As the economy wakes from its long winter, expect the “Talent Wars” to heat up. Organizations feel increasingly confident about creating competitive advantage through talent and seek the “superstars” to take them to the next level. Star employees who waited out the economic storm in other organizations are anxious to take the leap. It’s a win- win, right? Stars get the opportunity to cash in on their accomplishments and re-create their success in new organizations. The new organization gets a market advantage due to the brilliance and capability of their new star. While it sounds good, raiding stars is often a lose- lose for both the star and the new organization. Why? A single star can’t take critical elements that created their success with them.
The Case to Chase Stars
Knowledge intensive industries, such as finance, law, technology, etc. carry an assumption that the performance rests within the talent of the individual. Those who believe knowledge work is fungible view talent as a plug in. If the law is the law, the best lawyer will get the best results. If code is code, the best engineer will get the breakthroughs. Because individual attributes are portable, the organization that lands the best knowledge-based talent gets the success that they bring with them. Thus, the case is made to chase stars. Bring your bag of tricks and come work your magic for us.
The Portability Argument
Research out of Harvard University disputes the notion that talent portability is a quick fix to build organizational capability. Boris Groysberg, Linda Eling- Lee and Ashish Nanda found a near perfect subject for examining the portability of star success: stock research analysts. The quintessential knowledge workers, research analysts analyze companies in particular industries and make subsequent investment recommendations. This word requires individual talent and insight, deep knowledge of a particular industry; lots of industry contacts, and a quality reputation built on reliability. All of those attributes travel with the individual, so success should be portable. Groysberg, Eling-Lee and Nanda followed star stock analysts who changed employers, presumably reflecting an attempt by the raiding organization to build an advantage. But it didn’t work. Star analysts that switched institutions had a decline in performance that lasted almost five years. The new organization captured the individual talent, but not the structure that built their success.
What Else Goes Into the Success Mix?
Of course, high performing knowledge workers add value to their organizations. But how? The best outcome comes from the combination of skilled individual talent and organizational capabilities. Here’s what high talent knowledge workers can’t take with them when they leave:
1. Knowledge of the “unwritten rules”. This is all of the “how to get work done” knowledge that rests in the organizational white space. Firm insiders accumulate tacit knowledge they utilize for success. What are we really good at? How do I find the best resources? Who is an expert? Groysberg, Eling-Lee and Nanda argue that this accumulation of organizational tacit knowledge explains why improved performance of experts is related to tenure.
2. Their colleagues. No one gets results alone, not even superstars. When stars switch firms, they lose their internal social network along with the information, support and advice it provides. They lose the collective wisdom of shared experience and the complimentary skills that filled their gaps.
3. Organizational capabilities. High status organizations have more to offer stars. They have more resources, more opportunities, more visibility and typically, a higher talent level of colleagues. Stars find it difficult to reproduce results when they move to an organization with less industry status.
Organizations and people successfully match for all kinds of reasons. It’s wise for organizations to seek the best possible talent for openings, just as it is for people to seek the best fit. Everyone deserves to be in the place where they can shine. The danger is falling into the delusion that a single individual, even a superstar, is a hero whose placement alone will provide competitive advantage. Too much of anyone’s success is embedded in organizational and relationship context to expect him or her to readily duplicate old results in a new place.
For individuals, be realistic about what you can or cannot duplicate from your current success. If you decide a move makes sense, expect to put considerable time into learning how your new organization works, building new relationships and understanding the organization’s capabilities. Enter with an open mind and show some humility. Regardless of your stellar resume, you will need the grace of others to succeed.
For organizations, hire talent not heroes. It’s unfair to expect anyone to immediately replicate his or her old results in a new place. Be prepared to invest time, energy and resources to maximize the potential of new hires, even superstars. Above all, attend to current employees during the transition period. (Perhaps if current employees were attended to all the time, you wouldn’t have to chase stars – but that’s a different post.) Your new stars’ ultimate success will rest on his or her ability to give their best and get the best from others, so start those relationships right.
Success is an amalgamation of individual talent, organizational knowledge, collegial support and institutional capabilities. Remember that removing one element diminishes all.
Groysberg, B., Lee, L.E. , Nanda, A. (2008). Can They Take It With Them? The Portability of Star Knowledge Workers’ Performance. Management Science, July 2008. Vol. 54, no. 7. Pp. 1213-1230.
- There is no “War for Talent” (colleensharen.wordpress.com)