Rice Business - Fall 2018

M A G A Z I N E O F T H E J O N E S G R A D U AT E S C H O O L O F B U S I N E S S AT R I C E U N I V E R S I T Y

How We’re Doing One Year Later 1

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Senior Associate Dean Barbara Ostdiek and Dean Peter Rodriguez pose for the camera in the Vila Madalena neighborhood of SĂŁo Paulo, home to Batman Alley, on their first day of the Full-Time MBA Global Field Experience to Brazil. The city tour also included visits to monuments, Ibirapuera Park, the Contemporary Art Museum, and the Nossa Senhora do Brasil Church.

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contents

4 RICE BUSINESS

RICE BUSINESS Fe a t u r e s

32 Houston: How We’re Doing Interviews one year later

34 Shelter from the Storm

How one person organized a shelter in one day

38 Stocking Up

Lessons learned to prepare for the next big disaster

40 V2C2: The Next Chapter

Rice broadens its foundation and reach

42 Well-Being

A modern CEO merges equal parts successful innovator and servant leader

46 Object of My Affection

What happens when a brand we know and love fails us

50 Leadership at Large

Building leadership and team coaching into the curriculum

D e p a r t m e n t s

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Rundown Impressions Rice Business Wisdom Word Watch Around the Water Cooler Peter’s Page

Rice Business is published semiannually for alumni and friends by the Jesse H. Jones Graduate School of Business. Current and back issues of the magazine are available online at business.rice.edu/RB.

Dean Peter Rodriguez

Change of Address?

New Job? Update the online directory with your new contact information at business.rice.edu/alumni.

Design Director Bill Carson, Bill Carson Design

Comments or Questions?

We’d love to hear your thoughts about Rice Business. Send an email to Weezie Mackey, editor and associate director of communications, at wmackey@rice.edu.

Left: Embracing the moment at Investiture.

Photo credit: Poppy Seed Images Cover photo: James Zhao ‘15

Executive Director Marketing and Communication Kathleen Harrington Clark Editor Weezie Mackey

Rice Business Wisdom Claudia Kolker Jennifer Latson Marketing Ashley Daniel Tricia Delone Dawn Kinsey Eduardo Martinez Michael Okullu Kevin Palmer Contributing Writers Anne Bagamery Tracy Barnett Ryan Kirksey ’13 Jennifer Latson Clifford Pugh Weezie Mackey Contributing Photographers Bill Carson Jeff Fitlow Kevin Palmer Wiley Price James Zhao ’15 Elisabeth Zook Printing Chas. P. Young Co.

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FROM THE

DEAN

“ Like other pivotal moments in our history, the time will

come when Harvey is a measure of where you were at a certain time, how you fared, how far you’ve come since then. But Harvey was personal. And every story of loss or heroism or reflection is unique. ” —Peter

Dean Peter Rodriguez celebrates with Pratik Seta FT ’18 and his daughter.

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2018 reunion by the numbers ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

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t’s remarkable how, in the blink of an eye, August becomes October and the beginning of the school year is miles behind us. Where did the time go?

For some, their eyes are on the prize, and they can’t wait for May. Others relish their time back in school and don’t want it to end. I know that feeling all too well. It’s a bit like parenting: the days are long but the years are short.

Last year was different. A year ago at this time, we were emerging from the trauma after Hurricane Harvey and returning to work and school. It was a solemn time. We had recovered from the worst on the outside, but many in our community were suffering at home. Some still are. Last year’s issue of the alumni magazine included several articles about the storm. This fall’s issue assesses Houston’s response to the crisis and our powerful responses to each other and to strangers.

Like other pivotal moments in our history, the time will come when Harvey is a measure of where you were at a certain time, how you fared, how far you’ve come since then. But Harvey was personal.

And every story of loss or heroism or reflection is unique. I am committed to looking ahead without forgetting where we’ve been. To forge a strong future, we must use the storm as a bookmark in our history, not a chapter.

As we begin rankings season; football season; another Astros run, hopefully; and all the renovations that have begun at McNair Hall, we also enter the fall head on. As the busiest building on campus, McNair couples its spatial demands with being relevant. We have grown in both size and reputation since we moved to this new building in 2002. It has been well loved during that time. And now we want to make it technologically useful and aesthetically pleasing to those of us who use it every day (students, faculty and staff) and those who visit (alumni, prospective students and guests).

Homecoming is the perfect opportunity to come back to campus, see the changes to the building, attend the tailgate and football game. We’d love to reconnect. — Peter

434

alumni attendees

total attendees

698

9 122 Executive Education classes

alumni live streamed EE classes

150

kids baseball caps given away

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different events throughout the weekend

394

photo booth pictures taken

724

scoops of ice cream from Ben & Jerry’s

307

reunion donations

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rundown

A ROUNDUP OF NEWS FROM RICE BUSINESS AND BEYOND

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Jim McIngvale, also known as Mattress Mack, shared stories of service to the Houston community during Hurricane Harvey at the Rice Customer Management Symposium.

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faculty

||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| Election Results Holli Ladhani EMBA ’10 joined the Rice University Board of Trustees July 1. She has been CEO and president of Select Energy Services Inc., a Houston-based company that provides water and chemical solutions to oil field operators in all major unconventional basins in the U.S. and Canada, since late 2017, when the company merged with Rockwater Energy Solutions Inc., where she served as president, CEO and chairman. Holli previously held senior leadership positions with Dynegy and PricewaterhouseCoopers and serves on the board of directors of Noble Energy Inc. and also on the board of Junior Achievement of Southeast Texas.

PROMOTIONS Alan Crane, Associate Professor of Finance Brian Akins was recognized with the Mackey-Simons chair for junior faculty.

Erik Dane was recognized with the Jones School Distinguished Associate Professor chair.

NEW Jaeyeon Chung, Assistant Professor of Marketing Eleanor “Nell” Putnam-Farr, Assistant Professor of Marketing Alessandro Piazza, Assistant Professor of Strategic Management Kunal Sachdeva, Assistant Professor of Finance Jonathan Miles, Lecturer in Organizational Behavior Michael Brandt, Lecturer in Finance Jeffrey Russell, Lecturer in Communication Rick Johnston, Visiting Assistant Professor in Accounting Kelly Drakey, Lecturer in Management, Accounting

AWARDS Five faculty members were recognized for excellence in teaching during Investiture. Honorees were chosen by Rice MBA alumni as well as by students from the three MBA programs.

James Weston, the Harmon Whittington Chair in Finance, received the Full-Time MBA Award for Teaching Excellence.

Prashant Kale, associate professor of strategic management, received the MBA for Professionals Evening Award for Teaching Excellence.

Alan Crane, assistant professor of finance, received the MBA for Professionals Weekend Award for Teaching Excellence.

Al Danto, lecturer in management, received the MBA for Executives Award for Teaching Excellence.

Brian Rountree, associate professor of accounting, received the Alumni Award for Teaching Excellence.

Each year, the university honors members of the Rice community who have served the students through outstanding teaching, dedication and service. Rice Business professors represented well this year.

Douglas Schuler, associate professor of business and public policy, was chosen for the Teaching Award for Excellence in Inquiry-Based Learning. The award was established to bring attention to the efforts across campus to fold inquiry and research into the curriculum; it recognizes faculty who demonstrate excellence in the use of inquiry-based learning methods in undergraduate teaching.

The Presidential Award for Mentoring went to Alex Butler, professor of finance; and Mikki Hebl, the Martha and Henry Malcolm Lovett Chair of Psychology in the School of Social Sciences. The award is given to faculty members who demonstrate a strong commitment to mentoring graduate or undergraduate students.

RETIREMENTS Associate Professor Emeritus of Marketing Randy Batsell (38 years) Mary Gibbs Jones Professor Emeritus of Management Jennifer George (19 years)

HOLLI LADHANI

Senior Lecturer in Communication David Tobin (11 years)

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American Dreamer MBA candidate Norma Torres Mendoza (Rice 2013) was named a fellow with the Paul & Daisy Soros Fellowships for New Americans, the first awarded to a Rice Business MBA. She was born in Queretaro, Mexico to a single mother who held three jobs to support her family. Norma and her mother were literally and figuratively hungry for a better life, one with an actual opportunity to escape the cycle of poverty that they were destined to experience. This ultimately led them to immigrate to Houston in the back of an 18-wheeler looking for the American Dream.

Growing up undocumented, however, Norma questioned the American Dream as she saw her Latinx friends on different trajectories.

Some did not finish high school and others saw their dreams banished in the juvenile system.

This was the impetus that led Norma to work

for change in her community. At age 19, while a student at Rice, she co-founded the Young Owls Leadership Program, a non-profit that has raised over $250,000 and helped over 400 students in the Houston area become the first ones in their families to attend college. It was through this project that she discovered her love and passion to serve as a bridge to resources for non-profits through consulting work.

Norma has consulted for numerous non-profits, businesses and governmental agencies on their vision, expansion strategy, fundraising tactics and technology integrations. She also attended the Harvard Kennedy School and received a master’s in public policy. After business school, she hopes to launch a non-profit consulting firm that will explore big questions about how to create transformative social change.

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What is The Paul & Daisy Soros Fellowships for New Americans?

It’s a graduate school program for immigrants and children of immigrants.

Selected from a pool of 1,766 applicants for their potential to make significant contributions to United States society, culture or their academic fields, the 2018 fellows are all the children of immigrants, Deferred Action for Childhood Arrival (DACA) recipients, green card holders or naturalized citizens.

In addition to receiving up to $90,000 in funding for the graduate program of their choice, the new fellows join the prestigious community of recipients from past years, which includes individuals such as former U.S. Surgeon General Vivek Murthy; Fei-Fei Li, chief scientist of artificial intelligence and machine learning at GoogleCloud; Lieutenant Governor Cyrus Habib of Washington; composer Paola Prestini; award-winning writer Kao Kalia Yang, and nearly 600 other new American leaders.

Founded by Hungarian immigrants, Daisy M. Soros and her late husband Paul Soros (1926-2013), The Paul & Daisy Soros Fellowships for New Americans program honors continuing generations of immigrant contributions to the United States. To read the full bios of the 2018 Fellows, visit www.pdsoros.org.

Pictured: team members Nadia Bollinger ’18, Abhilash Krishna ’19, David Bonem ’18, Joanna Nathan ’19 and Adrian Troemel ’18. (Not pictured: Peter Sanborn ‘19)

Adventure Capital

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Happy Dance In June, the AACSB International — The Association to Advance Collegiate Schools of Business (AACSB) — announced that the Jones Graduate School of Business extended its accreditation in business and accounting.

Achieving accreditation is a process of rigorous internal focus, engagement with an AACSB-assigned mentor and peer-reviewed evaluation. Deans from Goizueta (Emory), Foisie (Worcester Polytechnic Institute) and UC Davis Graduate School of Management visited Rice Business to conduct interviews and make the final assessment.

Every business school participates in a five-year continuous improvement peer-review to maintain high quality and extend its accreditation.

For over a century, AACSB Accreditation has been synonymous with the highest standards in business education and has been earned by only five percent of the world’s schools offering business degrees at the bachelor level or higher.

Today, 816 institutions across 53 countries and territories have earned AACSB Accreditation.

T

his past spring, Rice MBAs landed third out of 12 teams at the

Venture Capital Investment Competition (VCIC) finals at UNC, behind BYU Marriott and UC Berkeley Haas. It is the first time for the business school to place. The team competed against 60 other teams worldwide in official regionals to make it to the finals. Shout out to Rice alum, Brian Hassin (’01 BA EE, ’02 MS CS), who generously spent two days with the team at UNC as their advisor.

SPEAK EASY As keynote at a State Bar Association annual conference, Adjunct Professor in Management Terry Hemeyer covered crisis strategies and today’s most troubling challenges and vulnerabilities facing academic, organizational and student issues at law schools.

He also discussed individual and personal crisis leadership. The conference brought together deans and administrators of law schools in Texas.

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Students from 20 different Houston high schools gather on their first day of the Rice Summer Business Institute (in its 14th year). Over 90% of the students are on free and reduced lunch.

Allied Forces

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Men as Allies is the FortÊ Foundation’s Initiative designed to increase gender equality by showing men the unique challenges women face in the MBA classroom and in the business world. The new Men as Allies group at Rice Business is active and robust, including three faculty leads and participation in a panel discussion at the Women in Leadership Conference in February.

Men as Allies

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Welcome to the Class In late June, the first live session of the MBA@Rice program were held. The students in the inaugural cohort came from all over the U.S. to meet each other, learn about forming successful teams and complete their first assignment as Rice MBA students.

The hybrid delivery of the MBA degree has been a longtime goal of the university and is a novel complement to campus programs. Most significant, perhaps, is the fact that the program is reaching working professionals who would not be able to earn their Rice MBA without this option.

This first cohort is just the right mix to strengthen and deepen the programs.

Victoria Russ Hwa Hopkins, for example, is currently living in Houston but will be moving to South Korea in a few months to work on a military base as a physician. She received her B.A. and M.D. from Brown University and master’s degree in Public Health concentrating in international rural medicine from Harvard. She says she values the reputation of Rice Business and appreciates the innovation the MBA@Rice program brings to the table. (See page 20 for more on Victoria.)

MBA@RICE

BY THE NUMBERS

company. Since then, she has climbed the ranks and is one of only a few women in leadership in her workplace. Heather was drawn to Rice because of its passion for diversity. She knows being LGBT is accepted and championed here.

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STUDENTS

81

% STUDENTS FROM TX

Adam Forness is a design engineer with TechnipFMC in their Subsea Drilling Services, and his boss is enrolled in the campus program. With a growing family and long work hours, he wants to be home for his kids as much as possible.

MBA@Rice was the perfect match and his top choice.

ALSO FROM MICHIGAN, MASSACHUSETTS, OREGON AND OKLAHOMA

35

% WOMEN

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In August, Dean Rodriguez held the first ever MBA@Rice online “partio” to welcome the new students. It’s exciting to get to know these leaders and their classmates.

YEARS AVERAGE WORK EXPERIENCE

Heather Price’s path was not a traditional one. She started in a community college before attending a four-year university, and during her final year, also worked full time at her current

MBA@Rice student Adam Forness

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In June, our first cohort of Consortium Fellows gathered in Orlando, Florida for OP (orientation), their flagship event. Students met with companies and several already accepted internship offers.

Hooray! Of our 14 fellows, 13 attended. (Number 14 is a dual MD/ MBA and had exams so he will attend next year). As a school, we are honored to be the 19th business school affiliated with The Consortium and its prestigious network. It demonstrates our commitment to diversity and inclusion but also helps diverse MBA candidates discover Rice Business. This furthers the organization’s mission to increase champions for diversity and the number of underrepresented minorities in business education and leadership. Learn more: cgsm.org

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Some good to come out of the storm.

“H is for Harvey,” a children’s book illustrated by Eduardo Martinez, our graphic designer in the Rice Business marketing department. All proceeds are donated to the Houston Astros Foundation.

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INAUGURAL CONSORTIUM FELLOWS

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Leaps and Bounds - Rice Business Executive Education Open enrollment programming has increased 236% compared to this time last year and 157% compared to the same time two years ago.

Growth in custom program revenue increased 176% in one year.

Annual Custom Program Revenue

Open Enrollment Revenue YTD

Executive Education Partnership Highlights Contract with the Leadership Academy of Nepal and will be implementing our first collaborative Executive Education program in Kathmandu in late October.

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Collaboration with Hogan, the world’s leading personality assessment and leadership development organization, to coordinate an industry survey to assess best practices; generate three initial thought leadership pieces to be jointly published with Hogan and Rice faculty; integrate their assessment products into our portfolio to leverage Hogan’s reach in industry across the region; and plan a joint Hogan-Rice CHRO summit on cutting-edge leader development and employee engagement and retention practices.

Houston Education Leadership Partners offers a nine-month program for campus and district leaders through Executive Education. In the program, teachers and school and district leaders earn a business certificate, positively contributing to their leadership development.

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September 2016 Rice Business Wisdom was launched.

Let’s look at how far it has come in two years!

249 articles published

60%

of the articles are based on peer-reviewed research

5%

cartoons on research have been produced

40

of the articles are features, commentary, expert opinion and word watch

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WIN TER 2018

IA: STORMfoNgES is lifting

Houston’s

Articles have appeared in the following publications: Gray Matters (Houston Chronicle), Houstonia, Houston Public Media, LA Times, Washington Post 15

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RICE BUSINESS IN THE NEWS

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MBA Students Compete for Cash in Rapid-Pitch Contests

Shale boom is in the 3rd inning; investors to decide how game plays out

The Rice Business Plan Competition is mentioned in this article about “sharktank” like business school competitions.

Professor Bill Arnold writes about the impact of investors on the oil and gas industry.

By Kelsey Gee April 4, 2018

By Bill Arnold April 5, 2018

The Tough-to-Treat Kid

Saudi Aramco IPO appears to be a mirage in the desert — for now

Rice Business writer Jennifer Latson profiles a boy with oppositional defiant disorder and documents his family’s efforts to keep him from becoming an adult psychopath.

Professor Bill Arnold writes about the Saudi Aramco IPO.

By Bill Arnold August 27, 2018

U.S.-Russia tensions trickle down to Houston

Professor Anastasiya Zavyalova shares her insights on how tensions between the U.S. and Russia affect the workforce.

By Florian Martin March 30, 2018

By Jennifer Latson September 4, 2018

The immigrant doctors who saved Ronald Reagan’s life

Tom Kolditz, the founding Director of the Ann and John Doerr Institute for New Leaders, shares his thoughts on what having dissenters within the White House means for the president’s ability to lead.

By Tom Kolditz September 9, 2018

Professor Vikas Mittal comments on how companies may alienate key segments when they engage in corporate activism.

By Vikas Mittal, Ashwin Malshe and Shrihari Sridhar, March 26, 2018

Anonymous op-ed to fuel Trump’s volatility, paranoia and hostility

Rice Business editor Claudia Kolker explores the cost of immigration policies that would have kept out some of America’s top professionals.

The unequal effects of partisanship on brands

In the age of Amazon and Uber, more companies jump on bandwagon

Professor Scott Sonenshein comments on customer expectations and online shopping.

By Florian Martin July 12, 2018

Why we need to keep short-term insurance plans short

Professor Ken Janda discusses how allowing longer short-term insurance policies could make “real” insurance even more expensive.

By Ken Janda March 15, 2018 Is the cost of “Hamilton” worth it?

Professor Utpal Dholakia shares his insights on why people are willing to pay for high-priced items.

By Jennifer Liebrum April 26, 2018 How do you know where your donations go during disasters?

Dean Peter Rodriguez’s research on corruption is cited.

By Jasmina Keleman June 11, 2018

The things we carried during Harvey

Rice Business editor Claudia Kolker muses on the importance of the items people grab when a disaster strikes.

By Claudia Kolker May 2, 2018

By Claudia Kolker March 13, 2018

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Investors extend $550,000 during Veterans Business Battle

Winners of the annual business plan competition for veterans-turned-entrepreneurs are announced.

By Andrea Leinfelder April 18, 2018

Please stop giving absolutely everything a standing ovation

Professor Constance Porter offers her thoughts on why people give standing ovations more freely these days.

By Clifford Pugh April 4, 2018

How MBA students can get more international experience

Senior Associate Dean Barbara Ostdiek discusses Rice Business’ global experience requirements.

By Courtney Rubin April 3, 2018

Here’s how Houston graduate programs ranked on U.S. News & World Report’s 2019 lists

Rice Business’ MBA program rankings mentioned in this article about graduate programs around Houston.

By Jeff Jeffery and Jen Para, March 21, 2018

How firefighters and others take leaps of faith

Professor Erik Dane studied what makes high-risk professionals decide that their colleagues are worth trusting.

By Erik Dane August 1, 2018

Swelling clout of US corporate giants is depressing pay, analysts say

Research from Professor Gustavo Grullon mentioned.

By Sam Fleming and Brooke Fox August 15, 2018

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impressions

||||||||||||||||||||||||||||||||||||||||||||||||||||||| “ My goal is twofold.

Professionally, I would like to become involved in hospital administration to be able to effectively apply my medical training, entrepreneurial experience and newly acquired business knowledge to improve health care in a more acute and complex setting. Personally, my aspiration is to create a nonprofit organization, one that works to improve the health and better the lives of families in resource-poor communities globally.”

Victoria Russ Hwa Hopkins M.P.H., M.D. MBA@Rice

After seven years, Victoria Hopkins ’20 sold her urgent care clinic, accepted an offer with the U.S. medical staff stationed outside of Seoul, South Korea and joined the inaugural cohort of the MBA@Rice program. Born in Pusan, South Korea, Victoria came to the U.S. when she was three. Before starting medical school, she returned to work as an English teacher and discovered her Korean cultural heritage. Now she has the opportunity to share this with her husband and children when they move to South Korea this fall. “The new online MBA program at Rice allows me to learn while living abroad in Asia with my family. I couldn’t do it otherwise.” Victoria earned her B.A. and M.D. at Brown University and an M.P.H. at Harvard School of Public Health. She is one of 26 students in the new online program. Location: Moody Center for the Arts, Rice University 20 RICE BUSINESS

“ Over just one year in the MBA program, I transitioned to a new role, developed a model that is being implemented for business analytics questions within ExxonMobil, trained business analysts for the other regions of the U.S., and just recently got a promotion.

I have no doubt that the coursework and experiences at Rice contributed to both my accomplishments and promotion.”

Phil Reiser MBA for Professionals, Weekend U.S. Fuels Lead Market Analyst ExxonMobil

Phil Reiser ’19 knew since undergrad at MIT that he wanted to earn an MBA. Next, he needed to choose the right program, full time versus professional. He chose the latter because, “I wanted to have the opportunity to apply what I was learning during my coursework. Rice was the clear choice and the only one I applied to. The fact that it had a physical campus along with surging business school rankings were among my top deciders.” It also didn’t hurt that his sister was finishing up her Ph.D. in bioengineering at Rice at the time and had nothing but great things to say about the campus and culture. A left-handed pitcher and first baseman on MIT’s varsity baseball squad, Phil also majored in chemical engineering and minored in economics. The 25-year-old has been with ExxonMobil for three years. Location: Reckling Park, Rice University 21

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comic relief

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Peer-Reviewed Research Translated by Pulitzer Prize-winning Cartoonist Nick Anderson

Chasing Their Tails

Chasing Their Tails: Shi, W., Zhang, Y. A., & Hoskisson, R. E. (2017). Ripple effects of CEO awards: Investigating the acquisition activities of superstar CEOs’ competitors. Strategic Management Journal, 38(10), 2080-2102.

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Cat and Mouse Game

Cat And Mouse Game: Sinaceur, M., Adam, H., Van Kleef, G. A., & Galinsky, A. D. (2013). The advantages of being unpredictable: How emotional inconsistency extracts concessions in negotiation. Journal of Experimental Social Psychology, 49, 498-508.

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INVESTING

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PEER-REVIEWED RESEARCH

RECIPE FOR SUCCESS

Should You Invest In Index Funds Or Active Funds?

• Index funds are considered passive because they try to

match a predetermined set of stocks rather than beat the market.

• The popularity of index funds has exploded over the past 20 years, creating a rich subject for scholars and commentators.

• Risk-averse investors should lean toward index funds.

In fact, a randomly chosen index fund performs better than a randomly chosen active fund after accounting for risk.

Based on research by Alan David Crane and Kevin Crotty.

It’s easy to assume that investing, like cooking, requires skill to get the right mix of ingredients. But that’s not the case with index funds. Effort goes into building them, but these ready-made investments need minimal intervention.

Yet the outcomes are appetizing indeed.

In the past few decades, use of index funds has exploded. So have media coverage and advertisements questioning if they can truly compete with active funds. A recent study

by Alan Crane and Kevin Crotty, professors at the business school, provides a resounding “yes.” These humble investment recipes, it turns out, are richer than they might seem.

Index funds track benchmark stock indexes, from the familiar Dow Jones Industrial Average to the widely followed Standard & Poor’s 500. Like viewers following a cooking show, index fund managers buy stocks in the same companies and same proportions as those listed in a stock index. The best-known indices are traditionally based on the size of the companies.

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The idea is that the index fund’s returns will match those of its model. An S&P 500 index fund, for example, includes stocks in the same 500 major companies included in the Standard & Poor’s index, ranging from Apple to Whole Foods.

Index funds are part of the broad range of investment products called mutual funds. Like cooks making a stew, mutual fund managers add shares of various stocks into one single concoction, inviting investors to buy portions of the whole mixture.

While some mutual funds are active, meaning professional managers regularly buy and sell their assets, index funds are passive. Their managers theoretically just need to keep an eye on any changes in the index they’re copying.

Not surprisingly, active index funds tend to charge more than passive ones.

Curiously, not all index funds perform at the same level.

So what should that mean for investors? To study these variations and their implications, Crane and Crotty expand-

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ed on past research about skill and index fund management, analyzing the full cross section of funds.

This wasn’t possible to do until fairly recently: there simply weren’t enough index funds to study. The first index fund, which tracked the S&P 500, was developed by Vanguard in the 1970s. To do their research, the Rice Business scholars looked at performance information for both index and active funds, starting their sample in 1995 with 29 index funds. The sample expanded to include a total of 240 index funds, all at least two years old with at least $5 million in assets, mostly invested in common stocks. They also analyzed 1,913 actively managed funds.

Using several statistical models, Crane and Cotty found that outperformance in index-fund returns was greater than it would be by chance. The discovery suggests that passive funds, although they require little skill to run, have almost as much upside as active funds.

In fact, the professors found, the best index funds perform surprisingly closely to the best active funds, but at a lower cost to the investor. The worst active funds perform far worse than the worst index funds — even before management fees.

The findings topple the conventional wisdom that only actively managed funds stand a chance of beating the market. While active-fund managers often measure their success against that of passive funds, the data show investors who are risk averse would do better to choose passive funds over more expensive active ones.

More adventurous investors, of course, will always be tempted by what’s cooking in actively managed funds. But overall, investing in plain index funds is as good a meal at a lower price. u

See business.rice.edu/wisdom for more.

Alan D. Crane is an associate professor of finance at Rice Business. Kevin Crotty is an assistant professor of finance at Rice Business. To learn more, please see: Crane, A. D., & Crotty, K. (2016). Passive versus active fund performance: Do index funds have skill? Journal of Financial and Quantitative Analysis, 53(1), 33-64.

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The Global Experience.

The first day in RĂ­o de Janeiro, after leaving SĂŁo Paulo, Rice Business students traveled together to see Christ the Redeemer at the peak of Corcovado Mountain in the Tijuca Forest National Park. The cultural icon symbolizes Christianity and is listed as one of the New 7 Wonders of the World. It was one of many enriching visits during the global experience.

In the shadow of the statue, students gathered to experience the breathtaking views of Rio, watch the sunset and deepen their friendships.

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word watch

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Echo Chamber Why is it so convincing to repeat a claim again and again — even if it’s patently untrue?

By Jennifer Latson

H

ow do you use Head On? Apply directly to the forehead. How do you know? Because you’ve heard it a million times.

A decade ago, before viral videos were even a thing, Head On was making a mint using a marketing technique as old as advertising: repetition. More than six million tubes of the headache balm sold in less than a year (despite reports that it might not actually work), thanks to a 2006 ad campaign that simply repeated the phrase “Head On. Apply directly to the forehead,” over and over.

The marketing term “effective frequency” refers to the idea that a consumer has to see or hear an ad a number of times before its message hits home. Essentially, the more you say something, the more it sticks in — and possibly on — people’s heads. It

doesn’t even have to be true — and that’s the problem.

What advertisers call “effective frequency,” psychologists call the “illusory truth effect”: the more you hear something, the easier it is for your brain to process, which makes it feel true, regardless of its basis in fact.

“Each time, it takes fewer resources to understand,” says Lisa Fazio, a psychology professor at Vanderbilt University. “That ease of processing gives it the weight of a gut feeling.”

That feeling of truth allows misconceptions to sneak into our knowledge base, where they masquerade as facts, Fazio and her colleagues write in a 2015 journal article. (One example they give is the belief that vitamin C can prevent colds, blowing the minds of those of us who’ve taken this as

fact our entire lives, which is about how long we’ve heard it repeated.)

Even in the absence of endless repetition, we’re more likely to believe what we hear than to question it objectively, thanks to yet another psychological principle: confirmation bias.

“In general, human beings, after hearing any claim, behave like naive scientists and tend to look for information that confirms the initial conjecture,” says Ajay Kalra, a marketing professor at Rice’s Jones Graduate School of Business. “In an interesting experiment, a group of consumers were told a leather jacket (Brand A) was very good. When they later examined several brands, they tended to spend more time looking at Brand A and evaluating it more highly than other brands.”

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The same principle applies to a coffee company’s claim that its coffee is the “richest” in the world, Kalra says: It’s hard to find contradictory evidence for a statement so vague. “Confirmation bias typically applies to situations where information is ambiguous and hard to refute,” he explains.

“The more often you hear a message, the more the confirmatory bias likely comes into play.”

So it’s no wonder that many of us fall for false claims on social media, especially when we see them tweeted and retweeted again and again. And if it feels like we’re seeing more falsehoods repeated more frequently these days, we are — especially from America’s top elected official, according to the Washington Post’s Fact Checker team.

“ Don’t rely on a single source for information. Read stories from

multiple news outlets and listen to a variety of opinions. Commit to staying open-minded, and consult with friends and colleagues whose perspectives differ.

”

The social implications are huge. For example: the fear that immigration drives crime, which President Donald Trump recently stoked on Twitter. “Crime in Germany is way up,” he tweeted June 18. “Big mistake made all over Europe in allowing millions of people in who have so strongly and violently changed their culture!”

Fact checkers quickly noted that German crime rates are at their lowest level since 1992, but Trump repeated the claim the following day. “Crime in Germany is up 10% plus (officials do not want to report these crimes) since migrants were accepted. Others countries are even worse. Be smart America!” he tweeted.

What happens when a powerful person makes — and repeats — a false claim? In this case, the danger is a backlash against immigrants. But the cumulative effect of constantly repeated falsehoods is even more insidious: it undermines truth altogether, leaving public discourse unmoored from fact.

“The constant repetition of the lie is the way to make truth meaningless,” Timothy Egan writes in a New York Times op-ed. “After a while, people come to ‘believe everything and nothing, think that everything was possible and that nothing was true,’ wrote Hannah Arendt, the

German-born philosopher, in describing how truth lost its way in her native land.”

So how can we fight back? Inoculating ourselves against the power of repetition is harder than you’d think. Common sense tells us that knowing the truth should be the antidote — but that’s not enough, as Fazio and her colleagues demonstrate.

“The prevailing assumption in the literature has been that knowledge constrains this effect (i.e., repeating the statement ‘The Atlantic Ocean is the largest ocean on Earth’ will not make you believe it),” Fazio and her team wrote. “[However,] illusory truth effects occurred even when participants knew better.”

Janet Moore, director of MBA communications at Rice Business, agrees that inoculation may be impossible — but there are ways to lessen the influence of repeated claims, she says. One of the best: don’t rely on a single source for information. Read stories from multiple news outlets and listen to a variety of opinions. Commit to staying open-minded, and consult with friends and colleagues whose perspectives differ.

“Especially if you have trusted friends with different viewpoints, openly discuss the repeated story,” she says.

“Explore whether it’s really 29

worth repeating.”

And Moore, who began her career as a lawyer, says it couldn’t hurt to think like one. “Try to examine every assertion ‘on the merits,’ as is done in the legal profession,” she suggests.

Fazio’s research backs this up. Just taking a second to consider how you know something is true can stymie the effects of repetition, she’s found. “It’s a matter of getting people to consult something other than that gut feeling,” she says. “It’s a great thing to do on social media: before you share something, take that second and pause.” Otherwise, you risk becoming part of the echo chamber that keeps falsehoods circulating.

Of course, our tendency to assume that people are telling the truth is not a bad thing in and of itself, Fazio points out. “If you had to constantly verify and second-guess others, you wouldn’t get very far in terms of relationships and social order,” she says.

Until recently, American society ranked relatively high in measures of trust, Fazio says: We’ve tended to believe what we hear from institutions and the media. That trust seems to be eroding. But even a newfound skepticism of the government and the press won’t change our basic cognitive processes.

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“It’s still going to be harder to notice errors in things we hear over and over,” she says. That’s a universal human trait. Which also means it’s bipartisan — and that may at least level the playing field when it comes to fake news.

A recent study by Yale researchers finds that “[the] ‘illusory truth effect’ for fake news headlines occurs despite a low level of overall believability, and even when the stories are labeled as contested by fact checkers or are inconsistent with the reader’s political ideology.”

According to the study, even if a headline goes against your political leanings, you’re more likely to find it believable after seeing it multiple times. If nothing else, this finding may offer some consolation when we fall for falsehoods: It happens to the best of us, against both our better judgment and our own interests.

“What the research shows is that this isn’t something that just happens to stupid people,” Fazio says.

“It’s part of how our brain functions. And it happens to everyone.” u Jennifer Latson is a writer and editor at Rice Business and the author of The Boy Who Loved Too Much, a nonfiction book about a rare disorder sometimes called the opposite of autism.

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Buffalo Bayou Park, Houston 2017.

Photo by James Zhao ’15.

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FALL 2018

Houston

How We’re Doing One Year Later One year after one of the worst storms in U.S. history, The New York Times reports, “progress in Texas is unevenly distributed.” Mimi Swartz, an executive editor at Texas Monthly, also wrote in a piece for the Times, “Maybe a year isn’t enough time to make sure that everyone in need gets a FEMA check and that their homes are mold free. It’s probably not enough time for Houston to reimagine itself, either.” But we’re trying.

The following is an excerpted conversation with Peter Rodriguez, Abbey Hartgrove and Barrett Moorhouse.

Peter Rodriguez, Dean Where are we as a school one year after Hurricane Harvey?

Remarkably I would say we are exactly where I would’ve expected us to be. We’ve learned about ourselves as a community.

We care about each other beyond the work we do together. To look around the school you would not be able to tell we had that calamity a year ago. We’ve launched a new MBA program. We completed a year of classes. We went on global trips. Business as usual.

What did Hurricane Harvey tell you about the fabric of this place?

It reminded that we had leaders everywhere. People didn’t need or wait for direction. They knew how to act and what to do.

All at once, everyone was working to lift up everyone. That’s the biggest surprise about the disaster.

We were able to reach everyone so quickly through the networks we formed, even among people who had just arrived.

What have you learned personally and professionally in the year since the storm?

Personally, I think it’s a lesson in humility. We learned how vulnerable we are. You can be made nearly helpless. Acknowledging that and preparing is something we need to do upfront.

Professionally you learn — there’s a great quote by Eisenhower — “plans are useless but planning is essential.” Mostly what he meant is that you never know what’s going to happen, but you have to contemplate before something occurs and get everyone aligned behind common objectives. And he meant it’s your best defense.

With all of this, still the message is that despite our general recovery as an institution we know that

Harvey had permanent effects.

So many are still recovering.

Abbey Hartgrove, Associate Director, Global Programs Your house flooded three times in three years. What was different about the flood with Hurricane Harvey?

With each flood came its own unique challenges and difficulties that make them hard to compare.

The extreme impact that Harvey had on the majority of the Houston community brought a level of awareness that did not exist before. The support I had during Harvey went beyond my closest friends and family. I think it also illuminated what families who have flooded before have gone through, and how devastating it was that it was happening again, especially for those who thought things were getting back to normal. The awareness brought a powerful call to action that this city has needed for many years now.

What have you learned about the people that make up Rice Business?

Rice Business is home to my professional life. It hasn’t always been obvious to me that it plays a huge role in my life outside of McNair Hall. This community is part of my family and houses many of my closest friends. It was made very clear during this tragedy that this group of people is special. We have people who truly care about others and want to make a positive difference in lives other than their own. Harvey truly brought deeper meaning to “best and brightest,” a phrase we attribute to those associated with Rice Business.

What did you learn about yourself that you didn’t know before?

The sad truth of the matter is that you don’t always know how important something is to you until it’s gone. With the loss of so many items that meant the world to me, it became very clear that I had a number of sentimental objects that I never thought I wouldn’t have for a lifetime. You are reminded that ultimately things are only things, but also that items that are connected to a memory are precious and irreplaceable.

In the end, I was reminded how important it is to surround yourself with people who will support you not only in the best of times but especially in the darkest of times.

You learn that it’s okay to be sad, it’s okay to feel that loss, it’s okay to even sometimes feel defeated — but ultimately you learn that even when you feel at your lowest, you are capable of exceeding the highest expectations of yourself.

use it, and they talked to the sheriff. The sheriff said, hey man will you run this? The National Guard guys came up and handed me a cell phone with their supervisor on the line. He said he had a couple of trucks and humvees and asked if I could put them to use. I said yes. I do really well in these kinds of emergency situations. I really enjoyed being able to contribute in Harvey. [Barrett went on for two and a half days, leading a crew of soldiers from the Texas National Guard. Using the Texas Navy Facebook page — set up by civilians with boats — they staged the North Star Mall with a convoy of trucks and boats then coordinated with the Texas Navy to rescue stranded families and bus them to the nearest shelters.

He slept on the truck, ate MREs and remarked that it felt like being back in the military.]

Barrett Moorhouse Full-Time MBA 2019, Marine Corps veteran, IREP award recipient, VIBA president You were less than a month into the school year when Hurricane Harvey hit. What happened?

After helping my mom’s friend rip sheetrock out of her flooded house, I pulled up to a stoplight and saw a guy with a truck and a boat. I said, Can I come along? He said, Sure. For about a day and a half we went house to house all over Houston and Friendswood rescuing people in this guy’s 18’ boat. We tore up that boat pretty good. I see another group doing the same thing in an apartment building off I-10. The DEA, National Guard and Sheriff are helping. I walked up to see what was going on and these two junior National Guard told me they were gathering intelligence. I told them I’d been a captain in the Marine Corps. I had some mapping software on my phone and showed them how to

How did people at school find out?

I didn’t tell anyone. I was on CNN and my mom saw it and told a lot of people. As for school, there was this Rice professor and his wife who were stranded in their car. I helped get them to safety and he found out I was military and told Drew Sims ’18. I think he was the one who told people.

32 RICE BUSINESS

What did you learn about yourself that you didn’t know before?

I realized, looking back a year later, that I missed service in some form or fashion and wasn’t sure how to make that happen in my civilian life. That’s when I decided to take a leap of faith and commission with the Coast Guard Reserve. After graduation, I’ll train for a month in New London, Connecticut. In the event of another Harvey, I can request to be activated. It’s something that’s really important to me. u

Abbey Hartgrove, Barrett Moorhouse and Peter Rodriguez catch up about Harvey at Brochstein Pavilion one year later.

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FALL 2018

Shelter from the Storm Thirty-three trillion gallons of water fell during Hurricane Harvey. How did Angela Blanchard organize a shelter for thousands in a single day?

BY CLIFFORD PUGH

34 RICE BUSINESS

W With only a few months until her planned departure, Angela Blanchard was looking forward to an informal “Thank You” tour, featuring long appreciation lunches with the colleagues and friends who supported her over 30 years in community development — most recently as CEO of the Houston-based nonprofit BakerRipley.

Then Hurricane Harvey changed her plans.

On the morning of August 29, 2017, Harris County Judge Ed Emmett called Blanchard with an urgent plea. The shelter at Houston’s George R. Brown Convention Center was filled past capacity with residents who’d been forced out of their homes by the hurricane. Another mass shelter needed to be opened immediately. Frustrated by the slow progress of FEMA and the Red Cross, Emmett turned to Blanchard and her staff to get a shelter open at NRG Center.

BakerRipley (formerly Neighborhood Centers) has a long history of helping people recover from disasters. It handled 27,000 new cases after Hurricane Katrina flooded New Orleans in 2005, when evacuees from that city sought safe haven in Houston. But the nonprofit had never managed a shelter of this magnitude — much less have one open and functioning in a few hours.

A friend warned Blanchard she’d be crazy to take on the task, because if things went badly, she would get the blame.

But Blanchard, who had helped open George R. Brown to Hurricane Katrina evacuees — along with assisting in long term recovery after floods and fires devastated Australia and visiting shelters for Syrian refugees in Germany — was confident that her team could pull it off.

Still, as the first buses rolled up, just hours after her conversation with Emmett, who was standing by to welcome the evacuees, she thought to herself, “Please, God, let this work as well as we think it will.”

It did. The shelter took in 850 people within the first 60 minutes. For the next month, 8,500 people from 111 cities in southeast Texas and Louisiana called NRG their temporary home.

“They set up a shelter that I really believe is the model the world is going to use,” Emmett says.

35

How did they pull it off? Blanchard believes that having a strong staff with varied talents to draw upon, along with a willingness to improvise, was instrumental. So were the trusting relationships she’d built long before the storm. “A key ingredient was that I trusted Ed. I knew that he wasn’t going to hang me out to dry. I could throw everything I had at it, knowing that we had shared intentions,” she says.

Emmett’s wife, Gwen, is on the board of BakerRipley and is now its chair, so he was familiar with the nonprofit’s work, although he had only known Blanchard for two years. “Your job in the middle of a crisis is to get through the crisis,” Emmett says. “I was confident [Blanchard] was the right person and that organization was the right organization.”

Likewise, BakerRipley had resources Blanchard could rely on in a pinch. “We knew we could call on H-E-B, Chevron and Shell to help, and they did come, along with many others.” she says. “They had worked with us before and they knew what we were doing would be well run. That mutual understanding of capacity and strength was important.”

In a time of crisis, an effective leader is one who gets people to put the welfare of others over their own selfinterest, says D. Brent Smith, senior associate dean for executive education and associate professor of management and behavior at the Jones Graduate School of Business at Rice University.

“Good crisis leaders, whether they’re in the military or a corporation or a community organization, are good at getting people to identify personally with them and have trust in the agenda that they’re promoting at the time,” Smith says. “They can get someone to set aside their self-interest for that moment.”

“Obviously, the other attribute that I’m sure assisted Angela is the network of resources and relationships that she has accumulated over time,” Smith adds. “Her social capital was absolutely immense. I guess that’s why Emmett called her.”

When Emmett called, Blanchard happened to be on another line with the BakerRipley executive team, assessing the condition of the nonprofit’s various centers. Everyone was working from home, since much of Houston remained underwater.

But when Emmett’s call came, they immediately sprang into action. Former Houston Mayor Annise Parker, an executive vice president of BakerRipley at the time, swung by to pick up Blanchard and they made their way to NRG, where they were joined by the other team members who were able to get there. Those who couldn’t make it worked the phones from their homes to get needed supplies.

FALL 2018

distinctly, painfully, after Katrina when people were mistaken“Ilyremember referred to as ‘refugees’ or ‘survivors,’”she says.“These are, in fact, our neighbors. Your neighbors. Mine. And for the time of the shelter, they were guests. I think that terminology matters. Words matter.

”

“In every organization, you have your thinkers and your planners. You have people who are more deliberative and more reflective. They are vital to any organization.

If you don’t have them, you’re rudderless,” Blanchard says. “But you also have those people who will run toward the fire or stay at the hurricane. You have to know who they are because you can drop them into any chaotic situation and they can figure out how to act and how to create some order and response out of it.”

Oriana Garcia, now BakerRipley’s chief of staff, was a prime example, Blanchard says.

“I knew Oriana had experience running really large community events for BakerRipley. She was indispensable when it came to laying out the shelter — all the elements of support. And she was willing.”

People came running toward the fire — or in this case, the flood — from multiple organizations. NRG staff helped Blanchard’s team sketch out a basic layout of the facility, arranging the space to include a welcome check-in area, dormitories (separate areas for single women, seniors, families and single men), a kitchen commissary, a lounge area, a dispensary for clothes and toiletries, and a medical care area, as well as a command center away from the main floor. The plan also included a children’s play site and a pet area, as residents are sometimes reluctant to leave a disaster unless they can bring their pets along. The City of Houston Bureau of Animal Control (BARC) set up cages and Barrio Dogs provided volunteers.

But when Emmett gave them an estimate of how many evacuees to expect, Blanchard realized she still needed more volunteers to get the shelter open.

“I walked into the room and said, ‘I need every single person that’s here to find three more people like you. Call anyone like you,’ ” she recalls. (This turned out not to be a problem. Before long, so many volunteers showed up that they had to be turned away because they outnumbered the residents of the shelter.)

By late afternoon, the shelter was ready to open — except for one major problem. There were no cots. FEMA had promised to supply them, but said they had no drivers to

Angela Blanchard and former Mayor Annise Parker (Rice ‘78) problem solve during Harvey.

deliver them. So Blanchard and her team got on their phones and called everyone they knew who could possibly help. Aztec Rental came to the rescue, sending over an 18-wheeler full of cots. “They drove into the back bay of NRG, and by that time, we had enough volunteers to unload the cots,” Blanchard says.

The NRG shelter was no Ritz-Carlton, but Blanchard made it clear from the beginning that everyone who came to stay would be referred to as “guests” or “neighbors.” “I remember distinctly, painfully, after Katrina when people were mistakenly referred to as ‘refugees’ or ‘survivors,’ ” she says. “These are, in fact, our neighbors. Your neighbors.

Mine. And for the time of the shelter, they were guests.

I think that terminology matters. Words matter.”

Blanchard’s respectful tone permeated the entire operation, recalls Annise Parker. “The one thing that Angela said that resonated all the way through was that these are not your poor evacuees. They should be treated like guests, and that’s going to be our attitude. We’re not doing you a favor.

We’re partners in this,” Parker says. “That makes a huge difference in how they feel coming into the shelter and it set the tone for the thousands of volunteers. That was 100 percent Angela. I was astounded by how much of a difference it makes.”

As the first buses began pulling up after 9 p.m., guests found the set-up much like a hotel. After going through

36 RICE BUSINESS

security, arrivals were each met with a hug from a volunteer, who took information and then escorted them to a cot that became their “room” during their stay. More than a third of those who checked in had a medical concern, so they were escorted to the clinic and also to the dispensary for supplies.

By 2 a.m., things had settled down, but Blanchard and her team had another crisis: Where was the food to feed the arrivals when they woke up?

An initial supplier couldn’t make it because of high floodwaters, so the NRG employees pulled out all the food they had, like breakfast bars and packaged snacks. BakerRipley staff began sending out calls for help to companies via Facebook and Twitter.

“The next morning I was staggering around like a zombie and I see [H-E-B Houston president] Scott McClelland walking down this massive hallway. And I knew it was going to be alright,” Blanchard recalls. “I’m always glad to see Scott, but this time, I truly was.”

For the first 38 hours, Blanchard, Parker, and BakerRipley executive vice president Claudia Aguirre (who succeeded Blanchard as the nonprofit’s president and CEO) were constantly monitoring the shelter, with occasional naps. “Until we could get enough people organized into shifts, we didn’t want anything to go wrong,” Blanchard says.

Then, for the next 26 days, until the shelter closed on September 23, Parker and Aguirre co-managed the shelter, each working overlapping 18-hour shifts, with Parker as daytime manager and Aguirre as nighttime manager.

“We had lots and lots of agencies working with us, but decisions were made very quickly,” Parker says. “We had very clear lines of command and a lot of folks with a lot of operational experience on the ground from the beginning.”

The staff and volunteers all wore BakerRipley T-shirts, but Parker soon discovered that visiting police units had trouble figuring out who was in charge. So on the second day, she went home and pulled out one of the polo shirts emblazoned with her name from when she was mayor. She noticed that when she wore it, she commanded more respect.

“That little bit of authority made a huge difference,” Parker says. “In essence, for 30 days we had a small city set up.

The only difference in running the city of Houston and [the shelter] is I didn’t have to provide three meals a day for the city of Houston. But you have the same issues, and the most important are safety and public health.”

Blanchard finally did retire from BakerRipley at the end of last year. But she’ll continue to make disaster assistance her life’s work because, she says, the disasters are only getting worse — and more frequent.

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As the shelter population dwindled down after Hurricane Harvey, the nonprofit switched to long-term recovery efforts. Over the past 11 months, BakerRipley has worked with more than 5,500 households and distributed more than $5.2 million in financial assistance for furniture and appliance replacement, emergency and temporary housing, work-related expenses and medical bills. More than 16,000 households have been helped at the nonprofit’s six Neighborhood Restoration Centers through partnerships with the City of Houston and Harris County.

“We have people out here that are still coming in because they cannot make their way through the convoluted bureaucracies,” Blanchard says. Among them is Houston resident Chanel Caston. After the roof of her southwest Houston apartment caved in, soaking all her possessions, Caston made her way to the NRG shelter with her husband and two children, one of whom has autism. “We didn’t have nothing; only the clothes on our back,” she recalls.

They spent most weekdays at the shelter until it closed, leaving on weekends to be with Caston’s mother at a senior citizen’s facility. “Our condition [at the shelter] was A-1 to me,” Caston says. “It’s nothing like home, but due to the circumstances it was wonderful.”

Now she faces a new set of problems because her housing assistance ran out in July and she pays $975 in rent for a one-bedroom apartment to house her family of four. She travels to several food banks to feed the family and is working with a case manager at BakerRipley to secure other basic needs. “[Harvey] left me in a predicament,” Caston says. “We’re still trying to get back on our feet.”

But Caston has hope for the future. So does Blanchard. Her experience during Harvey taught her that leaders are not always in front — and that moments of crisis tend to bring out the best in most people.

“There’s no joy in the devastation of a hurricane. It’s heartbreaking,” she says. “But there’s an extraordinary satisfaction that happens after disasters — the pure pleasure of working with people when the mission is compelling, the urgency is clear, and you do whatever it takes. And it’s encouraging to see everyone doing all they can to help one another. The generosity of the human spirit.” u Clifford Pugh is a longtime Houston journalist who worked as lifestyle reporter and style critic at the Houston Post and Houston Chronicle and co-founded CultureMap, where he served as editor-in-chief. His freelance work appears in Houstonia, PaperCity, the Houston Chronicle, and Rice Business Wisdom.

He is a graduate of Rhodes College and the University of Missouri, where he received a master’s degree in journalism.

FALL 2018

STOCKING UP How rescue and relief workers are drawing on the lessons learned from Hurricane Harvey to prepare for the next big disaster. By Tracy L. Barnett

I

t was the relief effort watched around the world. As big as Hurricane Harvey was, the human spirit of Houston was bigger: A Texas-sized show of solidarity came through in the aftermath of the hurricane. The number of neighbors helping neighbors — in kayaks, in motorboats, in pickup trucks, in human chains — seemed to break all past records.

And yet gaping holes in the social fabric still affect the daily lives of thousands of people. A year later, nonprofits and grassroots disaster-relief organizations are trying to patch these holes while they prepare for the next disaster — because at this point, Houston has accepted that it’s not “if,” it’s “when.”

Some grassroots groups coalesced spontaneously during Harvey, after Houston’s institutional response became bogged down by the storm’s magnitude.

When the streets around the Houston Food Bank flooded, groups like the Midtown Kitchen Collective and the Giving Hub worked to fill the food-delivery vacuum. DIY rescue and relief groups including Recovery Houston and the Cajun Navy operated around the clock without pay, relying on social media networks, fast-paced innovation and pure grit. Meanwhile cash-strapped community organizations like Casa Juan Diego, Boat People SOS Houston and the Texas Environmental Justice Advocacy Services (TEJAS) depended on an influx of volunteers who helped pick up the slack during the storm.

Event planner Kat Creech,

who started the Facebook group that became Recovery Houston, marveled at the number of hearts and hands working to help in the days after the storm. As the year wore on and relief efforts turned to rebuilding, however, the numbers dwindled. Creech blames compassion fatigue — and what she calls “survival fatigue.”

“These people are doing everything they can to keep putting one foot in front of another as the rest of the world has gone back to normal,” she says.

Dr. Betsy Escobar, who volunteers at Casa Juan Diego — a Catholic charity that serves immigrants, refugees and the poor — said the center was overrun after Harvey by immigrants who feared detention by Immigration and Customs Enforcement if they went to shelters or the convention center. “FEMA gave us a bunch of cookies, but we have a lot of people who are diabetic so that was not very helpful,” she recalls. Thankfully, the Houston Farmers Market came through with produce, rice and beans.

Their next problem was the opposite: they suddenly started getting more help than they could handle.

“We got a mountain of clothes, and that’s nice — but we were a little overwhelmed because it was too much,” Escobar says.

This feast-or-famine problem was not exclusive to Casa Juan Diego, according to Balaji Koka, associate professor of strategic management at the Jones Graduate School of Business at Rice University. On the one hand, Koka witnessed a highly effective response by individuals and small organizations in his area. On the

other hand, there were significant gaps in service, something that could be addressed by better coordination among city and county organizations, he said.

“Social media definitely enabled people to become a community with some amount of organization and coordination without any hierarchy,” Koka observed. “But sometimes the same lack of hierarchy would result in one house affected by the disaster being visited by three or four different volunteers, while another house would get lost in the shuffle.”

Rice Business Wisdom surveyed seven community leaders who were involved in Hurricane Harvey rescue, relief and recovery efforts. Here, we distill their collective wisdom about how to maximize our effectiveness in the next big storm.

BEFORE THE STORM Should I buy a boat or a truck so I can escape or rescue people?

The consensus on this one is a definite NO. Unless you’re an experienced boater with training in navigating floodwaters, you

38 RICE BUSINESS

can quickly become a liability, according to Captain Taylor Fontenot with the Cajun Navy.

Instead, find people in your neighborhood who do have boats and trucks and are willing to use them or volunteer them for the rescue efforts, recommended Jonathan Beitler, a volunteer with the ad hoc Midtown Kitchen Collective. In the desperate days after Harvey, the Midtown Kitchen Collective developed ihavefoodineedfood.com, a platform that helped coordinate many of the 300,000 meals distributed by the group, linking thousands of people eager to donate food with the volunteer chefs and service organizations who needed that food. A similar platform could easily be developed to coordinate and connect people who have boats and trucks with people who need them, Beitler said.

Should I stock up on extra canned goods and water so I can have them on hand when the storm hits?

By all means stock up,

but be sure you are getting the right things when it comes to giving. The Houston Food Bank is already in preparation mode for this year’s hurricane season, assembling 25,000 disaster boxes of shelf-stable food to have on hand in the event of a mass emergency, said communications director Adele Brady.

Lessons learned from last year’s disastrous flooding of the streets around the food bank: The organization is moving towards a hub-and-spokes delivery model, moving resources out to collaborating service centers throughout the city.

What else should I do to prepare?

Take care of yourself and your family first. That way you can be prepared to step in and help with others. Locate your closest shelter and get to know the evacuation route. Have your essentials packed just in case: all family members’ identification, medical records, prescriptions. Pack a “first-day kit” with all the water, food, medicine and anything else you need to

survive for a couple of days. Fill your gas tank.

And don’t wait until a hurricane is on the horizon to offer your assistance. Thousands of people still lack adequate housing, furniture, trauma counseling, and other essential needs after Hurricane Harvey. Scores of local organizations are engaged in ongoing recovery efforts, and will be for some time — and they need help.

WHEN DISASTER STRIKES What if I don’t want to evacuate?

Mandatory evacuation is serious, says Fontenot with the Cajun Navy. He and his crew spent valuable hours going back every day to check on people who weren’t ready to leave — time that could have been spent rescuing others. Be aware of what’s going on around you and follow the protocols, he urges.

And be aware that others in your midst might not understand what’s going on — because of language and cultural barriers or disabilities — and that they 39

may be in need of individual help, advised Jannette Diep of Boat People SOS Houston, which has been serving the Vietnamese community of Houston since 1999.

An estimated 120,000 Vietnamese immigrants live in the greater Houston area, plus thousands more Southeast Asians of different ethnicities. “These people come from war-torn countries and they’ve already been displaced; they’re afraid of being displaced again,” Diep cautions.

Others aren’t aware of the massive chemical discharges that can and did occur in the industrial corridor of East Houston, said Bryan Parras, director of the Texas Sierra Club and organizer of the People’s Tribunal on Hurricane Harvey Recovery. Or in many cases, they are aware, but they have nowhere else to go. He, like many of his neighbors, suffers from skin rashes and respiratory problems, collateral damage from petrochemical spills.

What should I donate?

Most organizations, like the Houston Food Bank, Juan Diego House and Boat People SOS Houston, will be posting lists of what they need on Facebook or their websites. Check those first.

“When you hear the media talk about how people have lost everything … people inherently start literally bringing everything,” said Creech. “That is wrong in epic proportions — because then you need a warehouse to sort things and hundreds of volunteers to do the sorting. People in a shelter don’t want your dress slacks, they don’t want your stuffed animals, they don’t want

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your old ceiling fan.”

For those who are in shelters, provide the basics: dry goods, tuna, water, toothpaste and toothbrushes, comfortable clothes, clean socks and underwear. It’s helpful for clothes to be clearly labeled for gender and size for fast processing.

If you’d like to donate used goods to help families with longterm recovery needs, do it during the year, not during the disaster, and give to an establishment that has a warehouse and a staff set up to process and distribute it.

Organizations like Helping Hands, the Houston Furniture Bank, and Star of Hope take donated items for distribution among the needy.

The city of Houston’s Reuse Warehouse and the Habitat for Humanity ReStore accept reusable building materials and other items that can be used in reconstruction efforts. Some agencies even offer pickup services.

For the civilian rescue crews, bear in mind that they are risking their lives and in many cases their daily bread to save others.

Rather than giving your money to big international nonprofits, give directly to the people you see doing the work on the front lines, says Fontenot. They’ll take cash anytime, as well as food, fuel and water during the disaster.

“If that stuff is handled, we can just stay in the water and keep working,” he says. u Tracy L. Barnett is an independent writer based in Guadalajara. She aspires to a zero-waste lifestyle but hasn’t yet found a substitute for Rancheritos.

V2C2: The Next Chapter

BY RYAN KIRKSEY ’13

From creating an innovation district and online degree to enrolling immigrant, refugee and DACA students, Rice broadens its foundation of intellectual curiosity, community and access to high-quality education.

W

hen President David Leebron first came to Rice in 2004, it marked the beginning of a period of transformation at the university. Within a year the faculty, students, staff and alumni were engaged in conversations about the priorities for the future, and in 2006, the Board of Trustees adopted a 10-point strategic vision. It was called the Vision for the Second Century — V2C for short — and it ushered in a new era of growth for Rice’s facilities, enrollment, and the number of opportunities students can take advantage of.

Hello, V2C2 Released in early 2018, the Vision for the Second Century, Second Decade builds on the physical and reputational growth of V2C even more

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Several of these goals center around Rice’s core values: building strong foundations for students, faculty, staff and research achievement.

But what makes V2C2 different is how and why Rice will go beyond the hedges.

substantially. V2C2 represents the university’s most ambitious attempt in its history to expand its footprint locally, nationally and internationally.

This strategic plan focuses on seven key goals that will define the next decade of Rice’s evolution.

1. Provide Transformative Undergraduate Education 2. Build Renowned Graduate Programs 3. Invest in Faculty to Achieve Preeminence 4. Expand Access, Diversity, and Inclusiveness 5. Elevate Research Achievement and Reputation 6. Extend Rice’s Reach and Impact 7. Engage Houston and Empower its Success

Starting Now For Rice’s leaders, it wasn’t enough to collaborate only occasionally with other Houston entities to drive the city’s success. The university recently worked with city officials — along with the Greater Houston Partnership, the Texas Medical Center, Station Houston and Houston Exponentia — to transform a nineacre section of Midtown into an innovation district designed to bring together the area’s entrepreneurial, corporate and academic communities. The goal is to create an innovation center that rivals those found on the East and West Coasts. Over the next two-plus years, Rice will attract talent and support all stages of the innovation life cycle through incubators and accelerators, classroom and event space, technology, networking opportunities and entrepreneurship support and training.

Rice is also committed to making its voice heard in the national conversation about immigration.

Houston has the third largest population of foreign-born residents in the United States and has accepted more refugees than any other city.

Texas has the second largest number of DACA-eligible individuals in the country. President Leebron wrote that “our primary mission is the education of people to help them realize their ambitions and potential, and to make the greatest contribution they can to our city, country and world.

We seek to extend that mission to all highly talented students, regardless of national origin. These values will continue to guide us as we seek to support DACA and other resident immigrant students during these difficult times.”

What’s Next In the last five years, Rice has placed a larger emphasis on digital education. Rice’s partnerships with Coursera, OpenStax, 2U and others were merely first steps towards a 41

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broader digital footprint that positions Rice to anyone, anywhere.

The university will continue to pursue this digital growth and employ technology to enhance opportunities for students on the Rice campus, to vastly increase its educational reach and global footprint, to engage and support its alumni, and to augment its resources. Rice Business is at the forefront of this initiative. Having just launched the first hybrid online degree, the business school accepted its first cohort of 26 into MBA@ Rice, offering its world-class MBA to professionals with the same standards of admission, the same tuition and the same rigorous content as the on-campus degree program.

Rice also believes that all talent deserves opportunity. The university has a long history of affordability and meeting all demonstrated need. With the support of alumni and friends, Rice will make an even bolder commitment to supporting undergraduates by reducing student and parent contributions so that more low-income and middle class families can chart their futures at Rice.

In its approach and delivery, V2C2 illustrates Rice’s driving ambition to contribute to the world and invest in its students. But the world is changing at an accelerated pace, and academic institutions need to be ready. V2C2 will guide Rice through the next decade, anticipating and evolving as it seeks to educate, improve and sustain its community inside and outside the hedges.

For more information about V2C2, see v2c2.rice.edu. u Ryan Kirksey is senior assistant to the president at Rice University. He earned his MBA at Rice while working as director of operations and finance at the Baker Institute for Public Policy.

Well-Being A modern CEO merges equal parts successful innovator and servant leader

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A

B Y

A N N E

B A G A M E R Y

As a girl growing up in Southern California in the 1980s, Asma Ishaq often attended nutrition-industry trade fairs with her father, a biochemist who founded and ran his own supplements company with help from her and her brothers.

Today Asma attends the same trade fairs, but as a company chief – and over the years she has frequently come home with industry awards for product excellence or innovation.

“Those are real ‘pinch me, I’m dreaming’ moments,” she said.

Asma, 42, is chief executive officer of Modere Inc., a global, multi-hundred million-dollar company that produces dietary supplements, household and personal-care products and markets them through the direct selling distribution channel.

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“”

The pressure to scale is always there,” she said, adding with a laugh: “I just practiced saying ‘no.’

T

he role, which she has held since January, is the latest in a professional journey that has taken her from premed studies at UC Berkeley to an MBA from Rice in 2002, and from office-product sales in the Bay Area to finance at BlackRock in New York and to product development at a biotech firm.

She says she never lost sight of her ultimate goals: to be an entrepreneur and to run her business with an eye to doing good in addition to doing well.

Through creating her first company, Jusuru International, in 2009 and merging it with Modere in 2017, Asma has become a leader in the field of nutraceuticals — wellness products that combine natural ingredients with pharmaceutical elements, like collagen and hyaluronic acid, to promote beauty and health.

Along the way, she has played a leading role in setting industry standards both in products and in practices, and served as a mentor and model for women at all levels of business.

“I want to give people, especially women, more chances,” Asma said during a recent interview from her office at Modere headquar-

ters in Springville, Utah. “I never started out thinking, ‘I need to be a CEO.’ I had simple but meaningful goals: take my daughter to school every day, be able to pay for college. So I really understand that success means different things to different people.”

Those who know her are not surprised at her achievements, nor that she is modest about them.

“She sets the bar for integrity and thought leadership,” said Ivan Wasserman, a partner in the law firm Amin Talati Upadhye in Chicago, who has worked with Asma on industry policy and standards.

“She is not driven by ego — titles, money, achievement of goals — but by bringing out the best in people,” said Michael Hannigan, president and co-founder of Give Something Back Workplace Solutions in Oakland, California, a certified B Corporation which uses the power of business to solve social and environmental problems.

Asma credits her upbringing in an entrepreneurial family with giving her a clear-eyed view of what it takes to run a business. “My brothers and I did everything, from working

on the product line and packing boxes to answering phones,” she said.

Although she went off to Berkeley with a T-shirt that said “Surgeon” on the front, Asma took a summer job at Give Something Back and discovered that her true vocation was in a company that valued the “triple bottom line” — sales, profits and investment in the community.

“At the end of my interview, I knew I wanted to learn from them and said: ‘I’ll work at anything.

I just want to be here,’” she recalled.

She joined the company after graduation in 1997 and moved up the ranks in sales.

“Everything she did for us, she did extremely well,” said Sean Marx, co-founder of Give Something Back. “But she also got the whole concept of the ‘servant leader’ — that your success is directly connected to the success of those around you.”

Marriage, motherhood and a move to New York followed. In 2000, when her then-husband needed to move to Houston for work, she enrolled at Rice as a Ben F. Love scholar to build her skills.

“She was concerned

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about the finance, since that wasn’t her background,” recalled Sanjay Sood, a marketing professor who now teaches at UCLA Anderson School of Management.

“She dug in and actually majored in finance as well as marketing.”

Sood recalls those years as exciting ones for the Jones School. A new dean, Gil Whitaker (Rice ’53), had arrived from the University of Michigan in 1998 with ambitions to move Rice up in the rankings.

“It was still a very small MBA program, so everyone knew everyone else,” Sood said. “But you could feel the positive momentum.”

Students felt it, too.

“Jones was relatively young and aspirational, and we thought, we can make it our own,” said Sean Ferguson, who was a year ahead of Asma and worked with her in the Graduate Students Association on diversity issues.

“Entrepreneurs don’t always buy into the status quo,” said Ferguson, now associate dean and director of the MBA program at the Asia Business School in Kuala Lumpur. “She’s skeptical and critical, but in a positive, constructive way — looking to make things better. And

nutrition industry is “ The self-regulated, so it’s really important to be an advocate for best practices, to protect the industry from bad players,” she said. “With direct selling, which is shifting toward adopting self-regulatory concepts, it’s an exciting time.

Our model — company success derived from customer success — is powerful, but it needs to be done right.

”

she was always willing to roll up her sleeves and work.”

For her part, Asma “just fell in love with Rice,” she said. “It was such a closeknit community of students and professors. We developed real bonds.”

A few years at BlackRock in New York followed graduation from Rice. But she found herself yearning to start her own business, for professional as well as personal reasons: Her marriage had ended, and she needed more autonomy to balance work and single motherhood.

Leaning on her background in nutritional supplements and spying an opportunity in the emerging field of nutraceuticals, she joined a company called BioCell Technology before founding Jusuru in 2009.

Jusuru, she said, was “a case study in pure sweat equity,” and in keeping a close eye on costs to be able to grow without needing outside capital. A crucial lesson, which she learned by asking other CEOs, was not to grow beyond your means or expand internationally too soon.

“The pressure to scale is always there,” she said, adding with a laugh: “I just practiced saying ‘no.’”

Merging with Modere was the opportunity she was looking for to gain global exposure, especially in Japan, where consumers are sophisticated about nutraceutical products. “Modere was in Japan and other markets as well,” she said. “It was a good match of complementary business skills.”

Modere markets itself 45

as a “healthy, safe and clean-lifestyle brand,” according to its website, and as CEO it is her job to make sure that it lives up to that promise, both in its products and in its practices.

“People want to know that what they are using, and selling, is safe and responsibly produced,” said Farah Ahmed, president and CEO of the Fragrance Creators Association, an industry group, and formerly a lawyer with the U.S. Food and Drug Administration.

Asma acknowledges the challenge. “The nutrition industry is self-regulated, so it’s really important to be an advocate for best practices, to protect the industry from bad players,” she said.

“With direct selling, which is shifting toward adopting self-regulatory concepts, it’s

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an exciting time. Our model — company success derived from customer success — is powerful, but it needs to be done right.”

Those who know her give her every chance of success.

“A lot of companies in that industry are not managed according to best practices,” said Len Monheit, managing partner of Trust Transparency Center, a consultancy that works with industry groups. “Doing that well is a differentiator. She is doing it well.” u Anne Bagamery is a journalist based in Paris. She formerly was with Forbes Magazine in Houston and a senior editor at the International Herald Tribune / International New York Times. This is her first article for Rice Business.

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Object of My Affection What happens when a brand we know (or think we know) and love turns out to be something altogether different?

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

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

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

Many of us were shocked when Volkswagen’s “clean diesel” technology turned out to be mere smoke and mirrors — and when the CEO of Audi, Volkswagen’s parent compa-

47

ny, was arrested in June, it drove home the disconnect between the brand’s reputation and reality.

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

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later earned back the lost love of some consumers with an ad featuring civil rights activist and former San Fransisco 49ers quarterback Colin Kaepernick — although the campaign alienated others.)

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

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

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

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

“The reason Cosby’s conviction is so notable is that it highlights the disconnect between his brand

image and reality.

The funny, casual Cosby isn’t real. It is an image that he created,” Calkins writes.

But the image that good branding creates becomes so firmly embedded in people’s minds that it’s virtually impossible to shake, says Utpal Dholakia, a marketing professor at Rice University’s Jones Graduate School of Business.

Even revelations of hypocrisy by a brand behemoth like Nike — in the form of marginalizing female employees while pouring millions into messaging that empowers female athletes — aren’t enough to knock it off its pedestal.

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

That’s why we spend

so much money on advertising and establishing brand messaging.”

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

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

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

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

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

“As a cultural selfobject, Cosby’s acts of violence against individual women were also a betrayal for all those who built a part of themselves in response to the values he mirrored back to them,” Scarsella explains. “Because cultural selfobjects shape who we

are, this betrayal and loss is profound. It results in a loss of a part of our own selves.”

The revelations that Nike executives mistreated female employees, however, don’t seem to have evoked a similarly profound sense of loss.

In fact, according to YouGov BrandIndex, a service that tracks the public’s perception of brands, Nike experienced a sharp but short-lived drop in consumer perception just after stories emerged about its toxic workplace — and has since rebounded to its previous levels.

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

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

But good branding has its limits, as Cosby’s fall from grace reveals. Individual reputations are easier to tarnish than the multifaceted brand identities.

Nike’s reputation doesn’t hinge entirely on empowering women, after all. But when your brand rests exclusively on being America’s Dad, it’s impossible to recover from the damage of doing something egregiously un-dad-like, Dholakia says.

“Once your reputation gets hurt, it’s hurt. That’s all Cosby has: his reputation,” he says.

“It’s not a brand that has many offshoots.”

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

Starbucks offers the latest example. In April, two black men were arrested at a Philadelphia Starbucks store

49

after an employee called the police because they used the bathroom without buying anything. For a company that has worked for years to build a reputation as “an inclusive, progressive, forward-thinking beacon of a brand,” the incident could have dealt a devastating blow, Davis wrote in an essay for Forbes.

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

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

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

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

“People are not all that forgiving of individuals,” he says.

“But brands are powerful. People are extremely loyal to brands.” u Jennifer Latson is a writer and editor at Rice Business and the author of The Boy Who Loved Too Much, a nonfiction book about a rare disorder called Williams syndrome.

Leadership at Large Building leadership and team coaching into the curriculum

(L to R) Scott Gale EMBA ’19, Frank Cottrell PMBA ’18, Elena Engles FT ’18, Adrienne Mangual EMBA ’19, John Joswiak PMBA ’18, Alan Becerril EMBA ’19

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Michelle Kaltenbach has her fingers in just about everything that has to do with MBA student development. Lately, leadership programming and MBA team coaching top the list.

As associate director of student development, she collaborated with Professor Brent Smith to build leadership and team coaching into the curriculum beyond the classroom. The following is an excerpted interview with Michelle. > What does leadership and team coaching look like at Rice Business today?

It’s a course and a philosophy. Because we’re dedicated to developing leaders, rather than just offering a collection of courses, we see the MBA as an immersive leader development experience.

The structure of this leadership program is meant to create an environment where your performance is dependent, partially, on your ability to function effectively in teams.

How does it work exactly?

We place an emphasis on the team experience from the very beginning, so every first-year team has a dedicated and trained student coach to help with the transition to business school and provide the support needed to succeed. By your second year, you have the opportunity to become a team coach through the Leadership and Team Coaching course, which requires an application and a full year commitment. The skills you learn — like conflict resolution, commitment, support, trust, observation, communication — will enhance your professional and personal lives.

Why is this important to the school and the MBA program?

Because the leadership and team coaching program prepares students to be more proficient at the most essential component of effective leadership: the ability to develop individuals and teams.

It’s our belief that the fundamental role of leadership is to get the best performance out of people. This requires a constant focus on individual and team development.

Why is this important to organizations?

Organizations place a premium on leaders who are effective coaches. It is the one leadership attribute that is critical across all levels of leadership and grows increasingly important as you rise through the ranks. Whether we are addressing underperformance, rapidly preparing a high-potential for greater responsibility or giving our employees the opportunity to be successful after a major organizational transformation, coaching is the essential ingredient.

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Tell me about the course?

MGMT 774 Leadership and Team Coaching is for full-time and professional MBA students. (EMBAs receive executive coaching.) It teaches the foundational skills for effective coaching to build on throughout their careers. In this course students reflect on their own team experiences from their first year as an MBA. They learn how to recognize team turmoil and skills in providing and receiving feedback. This course also allows students to actively practice their coaching skills in preparation for their year of coaching with their teams. Although it’s completed during the summer, the learning is continuous throughout the entire year. The peer coaches form a network where they share their observations and gain experience that will help make them more marketable and better managers when they graduate.

Where does the peer coaching come in?

Peer coaching plays an ongoing role in the student’s growth throughout the two years. The current peer-coaching program — where second-year students assist first-year students in acclimating to the program and to being part of a successful team — has proven to be highly effective. Coaches work with new students from day one, meeting them during their first week on campus to help develop the structure of their team charters that will serve to guide the team for the next two years. Coaches are also resources and mentors by providing continuous feedback during and in between meetings. They also provide career and programmatic advice and tips. During the second semester, teams are asked to provide 360 reviews as an opportunity to reflect on the fall team experience.

Coaches are a key part of this process and help facilitate communication and feedback, while encouraging team growth and leadership.

What else?

Rice Business views leadership as contextual. Every student has different aspirations. Leadership at a large multinational company, for instance, differs significantly from leadership at a startup. Rather than base the leadership program on a one-size-fitsall definition, we teach students how to build their own definitions in the real world. u

Congratulations to all Alumni Award Winners The Industry Excellence Awards recognize alumni for excelling in their careers in four fields: health care, real estate, consulting and entrepreneurship. These alumni embody the four pillars of Rice Business alumni engagement: community, philanthropy, volunteering and lifelong learning.

INDUSTRY EXCELLENCE IN HEALTH CARE AWARD Presented by Dr. Anita Ying, EMBA ’13, Executive Medical Director, Ambulatory Operations, MD Anderson Cancer Center Presented to Emmanuelle Schuler, EMBA ’14, Founder and President, Corallis Consulting LLC INDUSTRY EXCELLENCE IN REAL ESTATE AWARD Presented by Marie Bergeron, Director, Career Development Presented to Don Woo, EMBA ’16, President and CEO, Mission Constructors LLC INDUSTRY EXCELLENCE IN CONSULTING AWARD Presented by Dr. Haiyang Li, Professor of Strategic Management Presented to Bethany Andell, FTMBA ’01, President, Savage Brands INDUSTRY EXCELLENCE IN ENTREPRENEURSHIP AWARD Presented by Al Danto, EMBA ’00, Lecturer in Management, Entrepreneurship and IT Presented to Asma Ishaq, FTMBA ’02, CEO, Modere

The Alumni Community Service Award recognizes a member of the alumni family who has been a model of leadership and dedicated service to the community.

ALUMNI COMMUNITY SERVICE AWARD Presented by Dr. Barbara Ostdiek, Senior Associate Dean of Degree Programs, Associate Professor of Finance and Statistics Presented to Runsi Sen, FTMBA ’04, Founder and President, Ovarcome The recipient of the IREP Award was selected by current student leaders and recognizes a member of the alumni family who embodies the values of our community: Integrity, Respect, Excellence and Professionalism. The individual who receives this award will speak at Launch the following academic year.

IREP AWARD Presented by Brady Gibson, MBA Candidate, Class of 2019, President, Jones Student Association for Professionals (JSAP) Presented to Jonathan Ha, FTMBA ’99, Director, Server and Infrastructure Solutions Product Management, Dell Technologies Inc.

Photo credit: Poppy Seed Images

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Harvey Memory “I finally found the nerve to go through some

of the boxes that I hadn’t touched since I left the house. It was mostly trash — old shampoo bottles, extra toothpaste, a few towels that were saved. I’m not even really sure why I went through it as it was likely not worth the emotional turmoil that could come along with it. For some reason, I went through it all.

Wrapped in a towel was an original picture of my parents when they were 14 and 15 years old. I used to have it on my mirror in my bathroom. I thought it was gone. Finding that picture brought happiness that I hadn’t felt in a really long time. It gave me hope that things were going to be okay, and that even the hardest days are followed by really great new experiences. I believe many people who went through Harvey have moments like this more often than we know. I also think that most people don’t understand how long a tragedy like this truly impacts people, families and all of our lives. These floods, and all that has come along with them, have truly been the worst thing to happen to me in my life. Ultimately, though, I know the hardships have set the stage for the rest of my life, and I know that is very bright.”

Abbey Hartgrove, Associate Director, Global Programs

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around the water cooler |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| Class of 1978 John Fogarty has retired from Deloitte after 39 years in June of 2017, so in theory he has more time now. But life is so busy, he doesn’t know how he had time to work. John married his wife, Sara, last April, and they are enjoying their lives together.

Class of 1985 John Dobelman and Professor of Entrepreneurship (Emeritus) Edward WIlliams are celebrating the new 2018 edition of their textbook “Quantitative Financial Analytics: The Path to Investment Profits,” published by World Scientific. John and Ed have been collaborating since 2004 on various projects, most recently in quantitative portfolio management. This book evolved from previous editions used in the teaching of various quantitative finance courses in the Department of Statistics at Rice University.

Class of 1996 Douglas Yeung launched his own consulting practice, Epitelligence Consulting in Singapore.

His current focus is to help startups and mid-stage companies establish and structure their finance and accounting function and also provide financial advisory to help them grow their business and raise funds.

Class of 1999 Amy (Way) Anton started a cooking school three years ago out of her home in the Rice University area called Kitchen Underground. The school has recently expanded to offer classes in Austin.

Class of 2001 Upendra Marathi co-founded and lauched a new oncology company, 7 Hills Pharma, to develop drugs to treat resistant cancer. 7 Hills was started based on technology invented

by Upendra and co-founders at the Texas Heart Institue.

Paul Ericsson retired from ExxonMobil July 1 after spending the last 16 years working in Russia, Spain, Italy, United Kingdom, Canada and Romania.

He currently finds himself temporarily back in the U.K. Starting in July, Julie Young Sudduth is now serving as regional president of PNC Financial Services Group Inc. and will head the local leadership team as PNC looks to establish a presence in Houston. Most recently, Julie worked as an executive vice president with Louisiana-based IberiaBank, and has previously held multiple leadership roles at Amegy Bank.

This spring, Todd Litton won the Democratic nomination for Congress for the 2nd congressional district in Texas. The district includes all of Rice and the surrounding neighborhoods, and goes through Montrose, Memorial Park, Spring Branch and all the way around to Kingwood. Remember to vote this November!

Class of 2005 Andrei Stefan is managing director of b1 Engineering Solutions and, most recently, Oveit, an app he created with a friend three years ago. The app changes tickets into smart wallets in a world that’s shifting from ownership to experiences.

For event planners, it links to ticketing, registration, access management and cashless payment. B2B customers use the cloud app to set up all the above features and use the smartphone mobile apps to allow access to festivals, concerts, museums, theaters, galas, spas and more.

Class of 2007 Rauli Garcia accepted a position as chief revenue officer at AcctTwo Shared Services. He is headed back into for-profit after 10 years in executive non-profit positions. AcctTwo helps organizations achieve success by transforming finance and accounting into a growth enable and change agent, helping them move from historians to data scientists by transitioning legacy ERP systems into cloud-based SaaS platforms.

After 10 years in the Texas Medical Center at Baylor Genetics in various roles ending with the senior vice president of strategic initiatives and corporate administration, Sean Kim is making a career change and stepping into the chief administrative officer role at The Harris Center located in Southwest Houston.

54 RICE BUSINESS

Heidi Pozzo’s book, “Leading the High-Performing Company,” debuted on July 9. It’s a comprehensive and practical guide for business leaders to take their organization to the next level and is based on her experience, as well as recognized leaders such as Jim Hackett, former Rice Business professor and former Anadarko CEO. Victoria (Walsh) Cooper started a new job as a financial advisor with Majors & Mondragon Wealth Management in January 2018.

Class of 2008 Acho Azuike was named Houston Business Journal’s 40 Under 40 “honorable mention.” He is COO and managing director at DC Partners, an award-winning real estate development and investment firm.

Trent Crow recently launched Real Simple Energy, a company that crunches a ton of data to make sure customers always have the cheapest electricity bill possible. Trent has taken industry knowledge trading wholesale power at JP Morgan and is applying it on a micro level to retail power.

Class of 2009 Bishr Tabbaa and his wife, Mariluna Hernandez, are delighted to share the news of the birth of their son, Samuel Alejandro Tabbaa, born on June 26, 2018.

Class of 2010 Sharmin Ashtaputre started a company, Cutelery, ergonomically-designed silverware for kids. shopcutelery.com Aaron Davis and his wife, Amy, welcomed an addition to the family in March; a baby boy named Preston Connor Davis.

The family is now four large.

Jan Goetgeluk and Erica Goetgeluk ‘12 welcomed baby James to the world.

Class of 2011 Idris Bello recently co-founded Loftyinc Afropreneurs Fund, a $60M Hybrid Fund Tech Venture Capital Fund investing in innovative African entrepreneurs who are building rapid growth, technology-enabled, sustainable social impact ventures.

Calixto Ortega Sanchez was named chairman of the board and president of Central Bank of Venezuela in June.

Class of 2012 The Wakeford Thompson family welcomed a second child, Raines Louise, on June 15th. In July, Wakeford started a new job as a vice president at EIG Global Energy Partners, a private investment firm focused mainly on credit and structured equity investments.

Class of 2015 Kelly and Brian Nolan welcomed their first child, Madeleine Elizabeth, in February.

Class of 2016 Alex Chua won the 2018 Houston Chess Festival in July.

He won in a field including a Grandmaster and many other masters. Since completing his MBA, work and family life have kept Alex busy. He continues to play chess competitively as he can.

Photos: 1. Bishr Tabbaa and Mariluna Hernandez welcome the birth of their son, Samuel Alejandro 2. Edgar Vargas and his wife, Rebecca, welcomed Tess Marie 3. Jan and Erica Goetgeluk welcome the birth of their son James

Class of 2017 Kurt Hueni, Alan Henson, Tim Stephens and Edward Kroger helped teach “When Your Business is Sued,” an elective at Rice Business. The elective course was developed to expose students to the process and evaluation of business litigation cases. As part of the course, every student was deposed by practicing attorneys, and the course culminated in a mini-trial of a hypothetical case with the students as witnesses.

In June 2018, Meg Schneider won Gallup’s Rising Star Award, which is awarded to associates that excel within their first year of employment.

Following a lengthy and exhaustive job search, Ryan Stephens finally landed a new role with DCP Midstream as a commercial project coordinator. His heartfelt thanks goes out to the staff of the CDO and his classmates for their constant support throughout the process.

Edgar Vargas and his wife, Rebecca, welcomed Tess Marie (5.5 lbs, 19.5 in) to the family on April 1. Tess and mom are doing great, and Edgar has already started saving for tuition.

55

FALL 2018

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giving thanks ||||||||||||||||||||||||||||||||||||||||||||

Rice Business wrapped up this past fiscal year as one of its best yet. Alumni engagement is up,

clubs are being established and fundraising records were broken thanks to corporate giving.

The Rice Business Fund exceeded its annual goal and is maintaining a solid comparison against past years. The school has high hopes of continuing to build on this momentum for the next fiscal year and beyond to solidify the funding needed to make the Jones Graduate School of Business a perennial top-15 business school.

Total Fundraising Comparison: Cash and Commitments

Alumni Donor Retention vs. Average Alumni Giving: FY 2015 YTD Through FY 2018 YTD

56 RICE BUSINESS

face -lift Everyone is enjoying the first phase of renovations to McNair Hall that keep the building updated, efficient and relevant. An old conference room was transformed into the Jones Partners Innovation and Video Studio over the summer. It now delivers live and recorded messages, online course recordings, media interviews and promotions. The Executive Education classrooms followed shortly after. An updated look and expanded functionality include pre-programmable video capture, remote camera control and ceiling microphones.

Finally, Anderson Family Commons, a favorite event and meeting place, debuted its face-lift after Labor Day. The Nanawall, a glass wall that folds open, replaced the solid wall and expands and lightens the space. New lighting, furniture, carpeting and paint plus laser projectors, enhanced audio, multi-camera recording and streaming capabilities complete the upgrade.

Come see for yourself.

57

FALL 2018

TIMING IS EVERYTHING AND IT’S TIME TO LEAD

Are you ready?

Are you ready? Our faculty teach you the skills to tackle today’s emerging issues and drive your leadership to the next level. Take charge of your professional development. Register now!

TIMING IS EVERYTHING Our faculty teach you the skills to tackle today’s emerging issues and drive your leadership to the next level.

Take charge of your professional development.

Register now!

AND IT’S TIME TO LEAD

Are you ready? Our faculty teach you the skills to tackle today’s emerging issues and drive your leadership to the next level. Take charge of your professional development. Register now!

business.rice.edu/ee

business.rice.edu/ee

58 RICE BUSINESS

peter’s page NEWS AND NOTES FROM THE DEAN

profp_rod Thursday night Partio (i.e. Party on the Patio) at RiceBusiness and a little flair! This Place!

NONPROFIT ORGANIZATION US POSTAGE

PAID

PERMIT #7549 HOUSTON, TEXAS

P.O. Box 2932 Houston, TX 77252-2932

WELCOME HOME

You can always go home again. Rice University Homecoming. November 3, 2018. Game time: 2:30 pm against UTEP. Rice Business Tailgate: 11 am. Look for our tent on Tailgate Owley. Purchase game tickets at: riceowls.com/jones and tailgate tickets at: business.rice.edu/home

business.rice.edu/alumni