When ‘Stars’ Migrate, Do They Still Perform Like Stars?
As research on the National Football League reveals, sometimes the specific nature of a job determines whether a great performer at one company can replicate that performance at another.
Talent! Even though many companies seem to have the pick of the lot in today’s job market, “talent” is still the rallying cry of hiring managers and CEOs everywhere. Indeed, particularly in industries based on knowledge and skill — from consulting to pharmaceuticals to professional sports to food services —organizations are still competing for the best, the brightest and the hardest working: those overachievers who regularly outshine the merely competent. The belief is that such individuals — the financial analyst with uncanny market insights, the baseball pitcher with a devastating curveball, the pastry chef with sumptuous concoctions — are a key source of competitive advantage.
Past research is clear on the benefits of high-performing workers (let’s call them “stars”). For highly complex jobs, the top 1% of employees tends to outperform average workers by 127%.1 Star computer programmers are more productive than average ones by a ratio of eight to one.2 The top 1% of inventors is five to 10 times as productive as average inventors.3 And so on. In fact, in nearly every industry studied, researchers have uncovered the disproportionate effects of talent. Clearly, why wouldn’t any organization want to corral as much as possible of that tiny fraction of people who are superstars in their fields?
But reaping the benefits of such talent is not so simple. Say you hire a star. Now you’ve got the talent you need to break into a new market and shoot to the top — but for how long? How can you guarantee that your new star will continue to be a star, and that he or she will stay with your organization long enough to make your investment worthwhile? Consider that employees have become increasingly mobile, as the popular notion of “free agents” suggests — workers who can pick up and take their skill sets into any environment. Although the term “free agency” originated in the sports world, it is now commonly used in reference to knowledge workers, such as management consultants, investment bankers, attorneys, financial analysts, research scientists and CEOs and other executives. Skilled craftspeople and other nonprofessionals (for example, hair stylists, massage therapists and restaurant chefs) might also be viewed as free agents, because when they move from one venue to another they can take their expertise (and their devoted customers) with them.
1. J.E. Hunter, F.L. Schmidt and M.K. Judiesch, “Individual Differences in Output Variability as a Function of Job Complexity,” Journal of Applied Psychology 75, no. 1 (1990): 28–42.
2. R. Kelley and J. Caplan, “How Bell Labs Create Star Performers,” Harvard Business Review (July–August 1993): 128–139.
3. F. Narin and A. Breitzman, “Inventive Productivity,” Research Policy 24, no. 4 (July 1995): 507–519.
4. B. Groysberg, A. Nanda and N. Nohria, “The Risky Business of Hiring Stars,” Harvard Business Review 82, no. 5 (May 2004): 92–100.
5. G.S. Becker, “Human Capital” (New York: Columbia University Press, 1964); and G.S. Becker, “Investment in Human Capital: A Theoretical Analysis,” Journal of Political Economy 70, no. 5 (1962): 9–49.
6. B. Groysberg, A.N. McLean and N. Nohria, “Are Leaders Portable?” Harvard Business Review 84, no. 5 (May 2006): 92–100, 157.
7. A. Glenn, J. McGarrity and J. Weller, “Firm-Specific Human Capital, Job Matching and Turnover: Evidence from Major League Baseball, 1900–1992,” Economic Inquiry 39, no. 1 (January 2001): 86–93.
8. T. Kornheiser, “Something Is Happening Here, but You Don’t Know What It Is,” Washington Post, Dec. 18, 2000, sec. D, p. 1.
9. R.S. Huckman and G.P. Pisano, “The Firm Specificity of Individual Performance: Evidence from Cardiac Surgery,” Management Science 52, no. 4 (April 2006): 473–488.
10. B. Groysberg and R. Abrahams, “Lift Outs: How to Acquire a High-Functioning Team,” Harvard Business Review 84, no. 12 (December 2006): 133–140.