Question: You have advised managers to “Let Your Best Talent Go.” That’s not my company’s problem. The VP I report to wants us managers to hire stars to fill key jobs. I’ve got good up-and-comers who’d love a chance at a key role I’ve got open in my department, but even HR wants me to go find a hotshot outside the company. I don’t have any problem managing a star, but I’d rather reward one of my best people with this job. Is it really worth poaching a prima donna?
Nick Corcodilos: Not in my experience. I think it’s a fallacy. Star performers aren’t recruited.
I’ve had the same problem with clients who demand hotshot candidates. They don’t want a new hire with potential because they don’t know how to cultivate potential.
Economically, these companies are hurting themselves. A star comes with a premium price tag, just like that high-flying stock your broker recommends. But smart investors look for discounted assets that have a lot of upside potential. That’s where the biggest gains are. For employers, this means mentoring and cultivating high-potential talent. It requires planning, patience, and an investment. Few employers want to be bothered—and I don’t think many employers even know how to do it. They often wind up paying top dollar on a human asset whose value is more likely to drop than to go up.
Bryan Garner, writing in Wired, reviews some research on companies that hire rock star talent in “Forget Stars—Companies Do Best When They Grow Their Own Talent.” He cites JC Penney’s experience with Ron Johnson (see “Not All Oreos Are Round: Have Trust In Market-Focused Reinvention”) and runs through the litany of other ill-fated examples.
Studies at Harvard and Stanford tell a cautionary story about what often happens when companies recruit—or poach—top talent. Your doubts about your company’s hiring strategy are well-founded. The Wired column quotes Stanford organizational behavior professor Jeffrey Pfeffer: “People’s performance is a function not just of their individual abilities but also of the systems in which they work.”
That is, success often hinges on the environment an outstanding performer works in. If you’re hiring someone you think is going to instantly beef up your organization’s performance, think again. When a competitor recruits a superstar but can’t provide the kind of team and system that supported the person, the investment proves to be a poor one because the real problem isn’t lack of talent; it’s often an organization weakness. Garner cites engineers that Apple recruited away from Tesla.
You’re right: It’s usually better to develop your own stars from the bench of talent you’ve been cultivating. The Wired article says surveys of “talent portability” done at Harvard showed that “about half” of the star workers reviewed didn’t perform very well within a year of switching employers. (Interestingly, women making a change performed better than men.)
You can take talent out of a company, but you can’t always replace the impetus a company gives a star to succeed somewhere else. I’d go make the case to your management that you’ve got more data on which to base a hiring decision when you promote from within because the factors that confer star status in another company are virtually impossible to identify or replicate.
I don’t think it’s worth poaching talent. The best managers I know don’t recruit stars. They cultivate stars of their own.