Poaching Stars is a Terrible Idea to Improve Performance

In an effort to improve performance we often turn to the simple answer of trying to hire a star from another organization. This sounds like a great idea, is hard to argue with, and offers the promise of an instant performance boost.

In practice, most of the benefits turn out to be illusory.

The question is why?

One reason is that we think of the person as an isolated system when in reality they are not. The surrounding team, culture, and environment can amplify their success.

In his wonderful book,  Think Twice: Harnessing the Power of Counterintuition, Michael Mauboussin explains:

A star’s performance relied to some degress on the people, structure, and norms around him—the system. Analyzing results requires sorting the relative contributions of the individual versus the system, something we are not particularly good at. When we err, we tend to overstate the role of the individual.

This mistake is consequential because organizations routinely pay big bucks to lure high performers, only to be sorely disappointed. In one study, a trio of professors from Harvard Business School tracked more than one thousand acclaimed equity analysts over a decade and monitored how their performance changes as they switched firms. Their dour conclusion, “When a company hires a star, the star’s performance plunges, there is a sharp decline in the functioning of the group or team the person works with, and the company’s market value falls.” The hiring organization is let down because it failed to consider systems-based advantages that the prior employer supplied, including firm reputation and resources. Employers also underestimate the relationships that supported previous success, the quality of the other employees, and a familiarity with past processes.

What's happening a common mistake — we're focusing on an isolated part of a complex adaptive system without understanding how that part contributes to the overall system dynamics.

hat's For more information read the Harvard Business Review article: The Risky Business of Hiring Stars and check out The right number of stars for a team.