Summing Up
Three themes appear to characterize many of the responses to this month's column: (1) leadership talent is portable, (2) the reasons that we chase stars are traceable to human nature, and (3) women have qualities that explain why they have greater success in porting their talent from one organization to another.
Several discussants maintained that portability is high for certain leadership talents. C. J. Cullinane stated, "The manager who is experienced in cost-cutting and turn-arounds can use this talent in many different situations and be successful." Philippe Gouamba said that "Management performance is 75% portable … (but) today's tough environment has forced upper management to adopt a 'welcome to the team, good luck, here is the deep end of the pool, hope you survive'" approach. Guy Higgins added, "Management is highly portable if people will take the time to learn their new company's management processes." Stephen Basikoti put it this way: "The fact that some transplanted leaders do not succeed does not negate the fact that management performance is portable; it simply points to the uniqueness of the learning curve for each change."
Transferability was thought to be particularly difficult in a move from a large, successful organization to a smaller, struggling one. In Gerald Nanninga's words, "If you put a super-operator in a place where the position is poor and resources are weak, they have nothing to leverage. Their skill-set is wrong."
We chase stars for a number of reasons: "… corporations and the media encourage stardom and discourage team work" (Nauman Lodhi); "It is the expectation that some 'miracle worker' or 'hot shot' can come in and fix issues without the board facing the pain and agony of doing the hard work themselves." (Phil Clark); "It's about selling the dream that the star will add to the bottom line fast with new clients, etc." (Jacoline Loewen); "Rather than create succession plans to hone existing talents, it's so much easier to scavenge for those floating around in the industry." (Vanitha Rangganathan); and "We chase stars because we are fallible …Glamor always is enticing." (Vadeed Lobo)
Women are particularly successful in porting their skills because "… women are more associated with transformational leadership," according to Fidel Arcenas. As Ratnaja Gogula put it, "…traits (that) make women better contenders for talent portability (include) … women's ability to better cope with stress, better communicate and multi-task …" Tom Dolembo asks "are women really different, or have they simply evolved in management by gender bias with skills and talents so alien to their male counterparts that they are uniquely powerful in an information world?"
Other questions come to mind. Do we continue to overstate the portability of star talent? If so, how much of it is attributable to our need to believe that management is a profession? What do you think?
Original Article
How many times have you seen this happen? An organization seeking to make a senior management change goes after someone from outside with a reputation for, and record of, high performance. It pays a premium, thereby disrupting its compensation scheme, and discourages promising internal talent that isn't considered quite ready for the job. Then the outsider fails to perform up to (probably inflated) expectations, and the staffing process starts again.
Is this the exception or the rule, we ask ourselves? Boris Groysberg, in a new book, Chasing Stars: The Myth of Talent and the Portability of Performance, based in part on earlier research with Ashish Nanda, Andrew McLean, and Nitin Nohria, seeks to find out answers to the question.
Groysberg and his colleagues studied what he calls "the portability of performance," and reaches conclusions that might give pause to many who chase stars. Their subjects are top investment analysts (as identified annually by Institutional Investor magazine) and the organizations that develop and hire them away from each other. Their analysis is based on a large base of data for 1988 through 1996. It includes ratings before and after an analyst's transfer from one investment bank to another as well as the results of extensive interviews over several years of study.
Among other things, they found that "star analysts who switched employers paid a high price (in performance, not compensation) for jumping ship relative to comparable stars who stayed put." (The same might be true for their employers as well.) Groysberg emphasizes that the more appropriate question is, "Which stars are portable under which circumstances--and why?"
For those hiring stars, Groysberg says the evidence "strongly suggests the wisdom of hiring from firms with similar orientations … and lesser or equivalent quality" that are less "resource-rich" than one's own, with every effort made to redress the asymmetry in information and inadequate due diligence that almost always accompanies hiring from outside. (The italics are mine.) He suggests that every effort should be made to avoid the "winner's curse" of overbidding to get talent without a clear picture of how they fit into a longer-term strategy.
Groysberg, along with Andrew McLean and Nitin Nohria, extended the inquiry to 20 General Electric top executives who moved to high positions in other companies. They concluded that those who "took over, built, or implemented management systems that resembled GE's were more successful," while "those who went to different industries, those who moved solo (rather than with a team), and those who joined companies whose needs (exploiting existing business opportunities as opposed to exploring new business opportunities) called for different skills performed poorly."
These studies trigger a number of issues for us. For example, to what extent do they raise questions for those who argue that general management performance is highly portable? If it isn't portable, at least under many conditions, what does this say about the associated thesis that management is a profession? Or the notion of the individual high-performing, newly-hired CEO as an important key to a turn-around? Can a study of investment analysts do much more than suggest hypotheses for the study of general management and governance? How "portable" are its findings? Why do we chase stars? What do you think?
To read more:
Boris Groysberg, Chasing Stars: The Myth of Talent and the Portability of Performance (Princeton, N.J.: Princeton University Press, 2010).
Boris Groysberg, Ashish Nanda, and Nitin Nohria, "The Risky Business of Hiring Stars," Harvard Business Review, May, 2004.
Boris Groysberg, Andrew N. McLean, and Nitin Nohria, "Are Leaders Portable?," Harvard Business Review, May, 2006.
- CJ Cullinane
There are certain areas of management that can be 'learned' and practiced at one company and then the practitioner can utilize this ability/knowledge at other companies or organizations.The manager who is experienced in cost-cutting and turn-arounds can use this talent in many different situations and be successful.
I feel this is not the case when dealing with a poorly managed company that is not ready for real change. The new superstar manager just floats on the top of the organization (like oil and water) and does not change the lower levels or the culture.
Charlie
- Jim Heskett
- Harvard Business School
Since the posting of this month's column, I've received a suggestion from Boris Groysberg himself that we consider another of his findings.It is that female star analysts are significantly more successful in porting their talent from one organization to another than are male star analysts. How do explain this finding, and what implications does it have for organizations wishing to import talent?
- Nauman Lodhi
- Business Manager, Sorcim Technologies
This is an interesting study and I agree with the these arguments. No matter how smart management professionals are, they might not be able to steer different organizations. It takes time to understand the culture of a new organization.Your question on why we chase stars has to do with how the corporations and the media encourage stardom and discourage team work. This results in increased expectations on part of the employers who wish to succeed no matter if they have to chase a 'star'.
- Yadeed Lobo
We chase stars because we are fallible and fall for what we call the facade of high performance. Glamor always is enticing. In any business what we should look for is potential. Perhaps an outsider(not from the Senior Management Team) from within the business. I often ask myself what if the Green Bay Packers had not chosen Vince Lombardi , an also ran Assistant Coach, would things have turned out the same way.Some boards have the wisdom or should I say common sense, some don't. Why did Unilever bring in an outsider, while it had groomed talent over decades? Some say the old European guard never allowed it, others would say it was the complacency which had set in over decades. If we could read minds then perhaps it would be evident.
As far as star analysts, my guess its luck what happens when you move from one business to another. Hard to generalize anything based on a particular occupation, which save one analyst at Oppenheimer, could not advise clients to withdraw their money at the right time.
As far as portability is concerned if you want to make something work, you will. As long you chase excellence, not a golden parachute.
- Fidel M. Arcenas
- TIEZA - Philippines
Boris Groyberg's observation, as posted by Jim Heskett, that "female star analysts are significantly more successful in porting their talent... than male stars" leads us, with much validity and relevance, to the gender issue in organizations, or more precisely, in managerial leadership.Since the Women's Lib Movement, there had been several studies on the role and competence of women in organizations. Schien, Brenner, Tomkeweicz, Heilman, Brock, Martell, Helgesen and Rosener were among those who contributed important literature on women in organizations.
Rosener (1990), for example, observed that women's leadership center around four themes: consensus building/power sharing, conflict management, supportive climate, and commitment to diversity.
Of the many observations, one is particularly interesting: Women succeed where men fail because women are more associated with transformational leadership which inspires followers to attain higher levels of performance.
Controversial as this theory may seem, it is worth exploring in the context of this current discourse.
- Harold Ford
- WreckedCarsForSaleHQ.com
Great academic work on a commonly experienced issue.I agree totally with the findings from a practical perspective. In organizations that I have been in, and had the chance to observe VPs enter from other companies, it is clear that the one's that come from distinctly different businesses do not fit in well. Either one of two things seems to happen: 1) The executive tries to implement a system or way of thinking that not only does not fit with the new organization, but is likely destructive to what is already working well, or 2) They expend significant amounts of energy trying to adapt and as a result do not have a chance to add much value until a few years into their tenure. Have others experienced similar?
Thanks.
-Harold
- Phil Clark
- Clark & Associates
It isn't particularly about the stars. It is more in the eye of the beholder. If I can hire someone who supposedly was successful and has accomplished what I want for my company, I ,as a board member, really don't have to change. Just hire this person and magic will happen. Instead of addressing issues within the company, it is easier to bring in a "new sheriff" and let them do it. It is the expectation that some "miracle worker" or "hot shot" can come in and fix issues without the board facing the pain and agony of doing the hard work themselves. Often it is the unwillingness of the current organization to really face the truth about themselves.Sadly as reflected in the opening, those hiring the star haven't done their homework. The new organization's circumstances may be completely different and foreign to the experience of their new candidate. When this occurs it is "shame on both the board and the star". The board placed a person in a position where they may not be successful and the star let his/her ego get in the way to making a decision based on their real skills.
It may be just rooted in human nature that we are always looking for the star or hero to make our life better regardless of the realities.
- Jacoline Loewen
- Partner, Loewen & Partners
Hiring someone from outside with a record of, high performance, paying a premium and discouraging promising internal talent is common. It's about selling the dream that the star will add to the bottom line fast with new clients, etc.I deal with owners who are partnered with private equity and who are needing to grow the business. In this case, the inside talent may have a hard time being transformational because of the embedded, long term dynamics.
Bringing in star talent is tough for the current management, but in my experience, does jump start the business to double in size within a few years.
I agree that the star from the less resource rich company is influential too. Coming from marble floored foyers to private equity owned firms will be a disappointment as there is no budget for that assistant to run the spreadsheets for you. I have had CFOs in particular fail due to a more roll up the sleeves requirement.
The industry strategic focus cross-over needs to be very close. An army style company management style with consistency and "do it right the first time" as prime focus will not fit an innovative company like Cirque De Soleil.
Culture of the star is every important.
It is interesting how GM is being revitalize though by a leader from Bell.
Management skills and tools are portable, but cultural fit is almost predetermined.
- Mok Tuck Sung
- Profit Tools
From his book "Unstoppable", Chris Zook mentioned "the most successful companies at redefining their core strategies use assets that they already have at hand or to which they have easy access". Chris further mentioned "focus on the use of hidden assets to improve the odds and generate innovative new strategic alternatives"It is about strategic innovation that an external talent could contribute to the success of the company.
The external talent could never able to reinvent a complete new business, or applying old strategies to new situations and hoping it will work.
To be successful, he or she needs to generate innovative new strategic alternatives that built upon the existing fundamental success elements (viable business, large pool of existing customers, and healthy profit margins), suiting the business culture and skillful execution of fundamental management skills.
Fundamental managment skills are portable, which means management is a profession. Just as, all businesses, irrespective to which industries, involved with money being invested to make more money for the investor.
- Philippe Gouamba
- Vice President of Human Resources, Skyline Windows, LLC
Management performance is 75% portable in my opinion. What makes a manager successful begins with a very basic skill set which includes thoughtfulness, attention to detail, resourcefulness, the ability to think on one's feet, the ability to make decisions, the ability to plan ahead etc....In addition to these basic skills, a manager should have formal knowledge acquired through higher education. These attributes are portable. The problem is that even the most successful managers are not omniscient. When a manager moves from one company to the next, he may have an idea of what problems and challenges he will encounter at his new job but he cannot know all that he will face as he/she hits the ground. Management is a profession; one in which you are tasked on a daily basis with managing a department or a firm with limited human resources and limited financial resources. The challenge for all managers is to apply all available expertise and skill to the problems that will be arrayed in front of him/her.
Long ago, there used to be a thing called "on the job training". Apprenticeships and years of grooming were a big part of how many employees were brought along and ultimately molded by firms to fit into their jobs. Times have changed. In today's fast paced, high pressured economic environment no one has the time to train anyone. When I recruit, I look for individuals that very closely match a position that I am trying to fill. We want to minimize to zero the "on the job training' period and maximize the "hit the ground running" aspect. We do all this hoping that the new recruit will immediately forget the corporate culture he/she came from and rapidly adapt to "our" corporate culture. Today's tough environment has forced upper management to adopt a "welcome to the team, good luck, here is the deep end of the pool, hope you survive...you had better survive because your resume indicated that you could survive" attitude.
Upper management chases "stars" under the delusion that "stars" can just show up to work and hit the ground running; which is not always the case.
- Paul Wimer
- Principal, Lodgepole Advisors LLC
There are certain elements of management competence that are transferable - just need to be careful of the size of the organization. My experience as a consultant and a venture capitalist has provided ample example of "high performing" big company people that could not translate their skills to smaller, entrepreneurial organizations. Critical skills of leadership, creativity and problem solving seem to be linked to organization size - and get lost when trying to go from large company to small - possibly a lack of resources - or possibly just atrophy, as smaller companies require more hands on, gut requirements- Mike MacDonald
- Free Agent
General Management skills are usually honed while leading a profit center/business unit. Thus the general manager is exposed to many of the disciplines that drive a company such as sales, marketing, finance,auditing and accounting, employee/labor relations...really understanding how a business operates and functions and leading it to success. Many if not all of these disciplines are transferable. Understanding where the employees and customers come together and the service or product is delivered is a basic fundamental. Once you understand this in a new organization you can begin to make improvements and keep your eye on the metrics that measure success.- Anonymous
To rule someone in OR out because they are a "star" is weak thinking, a flawed process and simply lazy.What I believe to be the practical application of the authors' findings is: don't assume.
If you chase stars (or anyone for that matter) be clear on what you want the incoming person to deliver, analyse your current situation and chase those who have succeeded with similar challenges - hopefully more than once. Subsequenlty assess their ability to employ the critical tools / tactics / strategies for success in the role. Then make a choice.
If you are basing your selection process simply on one performance factor at one company then your selection process is flawed. Some stars can, and do, perform well in new circumstances, and some poor performance can be attributed to external factors.
Don't assume, do due dilligence (on your organisation as well as the candidate).
And a word of note: This "Star" quality doesn't just apply to people - it applies to companies. One of the most common mistakes we see is people assuming that because someone coming from a stellar performing company (e.g. GE) makes them a star. Even good companies have bad performers and bad companies have good people.
- James Raj
- BNYMellon India
I agree with the findings in the survey. Another point the companies who are chasing the stars failed to see is, the environment where these stars have performed. May be they had a god father who shared some of his successes (come and share the credit with me!!) or the company was obsessed with cost cutting and this 'star' was very good in cost cutting but poor in other areas or the 'star' had some real stars working for him/her who actually made this star shining.- Henry Kwok
- Director, SPACES@Work, Singapore
I am sure many of the big corporations that chase after stars are aware of the limits in the portability of their performance. I am sure their boards are not so foolish to recognise that the best practice in one organisation can spell disaster in another as the cultures and DNAs can clash spelling more disasters. Each season we continue to see teams at the bottom of the league table beating star-studded teams just because they can play the game as a team better. This gives credence to the time proven saying that warns us that the green grass in our neighbour's yard may not be greener than ours.It would be more interesting to ask why corporations knowing the pitfalls of chasing stars would continue to do so. There is more than meets the eye!!
- Dr. S.A. Visotsky JD,LL.M.
- Chairman, Vitech Group LLC
Stars can be right in front of you. I suggest knowing your organization better, and through a "grooming process", creating your own stars. Female Stars (from outside the organization), are a distraction. How many of you have been called into a "closed door" meeting, (male only), to recieve your "warning briefing" about the new hot shot female Manager coming to your organization? Warning you of her "ultra sensitive personality", or perhaps, making sure you have a third party present when called before her desk? We all saw this happen at Lehman with a well known female star. And what was the outcome? Thank you for calling....next.- Kumara Uluwatta
- Senior Lecturer in management Accounting, Wayamba University of Sri Lanka
We chase stars for different reasons;(1) Hiring Innovative Ideology
(2) Feeding people more efficiently
(3) To see the change philosophy
(4) Increase Goodwill and reputation
(5) Attract Eye on to the organisation
(6) To have break through for institutional efficiency etc
Therefore, in one hand this can be identified as myth, on the other hand this may be identified as required myth for the success
- Jim Quirk
Why do we hire stars?First, we all like simple story lines with an apparent logic and add water solutions especially when it appears to short circuit a lengthy rebuilding or building process.
Secondly, most "Star Hires" are made in the depression of crisis or in the intoxication of euphoria and are seen as quick fixes for situations such as:
* In the wake of a scandal to try to provide distraction and instant credibility
* Death spiral sales results or loss of market share
* A real or perceived urgent need to enter into a new market or product line
* Or alternatively things are going very well and the thought comes to the board or senior management, imagine how well we would do if we brought in a "heavy hitter" to lead the company.
Try this test when considering a super star take what they are asking for compensation and double it with one caveat they will accept the compensation after their star power has created all the anticipated success.
A true star who is certain of the path to success will leap at this offer. The serial CEO will be on the next flight out in search of more naive employers.
After all stars are hired in anticipation of breakout growth and industry leading results and if delivered the multiple will be more than worth it.
- Tom Dolembo
- Founder, NewNorth Institute
Great postings! I am reminded of CEO "Chainsaw" Al Dunlap, who branded the cost cutting turnaround in the late "90's, was a media darling, and crashed in flames. And I am still looking for a job description for "CEO", although the list of requirements do seem to match Mother Theresa and Al in a package. GE's Jack Welch had a fabulous flack working for him during his rise, and has since bridged out successfully on his own in that career. It's hard to break into the often flawed personal mythologies of these "star level" people. I am taken by the quote of a CEO in my past, " a lot of these guys say they have 5000 people reporting to them. The only people you have reporting to you are the ones you know their kids names, their wives birthdays, and their anniversaries. That's it." It is very hard to remember that a CEO is just another employee.Do professional managers exist? HR types think so. Resume sorting software thinks so. "Star" CEO's have a personal myth that is compelling, a good story, a well crafted and often erroneous fact record, and a way of presenting myths for every problem. Sports analogies abound, score is big. I think these characters are part of an obsolete management structure of which Harvard Business School past (the light is at last dimly up), McKinsey, BCG and the like are partners. The CEO is really often a shill, a hiring point for we consultants to supply with cockeyed theories, a way to bill time and talent so alien to the company that it is viral. CEO's don't manage, they don't even function in many cases, they distribute advisory services.
Women come up the ranks from a different place, are rare species, and often can sit in a board room with fifty separate conversations going on and keep track of each one. A man would make folks take turns. Women I have worked with have multichannel information levels, and seem to be able and desire to use volumes of information, conversation, and relationships to maintain an often accurate and dynamic picture of corporate reality. When they ask for advice, they mean to use it. Never sports analogies. A lot about the flow of things, less about the down by down color commentary. Corporate health yes, score not so much.
We have to ask a question, "are women really different, or have they simply evolved in management by gender bias with skills and talents so alien to their male counterparts that they are uniquely powerful in an information world?" Has the glass ceiling created a path for women to build great companies below it?
If we eliminated every last job above the glass ceiling, send these predominantly male "stars" and their job titles packing, would we be left with the best from just below? As a very bright nun told me on a job (broke my pick on that one), "we don't lack clergy, Tom, we lack vision."
- Sherpa
Any company that cannot promote its O's from within is either very small or not operating in the most forward thinking manner. Furthermore, if a going concern does not have two generations of upper level management up and running simultaneously, they are woefully lacking in preparation and planning. To go outside for a new leader is a "slap in the face" to an organization and to its people, under any circumstance. Why should a man or woman strive to climb the corporate ladder if there may not be a pinnacle rung? As for Mr. Heskett's addendum to this paper, the answer would most likely be that corporate America is still in search of a more kind and gentle leadership.- Nelson Cordeiro
- Manager Learning India
There are very few companies that enable the perfomance of newly hired senior people. Performance is an output delivered by an individual in a given environment.Historically we have learned about good number of successful organisation where in externally hired senior executives added tremendous amount of value to the oragnisations particularly by enabling the organisational performance , be moving the right levers in the organisation, by winning over all people or atleast the significant people in the organisation.
I think we need to deliberate on basic definition of Mananagement and critically analyse to include "sustained development and growth of the organisation with all stakeholders support". That means moving beyond our current defn ie "getting things done."
In current market and difficult situations how many companies provide opportunities to externally hired senior execs to meet up with all stakeholders in the company and allow the person to develop good working relations?
For success or failure of people in the organisations many a times the answer lies within the organisation. Blaming the individual without proper internal enviroment analysis is not a correct way to build long term sustainable companies.
Nelson Cordeiro
nels.cordeiro@gmail.com
- Ratnaja Gogula
- Product Manager, Kenexa
I disagree with Groysberg's suggestion that every effort should be made to avoid the "winner's curse" of overbidding to get talent without a clear picture how they fit into a longer-term strategy. Stars, male or female, I believe are most of the time 'highly achievement motivated'; due to this attribute of theirs, they sooner if not later fit/move into organizational strategies, irrespective of not having a clear picture of where they will fit at the time of entry.I further believe that a few traits of women that are testimony to Simone de Beauvoir's famous line in The Second Sex- "One is not born but becomes a woman", make women better contenders for talent portability to new organizations as compared to men; women's ability to better cope with stress, better communicate and multi-task, make them better candidates for talent portability to not only new similar organizations but also into new industries.
Talent importing organizations need to research and devise ways/applications for assessing 'achievement motivation' levels of individuals as well as develop and enhance support mechanisms that will attract star women, who otherwise are happy in maintaining status-quo, to actually engage in making themselves portable.
- Gerald Nanninga
- VP, Retail Ventures, Inc.
The companies most compelled to pay the big money for an outside star would be companies with weak performance. After all, why pay the big money on an outsider if performance is already strong? Weak companies usually have one or both of the following problems:1) Poor Position in the Marketplace
2) Weak Resources (talent, cash, IT, tools, etc.)
Stars usually come from strong companies--after all, you wouldn't call them a star if the company they were at was doing poorly. Strong companies typically have a strong position and great resources. The people in these strong companies tend to become stars by being "Super-Operators"--people who can get the most out of their strong position and ample resources.
If you put a super-operator in a place where the position is poor and resources are weak, they have nothing to leverage. Their skill-set is wrong.
The only Stars that typically succeed in moving from a strong place to a weak place are those with transformational skills, not operating skills. And even then, it is hard to make transformations if you do not understand the industry. So, if you feel compelled to look for stars, look for transformational stars (hard to find), not the operational stars (which are more plentiful).
- Kapil Kumar Sopory
- Company Secretary, SMEC(India) Private Limited
Generally private companies try to fill top level manpower positions with external talent on many occasions despite proper availability of talent inside. This is due to a mistaken belief that the one from inside has developed certain traits- all not good- and may even operate with biased preconceptions not to the ultimate benefit of the organisation.Much can be said in favour of so called "stars". They have achieved excellent results in their previous positions and could do likewise in ours. However, does the incumbent really know where we stand and what is expected of him ? Have we tested his acumen through detailed interviewing and come to a conclusion that he can deliver? More so, isn't there a big mismatch between what he did earlier and what is now expected of him?
Hiring a "star" is a great risk much more than if we promote a junior instead. More often, the outsider has been bestowed with undeserved and exaggarated impression of his pluses to indicate he would be a panacea for all problems.This raises expectations to a level which may not be met at least in the short run.
Hence we need to be wary of hasty actions and hiring such outsiders on critical positions should be well thought of.
- Surendranath . A
- Genral manger - HR &ADMN, BMM Ispat Ltd., Hospet, India
The success of a 'star' performer in a new organization depends on his or her adaptability to the new work environment and the prevailing culture. But the very important aspect is the commitment of the top management to position the new hired 'star' in the new organization. When a new hire joins, top management expects wonders to occur based on their knowledge of the 'star' in other organizations. But they are not aware of the work environment or work culture prevailing there.- Henry Maigurira
- Executive Secretary, Pachi Develpment Foundation
Introducing new stars in companies and organizations certainly has to do with many functions of human resources development and talent management in organizations in the interest of hiring best performing people who perform efficiently. The level of positions which the new stars acquire is of primacy importance especially with regards to leadership in innovative human capital skills. Taking into account the matter of portability best understood in the context of progression in terms of capability from one level to another, it is a practice depending on company requirements of demand and supply of its business cycle and human resources needs that personnel with more advanced skills tend to be absorbed in the market by companies whom are regarded as "stars' who provide new expertise to operational processes. I find very interesting that Stars who are feminine tend to adjust rapidly and perform better more than male counterpartsand the answer this has been well alluded to that gender parity of mentality and attitude of which i suppose primarily has to do with human relations and socialization nature of female personnel.
On compensation i tend to agree with author on the notion of performance based compensation.
- Pallavi Marathe
It is just not about stars. It is true of anything or anyone that we chase. All that glitters may not be gold but it does look enticing and many a wise men fall for the sheer shine!- Anonymous
Stars are made from within.Forget the outsiders.
Stars come to us, we should not seek them out.
- Ravindra Edirisooriya
- Senior Accounting and Finance Major, Missouri Southern State University
Of course we "all" chase stars! We chase stars because they are exciting, refined, wild, and unpredictable and they seemed to set the new norms of culture, standards of excellence and what is socially "acceptable" for the rest of us young and old to emulate. Professor Heskett has assumed that all companies chase stars, which may be appropriate in some Wall Street investment firms and multinational companies with head offices in the East coast. However, there are some Fortune 500 companies located in the Midwest and those companies are not known to chase stars for high level professional staffing positions, executive level management positions or the CEO position. How could one explain this difference?Every company has a gate keeper or keepers at different levels who are the real power brokers that decide who put their shoulders on the corporate wheels of these companies. If we can understand the nature of these gate keepers then we can understand why they chase stars or why not? Also, are we to assume that all these gate keepers are free of agency problems? Companies producing goods and services in sectors with monopolistic or oligopolistic competition can easily survive the effects of gate keepers with agency problems. At all corporate levels, jobs are limited and in demand (scarce). Hence, the gate keepers employ "rationing devices" that fit their view of the company, society and the world at large. There may be competent internal candidate(s) for a position but the gate keepers may ignore them to preserve their agency agenda. It is "The way we do business here." What's wrong with that?
- Kamal Gupta
- CEO, Edseva
Can I give a hiree's perspective. I have worked as COO with two organisations, and CEO with two other organisations. Each was in a totally different business. Each time I asked the hirers why they wanted me since I had no or very little knowledge of the business.Each time I got the same reply - we don't want someone from the same business, they come with set ideas on how this business operates. As long as you understand what management and business are, we would like to hire you. You will bring a fresh perspective.
One thing to keep in mind though. Since 1991, Indian busines scenario has changed radically, beyond recognition, and people with set old ideas were becoming obsolete as leaders.
This may or may not be true for other economies which are mature and are growing organically.
- Shadreck Saili
- UCT
It seems a natural phenomena not to perceive the existing human capital in an organisation as vibrate enough to move things forward. It is true however that and which in my view is normally ignored is the fact that everyone in an organisation works more less in line or in the direction of the CEO. That is not to say each and every 100% agrees to that direction and that if given a chance to move the institution forward would direct in the same way. This one type of thinking make decison makers chase winds and believe that what is best for the organisation is our side the institution. The persons we chase seem the best because we choose to blind ourselves with the fact that we dont them preaty well and thus make judgement on the little good things we gather about them and convince ourselves with that little bit.Chasing the wind for stars is thus charecterised by the not believing and trusting in our own human caiptal that we infact have the ability to mould to our intended standards
- Vanitha Rangganathan
- Malaysia
Management chases external talent because they are have no idea on how to leverage on talent that they have shining right before their eyes. Rather than create succession plans to hone existing talents, it's so much easier to scavenge for those floating around in the industry. I find this incredulous because these external talents are defined purely by the industry and may not fit the individual organisation's standards or values. One too many exist in the industry's hunting list because they have spent a good part of their career lives job-hopping and increasing their monetary value as they sail through different organisations. Not necessarily out of credibility in terms of known potential and performance at par excellence. My personal experience dealing with them has left me with not much respect for their so-called mettle.'Stars'?- they are far from heavenly.
- Nicolaas
- DR candidate / Firm Director, Parahyangan Univ / Energy Biz
A management star is important, but has it the strongest impact to the firm's performance ? In a corporate context, General Management Capability has to "align or to comply with" the corporate's strategy, and especially to the corporate's environment which include the industries that the corporate's are in. A star who knows this strategic rule is really a strategic star for a corporation.- Rina Day
It is a very interesting topic 'chasing stars' and reading all the comments. It feels that 'chasing stars' is a common 'clause' in organisation's recruitment guide book. It also reflects that organisation have to fulfil this 'clause' to be part of a bigger industry affiliation and network.However, time and time again it clearly demonstrates through research, media and company experiences that the 'chased star' is not an appropriate candidate resulting rate payers or shareholders money in hiring such candidate. There are loads of case studies where internal staff is a much better choice if adequate succession planning is undertaken.
The way to forward in addressing this epidemic of 'chasing star' syndrome is to identify strategies to raise awareness and generate an idea for a 'new clause' - Recruitment Guide Book. Well, this article is certainly a great start.
- Anonymous
It is likely that the greatest difficulty male stars have in terms of "portability" is their oversized egos.- Stephen Basikoti FCCA
- Accountant
When a board realizes there is a need to change a leader, often it is because they feel the firm is in the dark. And in these circumstances, a star leader is likely to look like a light at the end of the tunnel as he would appear brighter than his competitors and with more pulling power.Nevertheless, what might appear to be a star at the end of the tunnel might simply be a shiny surface that is merely bouncing light from real stars that are not on pedestals. Success comes often from joint efforts of a team with members that fit well with one another. A leader plucked out of this team and transplanted to a new and strange team, possibly with suspicions and some issues because of feeling sidelined, may not have real stars to beam light on him. He previously appeared to be a real star when he was merely an image of real stars, the team members toiling incognito under him.
No wonder leaders who move with their teams seem to have more success as do women, who are more inclined to nurture others than compete with them.
The fact that some transplanted leaders do not succeed does not negate the fact that management performance is portable; it simply points to the uniqueness of the learning curve for each change.
Hence, star leaders must be chased with due diligence and, once hired, must be given sufficient resources and backing to succeed.
- Guy Higgins
- VP
Many very good comments. A couple of thoughts to add to the mix. Management is highly portable if people will take the time to learn their new company's management processes. Leadership (which is what I think we're really talking about) is also portable, but that is so much harder to actually move because we expect the new leaders to make an immediate improvement and then sustain continually improving performance. Very few (if any) leaders can walk into a new organization and immediately make large improvements through leadership -- you must learn the people you're leading first, and the larger the organization, the longer that takes (because of complexity, not numbers). I have watched far too many leaders walk in the door, make huge changes, overheat the organization and destroy its performance within two years.I also think that the "right answer" is neither hire solely from outside nor solely from inside -- insiders can make big improvements quickly, but outsiders bring new modes of thinking, both of those are good things -- and very few insiders think differently than their company.
- Paul T. Jackson
- Owner/consultant, Trescott Research
Gary Higgins above has most of it right. Leadership is portable. And Experience is, good or bad, useful in new situations.It would seem however that the company getting talent from outside forgets that it is the people inside who will need to carry out the corporate wishes in whatever change might be necessary...and a leader is tied to those people.
The truth is, new compensation should go to those inside who help make the changes, rather than the new guy/gal...with the new guy perhaps getting bonuses tied to goals achieved rather than high up-front high salary.
Finally, as I've written before, leadership is about allowing responsibility to those who are going to help make the changes needed, who then can buy into those changes and help decide what will work.
- Dr. S.A. Visotsky JD, LL.M.
- Chairman, Vitech Group LLC
C'mon. It's not rocket science. You groom your own stars, and weed out the weak. Those who can't, won't. Those who can, will. You have to have a rigid structure in your organization where everyone knows who is swinging the axe. The ability to delegate the wishes and whims of the Chairman, and his Board, is what makes a star, as far as CEO's go. Emotional people are poison, ice cold and detached are perfect star material. It's a business, the object is to win.- Fergus Barry
- Managing Partner, FBA
In many cases the star hire fails because the same rigor that went into their recruitment is not used in their on-boarding and they are not in anyway guided through the culture of the host company. The challenge is to prepare, plan and mentor the star to allow them to succeed in the new environment. If this person is at CEO level the board as a critical role in ensuring that the new hire works for the company and that involves investing time and money in giving them a fighting chance. Often the Board interest ends when the publicity of the new hires arrival ends.- Fergus Barry
- Managing Partner, FBA
In many cases the star hire fails because the same rigor that went into their recruitment is not used in their on-boarding and they are not in anyway guided through the culture of the host company. The challenge is to prepare, plan and mentor the star to allow them to succeed in the new environment. If this person is at CEO level the board as a critical role in ensuring that the new hire works for the company and that involves investing time and money in giving them a fighting chance. Often the Board interest ends when the publicity of the new hires arrival ends.- Chris Vaagt
- Owner, La Firm Change Consultants
What I miss in this discussion is the question: who is hiring outside hope-to-be-stars, and why.The hypothesis is that people who hire managers from outside have no hope to find them inside. This may be a poor sign about their own performance, certainly about the leaderhip culture of the firm itself.
Secondly, I would suggest that hiring from the outside is a sign of desperate (?) hope that "someone else" can turn the company around. It may also show disillusions about the ability to bring about change from within.
Another hypothesis ist that people from "within" may have less authority than those from the outside.
And: there is an industry which suggests that leadership form the outside is transferrable. Also there is a network of "managers" who help each other getting into interesting positions.
Whether successfull or not, depends on entirely other factors, it seems, and Boris Groysberg and others are pointing to these conditions. It might be worthwile to look at wether these factors do play a major role in the decisionmaking for selecting outside managers.
- Anonymous
Chasing stars is really an interesting topic and realized a common practice in an organization. In our context, this practice is more realized in the business and private sectors where there are much more competition. To remain competitive in the market, organization seeks and chase for the star. While chasing analysis of his/her organizational/department's performance and image in the market is generally analyzed carefully however the missing part usually is to analyze the organizational culture/environment and the team effort of that department/organization. That could be the result that the star performer of one organization may not be the star performer of another. However, It has been found that one star performer put his/her to chase and bring its (previous) team to work together as he/she is pretty confident on his/her team effort.- Bala
- Free Agent
Board and Top management often end up in a situation where they have to accomplish a big goal created by a crisis or an opportunity. Some think at that point, what brought them to the current level cannot take them to the next level, the new goal. The skills and talents required and available within the firm might not be matching to achieve the new goals. Then a star is identified and expected to do achieve this new goal. But Stars are stars because of the environment. It is not always easy to create the same environment in a new place. The ability of the Star and his team to understand the new firms culture and unique characters, quickly becomes an important component for achieving the predicted success.The best possible thing that the new star can do is to bring a team with which he played, which helps he / she to recreate the same environment and possibly achieve the new goals. Even this strategy might not always work. Because in business, there are lots of variables that are not in control of the firm or the stars. Timing is also equally important. One might want to call that as luck.
- Neil Jackson
- Director, Brereton Associates
If "star analysts who switched employers paid a high price (in performance, not compensation) for jumping ship relative to comparable stars who stayed put." what price is paid when stars join our boards?- Douglas R. Elliott
- CEO, TEQ Development LLC
Star chasing can be linked to a number of factors. First is the exultation of the merecenary business culture where personal brand trumps loyalty to organization. Second is the media saturation of all aspects of our culture where every action can become an example of life imitating art. Third is the 'Ockam's razor' character of our cognitive processes- a reductive logic that seeks singular, easy to practice solutions to complex problems.The media and markets follow stars because it is a simpler way to monitor and measure the complexity of businesses and economies. The fact that it is contra-positive in some circumstances and simply wrong in others does not deter the convenience of star mentality because what is there to replace it except uncertainty.
Uncertainty is taboo at any Board of Directors meeting. Directors are charged with making clear and certain decision paths for the shareholders they represent. Small wonder they use 'star power' hiring strategies to meet expectations of the media, markets and shareholders.
Expect more and not less starchasing from directors as our economic uncertainties grow.