By Claudia Feldman

A non-Trumpian tweet widely shared on the internet on Friday:

Bezos: "Alexa, buy me something from Whole Foods."
Alexa: "Buying Whole Foods."
Bezos: [expletive deleted]

Bezos, of course, is Jeff Bezos, CEO of Amazon, and Alexa is Amazon's virtual personal assistant.

The joke was about the day's biggest business news: Amazon, one of the world's largest online shopping websites just acquired its seeming opposite in Whole Foods Market, a pricey brick-and-mortar grocery-store chain known for its organic products and fancy-pants customers.

Will this new relationship go the way of United and Continental? Or prove to be a blissful match? Rice Business professor Scott Sonenshein offered his spin on the $13.7 billion deal that threatens to upend the highly competitive grocery industry.

Q: Why the big headlines today? Is this just another acquisitions story?

A: No. A predominantly online retailer is making further inroads into brick-and-mortar retail and continuing to change the way we shop and how we consume.

Q: Explain the differences between these two corporate giants.

 A: Amazon is known as very cost-focused, very innovative, very high-tech, very frugal. Whole Foods, of course, offers premium products at premium prices and is sometimes called "Whole Paycheck."

Q: Can these two cultures coexist? 

A: Time will tell. At the start, at least, Whole Foods will be run as a separate subsidiary and the CEO, John Mackey, is staying on. The grocery chain has a strong brand, the customer base tends to be affluent, and Amazon wants to learn.

Q: What makes for a successful acquisition?

A: You need an overarching vision. Amazon has been very clear that this is not about cutting jobs but helping to find new markets and new ways of connecting with customers. That should help to assuage the concerns of Whole Foods employees. I also think it's important to have transparent leadership and clarity about metrics and goals.

Q: Let's talk about some corporate match-ups that haven't fared so well.

A: What looks like a successful merger on paper can be a disaster in reality. Take United and Continental. There were two very different customer service orientations — one with a customer-centered culture that was almost sacred. At United, not so much.

I think we tend to underestimate the complexity involved in acquisitions. Maybe the Whole Foods employees don't have such a good impression of Amazon. Maybe they think Amazon employees don't share the same values. But look how Amazon acquired Zappos.com, the online shoe and clothing shop. Bezos let them run independently.

Q: What else can go wrong in these multi-billion dollar deals?

A: Focusing on the financials of the acquisition and not accounting for the cultures, the people and how their work will be transformed. And some problems are just hard to anticipate. At the end of the day, you're not just buying real estate but skilled workers. It's important to build trust. It's important to be transparent.

Q: How does this move reflect bigger industry changes? What is the elephant in the room?

A: We've seen a dramatic transformation in shopping and retail in the past couple of years — a whole host of bankruptcies, the closing of hundreds of stores and a large increase in the number of online transactions. One day we will reach the tipping point where the majority of shopping is done online.

I think the insight, the takeaway, is that traditional brick-and-mortar retailers are stuck with an outdated store footprint and have designed stores that increasingly don't make sense for the type of shopping that happens today.

And Amazon has a head start. They relentlessly study how people shop.

This country has more retail space per capita than any other country by far. But retail is increasingly dependent on technological innovation too, not just product.

Scott Sonenshein is a professor of management at Rice Business and the author of Stretch: Unlock The Power Of Less And Achieve More Than You Ever Imagined.

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

This article originally appeared online in Gray Matters.

MBA@Rice will prepare the next generation of global leaders to excel

Rice University’s Jones Graduate School of Business  today announced plans to launch a new online Master of Business Administration program, subject to Rice Faculty Senate and accreditor approval.* MBA@Rice is designed to prepare the next generation of global leaders to excel in the ever-changing business landscape.

The Jones School is partnering with 2U Inc., a leading provider of high-quality education online, to deliver the program.

“Our top priority is to deliver distinctive degree programs and groundbreaking research to impact businesses worldwide,” said Peter Rodriguez, dean of the Jones School. “Through an extensive consultative process and formal vote, the Jones School faculty strongly endorsed this new program. We look forward to working with the Rice Faculty Senate and our accrediting body in the next developmental steps.”

“Offering these degree programs will increasingly involve leveraging digital education. Students across the country will have the opportunity to experience the Rice MBA program without the need to relocate,” Rodriguez added.

The Jones Graduate School of Business ranks among the nation’s top business schools by Bloomberg Businessweek and the Financial Times. MBA@Rice courses will be taught by nationally recognized faculty who integrate insights from their own research to teach in a compelling, engaging learning environment, Rodriguez said. Students and faculty will meet weekly in live, small-group online sessions. Students will study prerecorded, interactive course content between sessions. The program will include required on-campus immersive experiences and global offsite experiences, where students will collaborate in person to further develop leadership skills in a global context.

“The Jones School has a well-earned reputation for innovation, rigor and creativity in its educational programs,” said Rice Provost Marie Lynn Miranda. “This new approach is yet another example of the school’s agility and inventiveness in leveraging new technologies to reach a broader audience.”

“We’re excited that the Jones School plans to offer Rice University’s first blended degree program,” said Rice President David Leebron. “The Jones School faculty rightly insisted the highest standards be applied to this program, and we believe it will make an outstanding business education available to a larger number of talented students around the world.”

MBA@Rice will be designed to serve working professionals with extensive experience who may not have the option to study on campus. The program, targeting career accelerators, will join the on-campus full-time, professional and executive programs as avenues to earn the Rice MBA.

The Jones School seeks to launch the new program in 2018.

*Rice’s regional accrediting agency is the Southern Association of Colleges and Schools Commission on Colleges.

Based on research by Scott Sonenshein, Jane E. Cutton, Adam M. Grant, Gretchen M. Spreitzer and Kathleen M. Sutcliffe

• Employees place a high value on self-growth at work.
• Different types of organizations foster distinct types of employee growth.
• Employees within an organization tend to follow specific patterns when viewing their growth on the job.

We Americans like to think of ourselves as self-starting individualists. For entrepreneurs, the need for self-improvement is obvious: You’re either getting better at what you do or you’re being overtaken by someone else. But what about the vast majority of other workers: Those who draw a paycheck from an employer? Research shows that, for their own satisfaction, these workers, too, crave self-improvement. But who frames what that improvement looks like — and how it’s guided?

Scott Sonenshein, a professor at Rice University's Jones Graduate School of Business, joined colleagues Jane E. Dutton, Gretchen M. Spreitzer and Kathleen M. Sutcliffe of the University of Michigan and Adam M. Grant of the University of Pennsylvania to gauge the approach to employee growth — and the way workers understood and responded to those approaches — at three widely varying Midwestern organizations. For confidentiality, the researchers gave nicknames to each company.

They discovered that each business offered workers a different path to self-improvement, which the researchers labeled achieving, learning and helping. For example, at a for-profit financial services business, which they labeled FinCo, employees had to either achieve or leave. Interviews with FinCo employees revealed a go-go corporate culture complete with team chants, company-created mottos (“You’ll see it when you believe it”) and personal telephone affirmations from the CEO. When an employee didn’t meet company goals, supervisors delivered personal, highly challenging and sometimes job-threatening messages to light the necessary fire.

Workers at this kind of company really get only one kind of choice, the researchers found: They can get with the program and stay, or reject the company’s requirements and walk away.

Another for-profit company, labeled ChemCo, offered a much lower-pressure atmosphere. Unlike the FinCo managers, a ChemCo manager responded to an employee’s misstep with sympathy. “Don’t look at it as a mistake, take it as a learning process,” the manager advised. It’s no surprise, then, that ChemCo employees equated on-the-job growth with learning. In fact, the company insisted its employees learn their jobs through their own initiative. As one ChemCo employee reflected, “With this company you need to show initiative, you need to be a self-starter…. Those that have the need to be told and directed … tend not to thrive.” At FinCo, by contrast, employees are “told and directed.”

The researchers also looked at a non-profit organization they dubbed SocialOrg. A consortium of social services agencies, SocialOrg employed workers who seemed to split the difference between the company-directed growth required at FinCo and the self-driven growth at ChemCo. The non-profit’s employees responded to a wide range of influences, while the employer’s demands were somewhat less specific. As a result, workers often found themselves serving clients in ways that fell outside their expected job descriptions. For these employees, growth at work wasn’t measured in terms of hitting projections. It was judged by how successful they were at helping others.

The outcome: Whether caseworker, custodian or receptionist, everyone at SocialOrg was a part-time social worker. When a client needed help, supervisors encouraged employees to put down their day-to-day tasks and pitch in. With expectations riding on that kind of behavior, it’s no surprise that helping was an integral part of SocialOrg culture. In the words of a maintenance worker, “When I see that [my coworkers are helping], it makes me try to do it more.”

Curiously, while each of the three organizations encouraged its own variety of employee growth, the workers themselves tended to see their desire for each kind of growth as emanating from within — an example, perhaps, of our attachment to the idea of rugged individualism.

In a way, of course, they were right: the workers were largely self-selected, and likely to leave or be fired if they didn’t embrace the collective culture. The end result was three different organizations whose workers experienced distinct, specific personal-growth journeys. Though their missions focused on shareholders, customers or social service clients, the effect of each organization was like a school system, with its own way of teaching and grading.

Like it or not, Sonenshein and his team concluded, if you stay at your job long enough, your growth and productivity will start to follow organizational values, much as a grapevine follows a trellis.

Scott Sonenshein is the Henry Gardiner Symonds Professor of Management at Jones Graduate School of Business at Rice University.

To learn more, please see: Sonenshein, S., Dutton, J. E., Grant, A. M., Spreitzer, G. M., & Sutcliffe, K.M. (2013). Growing at work: Employees’ interpretations of progressive self-change in organizations. Organization Science, 24(2), 552–570.

Based on research by Vikas Mittal, Yan Anthea Zhang and Christopher Groening

• To succeed, a firm must treat its customers and its employees well. Both groups are important stakeholders.
• Investors rely on observable measures of how a firm treats its employees and customers as “signals” of true firm value.
• Consistency is critical for investors: Customer satisfaction is more positively valued when matched by employee satisfaction, and vice versa.

Three prepared organic meals a day, personal-fitness classes, health clinics, on-site oil changes, haircuts, nap pods and a spa truck.

No, we’re not talking about a retirement community in Boca. If you work for Google, this is your workplace. In 2015, for the seventh time in a decade, Google placed first in Fortune’s “Best Companies to Work For.” If you are an employee, you want to work for a company like Google.

And if you are a customer? You might look to Amazon, which topped USA Today’s 2015 list for best customer service – its sixth consecutive year at number one.

“We’re not competitor obsessed, we’re customer obsessed,” Amazon founder and CEO Jeff Bezos has said. “We start with what the customer needs and we work backwards.”

So employees want to work for Google. Customers want to shop with Amazon. But what about investors?

Sure, investors crunch the numbers. They look at balance sheets and income statements. They even hire bright-eyed MBA graduates to dig deep into SEC filings and search the footnotes for any informational advantage.

However, in addition to the quantifiable data, investors also rely on a firm’s observable characteristics and activities as cues to filter and sort in terms of value. In other words, how firms treat their employees and customers can be used as “signals” by investors in their assessment of firm value.

For example, employee perks, such as a profit-sharing program, can make a firm more valuable in the eyes of investors. Customer-related benefits, like the development of a better product following a successful R&D effort, can provide a similar boost. In contrast, lapses with employees or customers can undermine investors’ valuations. Large-scale layoffs (which negatively affect employees) or product-safety recalls (which alienate customers) send negative signals to investors about a firm’s long-term competitive advantage.

But how do investors make sense of multiple or conflicting signals? Recent research coauthored by Rice University professors Vikas Mittal and Yan Anthea Zhang explores the way investors take in the big picture.

The results show that when a firm consistently pleases both employees and customers, its long-term value increases. But if firms are inconsistent, making their customers happy but not their employees, or vice versa, investors will discount the success. This “cross-validation” effect is even more pronounced for businesses with a narrow business scope. (For example, 1-800-FLOWERS as opposed to General Electric.)

What does the cross-validation effect mean for firms? It means that marketing and human resources executives shouldn’t work in isolation, but coordinate with each other. And it means investors notice and value consistency across multiple stakeholder groups.

So, for example, Amazon has recently been criticized for its strenuous work environment. Jeff Bezos might be obsessed with customers, but Amazon could benefit more if its employees were seen to be happy as well. If the corporate environment is viewed as "bruising," then investors aren’t going to value the customer-related achievements as highly.

It is said that a person cannot serve two masters. But can a business? Mittal and Zhang’s research suggests that they should try. Business organizations can’t ignore any of their many masters (or stakeholders). Because investors, themselves a stakeholder group, pay attention to them all.

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

Yan Anthea Zhang is a Fayez Sarofim Vanguard Professor of Management in Strategic Management at the Jesse H. Jones Graduate School of Business at Rice University. 

To learn more, please see: Groening, C., Mittal, V., & Zhang, Y. (2016). Cross-validation of customer and employee signals and firm valuation. Journal of Marketing Research, 53(1), 61-76.

Based on research by Vikas Mittal and Carly M. Frennea

• Marketing executives need a nuanced understanding of five different types of customer commitment.
• Marketing managers should handle each type of commitment differently.
• Firms need to avoid forced customer commitment to their brands, instead fostering loyalty based on habit and a perceived economic value.

How do you tell the world about yourself? Maybe you donate to women’s microbusinesses, fret aloud over the shrinking ice cap and drive a Prius or a vintage stoner Volkswagen van. Or maybe you announce yourself in a different way: You support the ballet gala and drive a Mercedes, impressing friends and enemies alike with understated elegance.

We all choose the brands we do because they say something about us, furthering an identity we crave. Often, that identifying power is the main reason we buy. Known as “normative commitment,” it’s one of five key types of commitment in a new model that explains what drives customers to choose certain products.    

Developed by a team including Vikas Mittal, a professor at Rice Business, and Carly M. Frennea, engagement science manager at Nike, Inc., the model is based on two large-scale studies that, combined, spanned ten different countries and a variety of products, services and industries. Using this research, the team identified five types of commitment that consumers make toward a particular brand.

What, for example, induces a person to pay $170 for moisturizer in a gilded flask rather than $1 for the same product in a plastic tub from Dollar Tree? She may actually want that economic sacrifice, equating it with higher value. The motivation here is called “economic commitment.”

Emotion is another driver of consumer choice. Maybe you serve your children Jif peanut butter because it summons happy memories of your mom using it for sandwiches. Researchers call this type of loyalty “affective commitment.”

Not all buying choices resonate so deeply. Maybe you keep using your Microsoft products because you always have. True, you once flirted with Apple, but why quit something good, something known, something comfortable? This type of buying pattern is “habitual commitment.”

Commitment can also arise from darker drivers, what researchers label “forced commitment.” You stick with your electric company because it is the only game in town. Spam and Ramen are the foods you can afford to eat. Not surprisingly, coerced loyalty is the most fragile. The customer feels like a hostage. As soon as an escape appears, she’s gone. 

Past marketing studies have dealt with the service industry and ignored consumer commitment to products. Because no previous study had tested commitment models in countries outside of the United States, the research scholars addressed these gaps in two studies. The first, conducted among 2,246 customers in the U.S., examined both products (gaming consoles, handheld devices and operating systems) and services (hotels, pharmacy, web search and retail). The second surveyed 6,696 people from nine different countries, and examined the automotive, banking and mobile phone industries.

The analysis revealed some clear lessons for marketers. First: avoid forced commitment. Naively, many marketers believe that increasing customer barriers – so called exit barriers – strengthens a company’s position. It doesn’t. It just makes the customer feel like hostage. Instead, firms should try to foster economic and habitual commitment. The first creates a sense of value, and the second makes consumption easier. Both are more authentic reflections of what the buyer really wants, which makes them more sustainable.

Different commitment types, moreover, work best with certain product types. Affective, normative and habitual commitments get more traction when consumers are buying goods rather than services. Economic commitment, on the other hand, drives more services purchases, especially those that come with loyalty programs.

Because affective commitment matters the most, executives want to know the best way to promote it. Simple: deepen brand attachment. To do this, marketers need to ensure work on brand building. They also need to make sure that customers see a product or service going beyond the bare minimum. Economic commitment, on the other hand, is best built with tools such as loyalty programs.

Know thy customer and why he or she may want what you are selling. Commitments to customers can reveal truths that make the difference in how long your relationship with your customers will last.

Vikas Mittal is the J. Hugh Liedtke Professor of Marketing and Management at Jones Graduate School of Business at Rice University and an adjunct professor of family medicine at Baylor College of Medicine. Carly M. Frennea received her PhD in marketing from the Jones Graduate School of Business.

To learn more, see: Keiningham, T. L., Frennea, C. M., Aksoy, L., Buoye, A., & Mittal, V. (2015). A five-component customer commitment model: Implications for repurchase intentions in goods and services industries. Journal of Service Research, 18(4), 433-450.

Based on research by Robert E. Hoskisson, Seemantini Pathak and Richard A. Johnson

• When a CEO leads a company through refocusing efforts such as divestitures, he or she should be compensated by “settling up” after the process is over.
• Firms settle up more generously when their boards are dominated by independent director monitors.
• Settling up lets the board enjoy a positive relationship with the CEO during the often rocky divestiture process.

Leading a firm through major change, such as divestiture, puts a CEO in a risky spot. On the one hand, making cuts and other tough choices can strengthen a company in the long run. But it also brings uncertainty. How many businesses can be sold and at what price? How long will the process take? How much effort will it demand? How much emotional fallout will there be to manage?

Because there’s no easy answer to these questions, it can be hard to know in advance how CEOs should be paid during a major transition. It makes sense, then, for firms to decide on compensation after the strategic change has been completed.

Robert E. Hoskisson, an Emeritus Professor at the business school, joined a team of researchers to look at how CEOs are compensated after a major strategic change.

They looked specifically at corporate refocusing, a technical word for what can be a painful process: changing a company’s scope through divestitures, including asset selloffs, spinoffs, split-ups or management buyouts. Intense refocusing not only unleashes enormous upheaval in a firm – it increases professional uncertainty for top managers.

The CEO's role is clearer during an expansion, as is the reward she should receive for her performance. In a divestiture, however, when the firm’s size or scope is shrinking, it’s not always obvious how big a CEO’s payoff should be. 

Since refocusing can last for months or even years and involve much of the company, it's also difficult to predict its full implications. It took five years for International Paper to divest 26 units. Pfizer, on the other hand, divested a full 40 percent of its holdings during a refocusing process.

A CEO's job gets more complex as a company shrinks. First, she has to decide which business units should be divested and decouple them from the firm. She has to work with the managers of the units being divested, who naturally may fight the decision and try to save their jobs. She also has to find suitable buyers, negotiate with them and hand over the business in good order. Finally, she has to address the survivor trauma in the managers and employees who remain. All these duties multiply if the firm is engaging in a number of divestitures at the same time.

To better understand how firms compensate their CEOs in these situations, Hoskisson and his coauthors gathered samples of refocusing firms in a range of American industries. Altogether, they examined 227 divestiture programs that added up to a total of 1,395 individual divestitures.

What they found: Firms settle up more generously when recent performance is good and when the board of directors is dominated by independent director monitors. The settling up, in other words, depends not only on the intensity of the strategic change, but on its context. And this variation in compensation amounts has a range of consequences.

Refusing to pay CEOs for the increased risk and complexity they take on when overseeing divestitures ends up creating behavior that is destructive to the firm. Executives who worry that the risk and effort associated with strategic change could lower their pay will often balk at facilitating that change – especially if they designed and created the portfolio of businesses that generated the need to restructure. Alternatively, when the refocusing process is long and arduous, they also may grow dissatisfied with their jobs and act opportunistically, maximizing short-term profits at the long-term peril of the firm.

Predicting either the intensity or outcome of a refocusing project is always going to be dicey. So is guessing how much uncertainty a CEO can tolerate about his or her compensation. For CEO and company both, Hoskisson’s team concluded, settling up after the fact is better business. Board and executives both can focus on refocusing. The CEO isn’t walking a tightrope between a safe paycheck and the long-term health of the firm. And the board can be more confident that the company’s leader isn’t dodging risks at the very moment he or she needs nerves of steel.

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: Pathak, S., Hoskisson, R. E., & Johnson, R. A. (2014). Settling up in CEO compensation: The impact of divestiture intensity and contextual factors in refocusing firms. Strategic Management Journal, 35(8), 1124–114.

Video of Anastasiya Zavyalova

Rice Business professor Anastasiya Zavyalova explains how when it comes to corporate reputation, customer love can be fleeting, but customer hostility can persist.

Based on research by Haiyang Li (Rice Business) and Jade Yu-Chieh Lo (Drexel)

Key takeaways:

• Functional diversity on innovative projects has a more complex effect than once thought.
• Diversity, in this context, refers to differences in the primary function or specialization of participating firms that are collaborating on projects.
• Technical reviewers react neutrally to industry diversity. Business reviewers react to it less well.

When fund reviewers consider an innovative proposal, the mix of collaborators can shape how that proposal is received. But whether diversity helps or hurts depends on who is doing the evaluating.

Haiyang Li of Rice Business and Jade Yu-Chieh Lo of Drexel University examined this question using data from collaborative projects funded by the Advanced Technology Program at the U.S. National Institute of Standards and Technology. To qualify for funding, projects had to be both innovative and collaborative, with clear potential for broad economic impact.

Each proposal went through two distinct reviews: business reviewers — consultants with backgrounds in venture capital, business development and economics — who assessed market potential; and technical reviewers — drawn from NIST, federal labs and the scientific community — who evaluated technological feasibility and innovation.

Prior research has explored how diversity among collaborators affects project performance. Li and Lo instead asked how diversity shapes how projects are judged.

How do different reviewers respond to participant diversity?

The researchers analyzed 138 collaborative projects across 29 technology categories funded between 1993 and 2001. For each project, they measured:

• Participant diversity: differences in firms’ primary industry classifications.
• Novelty: whether the project represented a new R&D direction for participating firms.
• Category clarity: how clearly defined or “fuzzy” the project’s technology category was.

They then compared ratings from business and technical reviewers.

What they found is that the two groups responded differently to participant diversity.

Technical reviewers reacted neutrally. From an R&D perspective, cross-disciplinary collaboration can signal creativity and intellectual cross-fertilization. Diversity did not significantly affect their evaluations.

Business reviewers, however, were less receptive. Projects spanning multiple industries can appear harder to position in a market, more costly to coordinate or less focused strategically. On average, diverse collaborations received lower ratings from business evaluators.

When does functional diversity help — and when does it hurt?

That negative effect, however, was not uniform.

When diverse teams proposed highly novel projects, the penalty disappeared. Strong novelty mitigated business reviewers’ concerns. Category clarity also mattered. If a project fit within a clearly identifiable technology category, diversity was no longer viewed negatively — and in some cases was viewed slightly positively. By contrast, when projects fell into ambiguous or “fuzzy” categories, diversity amplified skepticism.

The findings suggest that diversity in collaborative innovation has a more complex influence than previously assumed. It does not simply affect how teams function internally. It also shapes how outsiders interpret a proposal’s coherence and market promise.

For innovators, the implications are practical. Diverse teams may generate valuable ideas, but they must also present those ideas in ways that signal clarity and commercial direction. For researchers, the study opens a broader question: how do different evaluative lenses shape which innovations move forward — and which stall at the funding stage?

Li and Lo (2018). “In the Eyes of the Beholder: The Effect of Participant Diversity on Perceived Merits of Collaborative Innovations.” Research Policy.

Based on research by Wagner Kamakura and Sangkil Moon

• Studying the language and the personal nuances in product reviews can give powerful insights into not just the products, but the consumers who post the reviews as well.
• These insights can be translated into product positioning maps — charts that help create marketing strategies.
• Product managers can deploy these maps to better reach and serve potential customers.

Product reviews are everywhere. From appliances on Amazon to hotels on booking sites, we all scan reviews before clicking “add to cart.” There's a reason the reviews are there: Virtually all websites selling products or services invite consumers to leave product feedback, in the hope the comments will help induce other shoppers to buy.

But while plenty of academics study product reviews, they mostly ignore the reviewers themselves. Wagner A. Kamakura, a professor at Rice Business, is not among them. He, along with his colleague Sangkil Moon of the University of North Carolina at Charlotte, wondered whether reviews say as much about consumers as about the products they review. To find out, Kamakura and Moon crafted a research tool to isolate a writer’s style from the product features mentioned in a review.

Traditional market surveys ask customers to rate items using defined terms and predetermined attributes for specific products. But because this method forces consumers to view products through the lenses defined by the marketing researcher, it’s potentially biased.

Kamakura took a different approach. He focused on the spontaneous language of individual reviewers, and the kinds of sites where their reviews appear. Each review, he contended, reveals critical insights about both product and reviewer. When looking at reviews on hotel websites, for instance, Kamakura was able to categorize reviewers based on their linguistic tendencies and perceptions, dividing them into categories such as business, couple or family travelers. This approach helps expand the product-positioning map beyond a one-size-fits-all survey, since different reviewers express different needs, education and experience.

Kamakura also found a key distinction between aggregate sites, which pull together different products from different companies and where multiple reviewers can voice very different priorities, and sites that offer only one type of product. On sites offering multiple airline or hotel bookings with thousands of reviews, for example, researchers need to consider what type of consumer is leaving a review. Is it a tourist booking a vacation to Cancun, or a CEO heading to Silicon Valley?

To gather precise data about these consumers, Kamakura says, researchers need to sort their reviews into reviewer categories before plugging them into tools for product positioning.

For their research, Kamakura and Moon looked at multiple hotel-booking and wine-rating sites. Both types of site, they reasoned, attract varied reviewers: most of the wine reviewers were trained experts who used distinct dialects of “Winese” — connoisseurs’ jargon — in their wine reviews. Meanwhile, the consumers who studied hotel sites logged on with a range of travel goals. Grasping these distinctions helps businesses fine tune their products and marketing communications.

Kamakura and Moon’s framework relies heavily on ontology learning in which terms, words and expressions are extracted and categorized through a human/machine interaction. The coding gleaned from this process was then submitted to the new framework, to produce a final product-positioning map.

It’s a method that requires considerable time in data collection and taxonomy building, but can process a huge amount of information efficiently. Processing multiple reviews makes a difference. For example, the typical consumer can’t quite verbalize why they like or dislike a wine, so they rely on reviews posted by experts.

For both the wine and the travel sites, the product-positioning maps spotted a number of consumer groups that could help managers develop informed marketing strategies. On the travel sites, for examples, families seek out activities that are entertaining; business travelers just want to get their jobs done. The maps also show managers areas with potentially weak competition. Managers could use these maps, Kamakura writes, to build niche-marketing strategies.

Studying reviewers along with their reviews also sheds light on how different groups of consumers focus on different aspects of a product. In a world where computer algorithms and Internet cookies track, store and share consumer information, consumers’ own thoughts about the products they use are powerful new tools for understanding their habits and their mindsets — which, needless to say, is fine for business.

Wagner A. Kamakura was the Jesse H. Jones Professor of Marketing at Jones Graduate School of Business at Rice University.

To learn more, please see: Moon, S., & Kamakura, W. A. (2016), A picture is worth a thousand words: Translating product reviews into a product positioning map. International Journal of Research in Marketing, 34(1), 265-285.

Physician trainees learn business essentials at Rice Business

A group of 32 physician trainees from the Texas Medical Center’s leading hospitals gathered at Rice’s Jones Graduate School of Business in April for an intensive 14-day new certificate program designed to impart essential management skills critical to a successful career in medicine and health care.

Led by distinguished Jones School faculty, the Rice Education in Management for Physician Trainees program (REMP) grew out of a recommendation from faculty and practitioners at academic medical centers, including Baylor College of Medicine, The University of Texas MD Anderson Cancer Center, Houston Methodist Hospital and The University of Texas McGovern Medical School. Those sources said that apart from clinical training, physicians need to learn interpersonal, communication and leadership skills, effective teamwork, professionalism and systems-based management practice so they are better prepared to address the business challenges of the health care profession today. This is a view echoed by the Association of American Medical Colleges, the Liaison Committee on Medical Education and the Accreditation Council for Graduate Medical Education, according to program organizers.

The program comes at a time when health care, the largest industry in the U.S., faces many challenges, including skyrocketing costs, increasing demand, inadequate access to care, inefficiency, inconsistent quality of services and nonuniform processes, program organizers said. With growing recognition that many of these challenges are truly business problems, the industry is slowly realizing the need to change the way physicians get trained, which the organizers said has not changed substantially since 1910, and how they work.

The idea for the program originated in spring 2015, said Dr. Binata Mukherjee, director of the Jones School’s Health Care Initiative, which coordinates the program. “We were exploring how else we can service the physician community and the health care professionals across the medical center,” she said.

“We realized that the medical and health care landscape has been changing,” Mukherjee said. “The industry is in flux. Physicians need management education, but it is nowhere in their curriculum, (either) in medical school or residency or afterward. They do not have a formal management education, but they are expected to take leadership positions. Even at the point of care delivery, the physician is a leader, whether performing a tracheostomy or putting a tube in the esophagus. What we are doing is trying to get all the management skills taught in a comprehensive and structured manner for a large group of people.”

Modules included Working in Teams: Leading and Collaborating While Delivering Care, taught by Brent Smith, associate professor of management, associate professor of psychology and senior associate dean of executive education; Negotiation and Influence Strategies, taught by Jing Zhou, the Houston Endowment Professor of Organizational Behavior; and Analyzing Cost in Hospitals, taught by Shiva Sivaramakrishnan, the Henry Gardiner Symonds Professor in Accounting.

‘We are talking about people’s health’

“The cost aspect of health care… is a big thing these days,” Sivaramakrishnan said. “My area is management accounting. There are some new paradigms coming out in this area. Things like ‘How do you measure cost at the patient level? How do you deliver value to the patient? How do you make sure that you do not compromise health outcomes because of cost consideration?’ So it’s a very complicated thing that physicians and health care providers face. Rice is so uniquely positioned next to (these) establishments… and I’m so happy to contribute.”

Sivaramakrishnan said teaching “very intelligent” physician trainees allows him to tailor the course content so it is thoroughly relevant. “Going through medical education is very demanding,” he said. “Although I cannot assume a content knowledge… I want to teach the course in a way that will make them understand how their actions are going to influence costs. Health care is so complex. When you talk about value and what you deliver to your patients, you cannot sacrifice anything. We are talking about people’s health. At the same time, if we can sensitize them to the cost aspect … can they navigate the system in a way that they don’t sacrifice the outcome?”

For some of the participants, who applied and were selected at the institution level, the program was eye-opening.

“In medical school and residency, we get very little exposure to the business side of things, and with the field of medicine rapidly changing, I think it’s important now more than ever to really understand the business side of medicine,” said Dalia Moghazy, a third-year OB/Gyn resident at Houston Methodist Hospital. “I think it’s important to be able to apply business management principles to clinical management. I like that it’s (the program) very interactive and there’s a wide diversity of topics we learn about.”

Siddarth Thakur, a fellow in pain management at MD Anderson, said he appreciated the program’s collegial culture. “The thing I liked best about the course was meeting all my other colleagues who are in similar situations. They’re all fellows at various different institutions in the medical center. To be able to have discourse with them and discussions about what we learned in class was probably the most valuable. For other participants that are considering the course, I would emphasize that they really should do it, because we don’t have this sort of opportunity anywhere else.”

Physician leaders need ‘to be in the middle of the mix’

For the program’s sponsors in the medical center, the need for REMP is imperative.

“REMP is a unique program that I’m not sure exists anywhere else in the country,” said Dr. Jennifer Christner, dean of Baylor College of Medicine’s School of Medicine. “There is a strong need for this program, and we are fortunate that our residents are able to take part in this opportunity. I don’t know of another institution that has addressed this need so comprehensively.”

Dr. Robert Phillips, executive vice president and chief medical officer at Houston Methodist and a professor of cardiology at the Houston Methodist Institute for Academic Medicine, echoed Christner’s comments.

“A fundamental change in health care is underway that is driven by the understanding that best outcomes will be achieved through application of evidence-based medicine that is delivered in a coordinated, team-based and patient-centric fashion,” Phillips said. “Emerging clinical leaders will be most valuable when they are equipped with the tools that enable them to understand how their behaviors and performance link to the success of the larger health care system. We need physician leaders to be in the middle of the mix so that the ever-evolving changes in health care are informed by clinical expertise. To effect this change and goals, physicians need to be educated in the fundamentals of leadership; strategic thinking; organization behavior and design; finance; operations; and change management. The REMP program has been designed to enable emerging physician leaders to obtain these skills.”

Applications are being accepted for the upcoming REMP program.

The Health Care Initiative at the Jones School aims to provide relevant business education to young physicians who can jump-start their careers with skill sets that will not only set them apart but also respond to the critical need for “bending the cost curve” while improving health care outcomes.