Why Hiring a Superstar Won't Improve Your Business

The demise of superstar CEOs provides a valuable lesson to those who think success is transferable across companies.
Business and Workplace Author, Speaker, and Consultant, AlexandraLevit.com
April 12, 2012

I don’t follow baseball.

So I was surprised when I got sucked into a recent Harvard Business School article by Carmen Noble detailing Red Sox general manager Theo Epstein’s two-year campaign to acquire star performers with extraordinary multimillion-dollar, multiyear contracts.

The piece describes one of the most expensive talent hunts in baseball history, starting with the signing of veteran pitcher John Lackey from the Anaheim Angels. Other high-profile hires followed, and baseball aficionados hailed the 2011 Red Sox as one of the greatest teams of all time.

To say the team didn’t live up to expectations would be an understatement. In September 2011, the Red Sox lost 18 of its last 24 games and lost a shot at the playoffs. The glittering, star-studded team was a failure.

CEO superstars no more

The fall of superstars is common in business too. Just look at the number of CEO departures last year, like Leo Apotheker at HP, Carol Bartz at Yahoo!, Ernest Lieb at Mercedes-Benz and Tom Williams at Reader’s Digest, to name a few.

This year is not looking much better. According to placement firm Challenger, Gray & Christmas, CEO departures are up 17 percent from a year ago, with a total of 227 departures tracked through the first two months of 2012 compared to 187 at the same point in 2011.

The most common reason cited is disappointing performance, which, in most cases, came as a surprise. The star, after all, was hired because he had a track record of extraordinary contributions at previous organizations. Why wasn’t he able to replicate that success here?

Assets are non-transferable

Boris Groysberg of Harvard Business School thinks he has the answer. In his book, Chasing Stars: The Myth of Talent and the Portability of Performance, Groysberg claims qualities that make an individual a superstar are not necessarily transferable from one organization to the next.

Groysberg compared 1,000 Wall Street investment analysts who were ranked as superior by Institutional Investor Magazine with analysts who did not receive the magazine’s top ranking.  He found when analysts moved from one bank to another, their rank changed dramatically, indicating that the institution often plays a greater role in performance than individual talent.

Culture is king

A superstar often flourishes because of a perfect mix of natural ability with a supportive environment. She may also, for example, have honed skills, received training, formed partnerships and/or basked in a culture that contributed to her outstanding performance. Superstardom is not as portable as we would like to believe, and moving a star to a new situation with none of these factors may prove disastrous for everyone.

Before hiring a superstar away from another organization, Groysberg recommends thinking strategically about what makes that person great. If the star is succeeding because he is immersed in a fantastic culture and your own culture can’t compete, you will be setting him up to fail.

Learning is a must

If you are going to risk hiring someone else’s star, don’t let her convince you she doesn’t need a comprehensive onboarding program. Past success can blind us to the fact that we must always be learning and adapting. Properly acquainting her with your people, processes and protocols will give your superstar the greatest chance of continuing her upward trajectory.

Alexandra Levit is a former nationally syndicated business and workplace columnist for the Wall Street Journal and the author of Blind Spots: The 10 Business Myths You Can’t Afford to Believe on Your New Path to Success.  Money Magazine’s Online Career Expert of the Year, she regularly speaks at organizations and conferences on issues facing modern employees.

Illustration by Russell Christian