The Myth of the Lone Star: Why One Top Performer May Not Shine as Brightly as You Hope

By Boris Groysberg, Linda-Eling Lee and Robin Abrahams

March 23, 2009

Amid mass layoffs and a deteriorating economy, snapping up star talent is getting easier. But before investing in a marquee player at the expense of the rest of your team, consider this: Stars shine brighter when surrounded by other stars.

The idea that you can catapult your firm into the big leagues with one or two top performers is a myth—one we call the “lone-star myth.” The truth is, in the absence of equally talented colleagues, stars probably won’t excel at their jobs or stick around for very long.

High-quality colleagues bring four important things to the table: They are sources of information, offer insightful feedback, provide a critical link to clients and help burnish a star’s reputation. Here is a closer look at why surrounding a star with other stars is a win-win:

CREATING KNOWLEDGE: In today’s complex economy, even star performers can’t master all the levels of expertise needed to be good at their jobs. That’s why expert colleagues from other parts of the firm are crucial as sources of information.
Ideally, information exchange can enable both the sharer and receiver of knowledge to create knowledge—not a simple “now you know X, which you didn’t before,” but “you know X and I know Y, which implies Z.”

PROVIDING FEEDBACK: Another advantage of high-quality colleagues is that they can be the most astute and valuable sounding boards and critics of a star’s work.

While researching investment firms, for example, we found that stock analysts benefit from outstanding work by portfolio strategists, whose job it is to help investors allocate their investment portfolios. Institutional salesmen also help analysts. Say an analyst proposes a change in a stock rating. By anticipating clients’ reactions and crafting potential answers to their questions, they can help spot potential holes in the internal logic of the analyst’s argument.

DELIVERING PRODUCTS AND SERVICES TO CLIENTS: In many industries—advertising, investment banking and engineering, to name a few—star performers rely on colleagues to position and deliver their product or service to clients. If the client-facing colleagues can’t do that effectively, it won’t matter how wonderful a star’s work is—it will be for naught. On the flip side, having a high-quality conduit to customers provides stars with valuable market intelligence that can improve their work.

One of the investment banks we studied said it encouraged a close connection between analysts and the firm’s institutional sales force and traders for that reason. The salespeople played a key role in getting clients to accept and act on analysts’ reports. No less important, the salespeople passed on to the analysts what clients were thinking about and looking for, which raised the quality of the analysts’ work.

ENHANCING REPUTATIONS: Finally, high-performing colleagues can help a star’s reputation shine even brighter because clients tend to think more highly of people who work for firms with a track record of excellent work. This is referred to as the “halo effect.” In addition to keeping clients happy, the halo effect can benefit stars by creating greater access to resources outside the firm. Chief executives who will happily take calls from an analyst at Goldman Sachs, for example, may find themselves a bit too busy to talk to an analyst at a small unknown boutique bank.

BOTTOM LINE: The more stars you have, the better they will perform, and the more likely they are to stick around. To get the best of your top performers, maintain a “no-jerks” policy: Stars who don’t play well with others won’t benefit you in the long run. Make sure you have top people in different functions throughout the firm, not clustered in a single function. Above all, create a work culture that encourages cooperation and teamwork. After all, hiring, developing, motivating and retaining good people remains the best security any company can hope for, especially in tough times.

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