Tuesday, March 11, 2008

The High Cost of Super Stars

I was reminded by today's HBR Management Tip of the Day of the high price of bringing super stars into your organization. First, you have the premium that you have to pay in order to lure them away from their present job (and enough to keep someone else from luring them away from you in the near future). Then, you have the internal cost of envy and frustration (from incumbents who think they are as good or better than the new guy, but being paid a fraction of the salary). However, today's Harvard Business Review tip reminded me of the statistics on super star failure. When they join your company they no longer have the network that they had at their old job (their formal and informal go-to team). They no longer have the same software, processes, policies, and culture that they learned to optimize.

Individual performance drops by 20%, which frustrates the super star and your company.

The actual losses mount as morale declines, roadblocks are intentionally placed in front of the super star, Wall Street punishes you for a highly visible bad hire, and the super star eventually leaves in very public fashion.


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