we don't really want," said Scott Sonenshein, a professor at Rice business school and author of the new book Stretch: Unlock the Power of Less and Achieve More than You Ever Imagined. "People get on a career trajectory of moving on to the next thing of what is traditionally successful. It turns out not to be the life they wanted, but they continue to move towards the more impressive title and the bigger office."

As these Western woman mahouts know firsthand, it's possible to discover meaningful new work by simply taking advantage of leisure. Just slightly moving out of the familiar–even attending a conference in a new field–can open new horizons.

But it takes putting a higher priority on leisure–both individually and as a society. That doesn't seem to come easily. College-educated Americans have less leisure time than they did in the past, and actually spend fewer hours at recreational activities than those with only a high school education.

It was a serious approach to leisure, however, that inspired Jaeke to change her career, her life, and her home. Jaeke, who is Japanese-American, first began to visit Thailand on her vacations, volunteering at elephant sanctuaries.

Jaeke returned several times to Thailand as a tourist to hone her expertise in caring for and training elephants. Then, at a sanctuary called ElephantsWorld in Western Thailand, she fell in love, with a fragile, aging elephant named Lam Dam Duan that seemed to especially need her. Jaeke moved full-time to a nearby village, biking three miles each day to spend her time with the Lam Duan.

Another professional woman at ElephantsWorld already had made a similar choice. Agnes Tammenga, 56, grew up on a farm in the Netherlands. From the time she was a little girl, she dreamed of working with large wildlife, snipping pictures of tigers and elephants out of magazines. Though she married and pursued a career in the fast food industry, Tammenga never abandoned that childhood desire. In 2006, after decades of saving and planning, Tammenga moved to Thailand to help elephants abused by the tourist and logging industries.

Within weeks, she encountered an ailing elephant on a short chain, standing in the sun near the River Kwai. She organized a fundraiser to buy the elephant, whose name was Aun. Then she contacted Thai veterinarian Samart Prasitpon, who, she had heard, had begun to rescue elephants, too. She spoke no Thai, and he spoke no English. But somehow, they managed to launch a foundation.

Renting land in a lush mountain valley near the Burmese border, the pair eventually were able to hire 25 mahouts to tend 26 elephants on 51 acres. Today, hundreds of visitors arrive every month, as well as 100 volunteers every year.

This, too, reflects a little-appreciated ingredient for success both in work and in personal life, Sonenshein says. In our specialized era, it's easy to assume that a Seattle banker or Dutch restaurant worker wouldn't know enough about elephants to contribute much to a wildlife sanctuary. We demand formal qualifications.

Often, that sort of thinking is a mistake.

"We have to ask 'How might someone with other worldviews completely change the ways we think about working with these animals?'" Sonenshein said. "There are significant limitations to being an expert. Part of it is tunnel vision."

In fact, the very improvisation with which Tammenga and Samart achieved their goals — with few resources or even a common language — may have led to greater success, Sonenshein says.

Displacement and challenge can also forge resourcefulness, another ElephantsWorld volunteer found. After graduating with an economics degree from Queen's College in Ontario, Canada, Victoria Duffield planned to go to law school. But she took a break first, traveling through Asia to volunteer at wildlife sanctuaries. When she came to ElephantsWorld, she began training as a mahout.

She soon became smitten with an elderly, blind elephant named Bow and became the elephant's caretaker for three years. Bow needed medical attention and sometimes help during the night, so Duffield moved to a thatched-roof house adjoining the elephant infirmary, sometimes even sleeping beside the elephant.

It took time to gain respect from the young male mahouts, many of whom had learned to ride elephants before they could walk and grew up with elephant stables attached to their houses. But soon, Duffield's hard work and advancing knowledge earned their respect.

"Sometimes I feel like Wendy and the Lost Boys," said Duffield, 27. "They are my brothers, and we play and laugh and joke, and we support each other totally."

When Bow would collapse, as she did occasionally as her health failed, it was all hands on deck to help Duffield get her back on her feet. When Bow died several months ago, the elephant was buried with a full Buddhist ceremony — as are all elephants at the sanctuary. She was covered with blooming flowers and prayed over by chanting monks wafting incense into the hot jungle air.

Duffield found herself a long way from Ontario, Canada. Her life had revolved completely around Bow, and her next step was unclear. But she had found work she loved. She decided to stay on at ElephantsWorld and began to care for another blind elephant, Sri Tong. She is learning elephant foot care and says law school holds not a bit of interest. She plans now to apply to vet school, and perhaps start her own elephant sanctuary.

Mary Lee Grant is a freelance writer with a Ph.D. in comparative border studies. She completed the mahout training program at ElephantsWorld while teaching at the Hanoi University of Mining and Geology in Vietnam. She writes for Rice Business Wisdom. This article originally appeared in Gray Matters.

Based on research by Anastasiya Zavyalova, Michael D. Pfarrer, Rhonda Reger and Debra L. Shapiro 

• It’s possible to influence media coverage even during a crisis such as a product recall.
• When a recall occurs, addressing problems honestly creates a more positive public perception.
• The one exception: For uninvolved firms that nonetheless are tarnished by an industry recall, ceremonial actions such as staging a charity event can help.

In 2010, when a blogger described placing an order at a McDonald’s drive-thru and asking for “cadmium on the side,” the fast food chain knew trouble was looming. They were right. The blogger, attorney Jennifer Taggart, had found traces of the toxic metal often described as “the new lead” in McDonald’s Shrek glasses. The Internet quickly was ablaze with parental furor.

In response, McDonald’s launched a $15 million recall of the glasses, even though the cadmium levels in them actually conformed to federal standards.

Consumers, McDonald’s management knew, are harsh judges when a product is flawed, and even more so when the failure touches children. Hence the company’s swift action. It was strikingly successful. Shares in the blue chip stock rose by more than 1 percent following the recall.

Something similar happened in 2007, when Mattel, the world’s largest toy manufacturer, announced the biggest recall in its history. More than 420,000 Chinese-made toy cars were recalled because they were covered with lead paint, and 18.2 million other toys were recalled because they contained magnets that could be dangerous if children swallowed them.

The day before they announced the recalls, however, Mattel began an advertising campaign focusing on its commitment to producing safe products. After the recalls, shares in the company dropped 57 cents, to $23, during regular trading. Then a few hours later they rose by the same amount.

There are ways, in other words, for firms to salvage and even boost their reputations in the wake of a recall. Anastasiya Zavyalova, an assistant professor at the business school, studied how this is done, focusing on publicly-traded toy companies that managed to gain positive media coverage even in the most dire crises. As expected, firms with more serious wrongdoing got more negative coverage. But, Zavyalova and her coauthors found, journalists and bloggers often wrote negatively about individual firms even when other companies in the industry were undergoing recalls.

To understand why, the researchers grouped post-recall actions into two types: technical and ceremonial. Technical actions are practical, either addressing or reversing the wrongdoing. For instance, after Fisher-Price recalled 10 million Power Wheels toy cars in October 1998, parent company Mattel issued press releases with updates on work at its repair centers, where qualified electricians fixed shipments of defective toys.

Ceremonial actions, on the other hand, deflect attention from a crisis, show off a firm’s strengths and fuel good press. After Hasbro recalled nearly 9 million toys in June 2000, its press releases ignored the recall. Instead, the next day Hasbro acted ceremonially by announcing winners of its “Hasbro Teens With The Courage To Give” awards.

To determine how the media responded to firms’ wrongdoing and corrective actions, the researchers searched the Lexis-Nexis database from 1998 to 2008 for articles in the 50 largest U.S. newspapers and for blogs. Roughly 37,500 articles and postings were pulled. The team then analyzed the content of each with software that measures how often authors or speakers use words connoting positive or negative emotion.

Direct action addressing a problem, the researchers found, worked better to restore a firm’s reputation than did staging events to show off good citizenship.

There was one exception: companies in the same industry whose products were uninvolved in a recall. Oftentimes these firms had to reassure consumers as well, the researchers found. And in those cases, ceremonial actions did the trick.

That’s where leadership came in. It is up to managers to decide how to face a recall or other adverse event. Making the right call, the researchers found, can be all-important in determining if media – and the public – forgive a troubled company or even trust a completely innocent one. To preserve public trust, the researchers suggest, managers must address not only the crisis itself but consumers’ demand for a proper response to it. Depending on the problem, that response may require words, actions or an understanding of the power of symbols.

Anastasiya Zavyalova is an associate professor of strategy at Jones Graduate School of Business at Rice University.

To learn more, please see: Zavyalova, A., Pfarrer, M.D., Reger, R.K., & Shapiro, D.L (2012). Managing the Message: The Effects of Firm Actions and Industry Spillovers on Media Coverage Following Wrongdoing. Academy of Management Journal, 55(5), 1079-1101.

Based on research by David De Angelis and Yavin Grinstein

• Executive pay tends to reflect specific firm characteristics and needs.
• But an important portion of an executive’s paycheck falls within the discretion of company boards.
• The basis of that discretionary pay is still a puzzle.

In the best of worlds, executive pay and performance should be in sync. That's not just the opinion of shareholders and boards: Former UK Prime Minister Theresa May has prioritized reforms to avoid out-of-control executive pay, and and economist Thomas Piketty has long blamed executive raises for widening income inequality.

So how should a company’s board decide if they pay their top brass too much? The question is of special interest to the Securities and Exchange Commission, which in December 2006 required more complete disclosure of the way firms tie executive pay to performance. The SEC was concerned that rules governing compensation packages had not kept pace with the marketplace, so mandated greater transparency about the guidelines used to determine CEO rewards, performance targets and the time frame during which performance is judged.

The new reporting requirements allowed Rice Business professor David De Angelis and Yaniv Grinstein of Cornell University to undertake a vast study of executive pay patterns. First they culled data on CEO compensation contracts from the proxy statements of more than 490 public U.S. firms in the S&P 500 index. Then they reviewed each statement's section on CEO compensation.

What they found reflected an array of priorities that directly affect the value of America’s most successful corporations.

Ninety percent of the firms in the study granted some type of performance-based award, payouts contingent on a company reaching a specific performance level. While the statements showed that the vast majority of the performance measures were accounting-based, some 13 percent were market-based, and 8 percent were based on non-financial measures such as diversity and customer satisfaction.

De Angelis and Grinstein analyzed CEO packages across economic sectors, finding large variations in the incentives for executives in different types of businesses. Energy-related companies, for instance, tied roughly 43 percent of their compensation to market measures. Firms in the durable and shops sectors, however, based only 7 percent and 5 percent of their compensation, respectively, on market measures.

That compensation indicators tend to be similar within given sectors of the economy suggests that executive compensation reflects firm characteristics. Managers in high-growth firms, for example, tend to focus on actions aimed at long-term growth. For these firms, stock-price performance measures and sales-growth performance measures are likely to be used. CEOs in larger, more complex enterprises tend to be judged to a greater extent on market performance.

There’s a certain complexity, to be sure, in executive compensation arrangements. Firms typically spread out their performance terms of compensation to include both accounting and market-based targets.

But overall, De Angelis and Grinstein’s findings indicate that the structure of performance-based awards doesn’t come out of the blue. Instead, it’s consistent with economic rationales.

Not all CEO compensation, though, is in the form of performance-based awards. Firms also grant discretionary awards, ones that can be paid in cash or equity. These discretionary awards, the researchers found, tended to show no significant link to past, present or future performance. Why is this? The result is somewhat puzzling, De Angelis and Grinstein say, and merits further research.

The general public, in other words, is not alone in wondering how executives’ total pay correlates to the value they bring their firms. While there are advances in understanding the design of performance-based awards, discretionary pay remains a puzzle. That even academic researchers can't yet explain it should only increase public questions about how these pay models work, as well as scholars' resolve to study them further.

David De Angelis is an assistant professor of finance at Jones Graduate School of Business at Rice University.

To learn more, please see: De Angelis, D. & Grinstein, Y. (2015). Performance terms in CEO compensation contracts. Review of Finance, 19(2), 619-651.

By David Tobin 

This article by David Tobin, a former Senior Lecturer in Communication at Rice Business, was originally published as part of the curriculum in his class, Leadership Communication.  

In the business world, the problem with empathy is that too many people don’t understand what it really means and how big a factor it is in successful communication.

Houston Chronicle business columnist Chris Tomlinson sums it up well: “Surveys show that many managers consider empathy a sign of weakness or femininity, not the kind of thing macho businessmen embrace.” Quite simply, these managers are wrong. “Researchers who study leadership and corporate culture are turning up more and more evidence that empathic leaders build better teams, negotiate better deals and produce happier clients” (26 July 2015).

New York Times columnist David Brooks, who was the Rice University commencement speaker in 2011, makes the same point when he describes the rise of the “relational economy.” Computers are doing more and more of the cognitive tasks that used to be accomplished by lawyers and financial analysts–but they fail dismally compared to humans when it comes to handling a position of authority or accountability, or being part of a team. “Empathy becomes a more important workplace skill: the ability to sense what another human being is feeling or thinking” (4 Sept. 2015).

Here’s Tomlinson again: “Empathy is not mollycoddling, and it’s not a synonym for sympathy. It’s not solving someone’s problems for them or feeling pity...Empathy is an advanced communication skill that requires...understand[ing] the other person’s perspective by identifying his or her problems, needs, feelings, thoughts and values.”

Sound familiar? In Leadership Communication, we call it audience analysis. You know the mantra: “Business communication is goal-oriented and receiver-focused.” The best business communicators try very hard to know what their receivers are thinking, feeling, and worrying about. This knowledge (which, again, is not the same thing as sympathy) shapes how they communicate.

The last word on empathy I’ll leave to a Houston physician, internist, hospitalist, and essayist, Dr. Ricardo Nuila spoke at a Rice TEDx event about the importance of paying attention to patients’ stories. Inevitably, empathy came up: “Teaching doctors to empathize,” he said, “is modern medicine’s Higgs boson [the elusive “God particle” of subatomic physics] – how do we keep our doctors competent and simultaneously empathetic? . . . This is the essence of empathy: using your brain to extend yourself into someone else’s story” (14 February 2015).

The problem with empathy is the assumption that it’s mostly about flexing your emotional muscles–but it’s not. It’s about using your brain.

By Jennifer Latson

The Boy Who Loved Too Much, by Jennifer Latson, an editor for Rice Business Wisdom, was published today by Simon & Schuster. 

How Nice Is Too Nice?

Eli D'Angelo has Williams syndrome, a rare genetic disorder sometimes called the opposite of autism: people who have it tend to be extremely outgoing, unconditionally loving and indiscriminately trusting. Journalist Jennifer Latson spent three years following the lives of Eli and his single mother, Gayle, to tell this narrative nonfiction story about what Williams can reveal about the genetic basis of behavior and the quirks of human nature.

In this excerpt, Gayle and Eli stop at a motel during a summer road trip, where Gayle tries to thwart Eli's attempts to befriend everyone he sees.

It was nearly midnight, and Eli was dozing, when Gayle finally found a motel with a vacancy: a low white-brick building near an oil refinery in Clearfield, Pennsylvania. But as soon as she pulled into the parking lot, she was tempted to turn around and keep driving. The warm air drifting through her open window carried the acrid smell of diesel fuel on a cloud of cigarette smoke. The parking lot was filled with work trucks around which men stood in groups dimly lit by streetlights. Tractor-trailers lined the edges of the parking lot, bordering the motel like a menacing metal hedgerow.

Gayle considered getting back on the highway. If she drove all night, they could be home by morning. But she knew she was too tired. They were stuck here at the Clearfield Budget Inn.

Eli woke up when the car rolled to a stop. He surveyed the landscape enthusiastically, oblivious to the seediness of the place.

“I’ve never been here in a long time!” he exclaimed, clapping his hands together.

Gayle stepped out of the car and into the July heat, and opened the back door to let him out. She could feel the eyes of the men on her, the only woman in their midst, and on Eli, who was now rocking back and forth on his heels with excitement. Both Gayle and Eli were rumpled from hours in the car. Gayle, a youthful forty-one-year-old, wore a purple camisole and capri-length cargo pants that revealed some of her tattoos. On her back, feathery wings spread outward from her spine. Her left shin was covered with a series of colorful images: on the back, a dragonfly; on the left, flaming dice; on the right, a serpent coiled around a sword; and on the front, a red heart with a banner that said “Eli.”

Her long black hair, usually wavy, had gone limp in the muggy heat. She had pulled it up into a clip, revealing the discs that had stretched dime-size holes in her earlobes.

Eli wore a black T-shirt and the baggy denim shorts that Gayle had bought at Kohl’s just before the road trip, hoping these wouldn’t split at the seams like his last pair. She described her son as “husky,” but it was his pear shape that made him hard to shop for. Boys’ clothes weren’t designed with this shape in mind.

She ran a protective hand through Eli’s dark curls. His features were those of a much younger child: chubby cheeks, an upturned nose, and a smile so wide it made his eyes crinkle. They were crinkling now. His face was bright with joy, and he tugged at Gayle’s arm, pulling her toward the light, the trucks, the men. She jerked him forcefully in the other direction.

In the sweltering front office, the motel’s owner, an Indian man with thinning white hair, slid open a thick glass window—Bulletproof, Gayle thought. He looked as tired as Gayle felt. She rummaged through her purse to find her wallet and handed him her credit card. Eli, meanwhile, bounced up from behind her, smiling broadly.

“I’m Eli! What’s your name?” he said, extending a hand to the motel owner. The counter was higher than Eli’s head, but he stood on his tiptoes and strained to reach. The man gave him a quizzical look. Without answering, he reached through the window and shook Eli’s hand.

Turning to Gayle, the motel owner nodded toward the parking lot. “Don’t worry about those guys,” he said. “They’re here for the summer, working construction. They just like to relax out there after work.”

Only slightly reassured, Gayle took the room key.

“He likes me,” Eli declared as they left the office, pointing his thumb toward his own chest.

“I’m sure he does,” Gayle agreed blankly. She was already scanning the row of doors for the number on her key. She slung Eli’s backpack over her shoulder, rolling her suitcase across the uneven pavement with one hand and holding Eli’s hand with the other.

Eli peered at the faces of the men in the parking lot, hopeful that someone would return his gaze, but they looked away when he caught their eyes. One man lit a cigarette; another stubbed one out on the pavement. One man mumbled something too quietly for Gayle to hear. The others laughed.

Apart from the rest of the group, one man sat alone on the sidewalk, his elbows propped on bent knees, his head drooping heavily in his hands. His eyes were closed. Gayle noticed his sinewy arms, his muddy work boots. Maybe he was just tired from a long day, but Gayle’s instincts told her he was more likely drunk or high. She looked for a way around him, but he was on the walkway just in front of her room. There was no other way to go.

She whispered to Eli through clenched teeth, “Do. Not. Say. Anything. To. Him.”

“Why?” Eli replied in an ordinary voice. They were ten feet from the man, and closing in.

Gayle raised a finger to her lips. “Because. He’s sleeping.”

Eli’s eyes never left the stranger. When they were less than an arm’s length from the man, Eli shouted, “Are you sleeping?”

Excerpt from THE BOY WHO LOVED TOO MUCH by Jennifer Latson

Copyright © 2017 by Jennifer Latson. Reprinted by permission of Simon & Schuster, Inc, NY.