Risky Business of Hiring Stars

The case talks about how the battle for the best and brightest people has been heating time
and again. The battle of looking for the brightest of the lot is such that, you will go all guns
blazing and you will most likely be looking for the first-rate talent in the ranks of your
competitors. There are high chances, you are banking upon the idea of recruiting from outside
your organisation, since developing people within the firm takes time, money, and serious toil
of your energy.
Authors who have tracked the careers of some high-flying and successful CEOs, Software
engineers, scholars, and top-notch professionals, say that the top performers slip down after
leaving one organisation for another. They have also supported their thoughts with some
reasons like, they find it difficult to adapt to the culture of the new organisation, sometimes
the working style is also an issue.
To study this phenomenon in greater detail, the authors analysed the ups and downs of more
than 1,000-star stock analysts, a well-defined group for which there are abundant data. The
results were striking.
After a star employee moves, not only does his performance descend but so does the
effectiveness of the group he joins--and the overall value of his new company. Moreover,
transplanted and uprooted employees don't stay with their new organizations for long, despite
the astronomical and whimsical salaries firms pay to lure them from their rivals.
Most companies that hire the best people (star here) overlook the fact that an executive's
performance is not entirely transferable and relatable because his/her competencies inevitably
include company-specific skills. When the star employee leaves the old company for the new
one, he cannot take with him many of the resources that contributed to his achievements.
As a result, he is unable to secure the position and the tag of a star in another company--at
least not until he learns to operate with the new system, which could take years. The case
sites some examples like- approximately 50% of the researchers performed badly a year after
they left their organisation. The famous James Cunningham was ranked as one of the best
chemical analysts during 1983-86, he too got dropped to the third place as soon as he left. So
even the best people in their sector/industry fail sometimes because of the transition.
Goldman Sachs’s strategy of successfully dealing with hiring and dealing stars has been
quoted in the end, how efficiently they made the hiring decisions
The authors come to this conclusion that companies can never gain a competitive advantage
or successfully grow and flourish by hiring stars from outside. Instead, they should be
focusing on cultivating talent from within and should do everything possible to retain the
employees they have helped, in becoming a star. Organisations shouldn't be battling the star
wars, because winning could be the worst thing that happens to them since they might lose a
lot in the process of becoming world-class.