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Live blogging from the Willowcreek Leadership Summit, Part 1
By Jeremy | August 11, 2006
Session 1, Dr. Ashish Nanda (Harvard MBA Professor): "The Risky Business of Hiring Stars"
Willowcreek Case Study at Harvard controversial
"Create disequelibrium to force people to learn afresh." Thesis + Antithesis => Synthesis
Stars = high capacity people
Not always a good idea to hire stars from other organizations. Research done with stock analysts (profession where people are assumed to carry skills with them)
Q1: Group analysts into stars/nonstars. Who moves more? Nonstars
Q2: Long-lived stars/new stars. Who moves more? New stars move 2x as often. Subset: shooting stars move most
Q3: Performace of stars after they move? Declines over 5 yrs.
Q4: Performance of other people in new dept? Declines
Q5: Stock market reaction to new hire? Declines. Call it the "Winners curse"
Q6: Why? A star is a star not just because of skills, but also the platform/ system/ organization/ team. Hiring stars underestimates the value of the platform around them.
Q7: When does performance decline most? When they're brought in to strengthen an existing department.
Transfering a star is like doing an organ transplant. Performance declines most when they move to lower status organizations (as opposed to peer or higher status orgs). Status is a proxy for platform.
Only in a few instances did the performance not decline, only where: 10% of value created in hiring; 90% of value created is post hiring integration. Like transplant. Must be socialized into the org. If you must hire a star pay attention to post-hiring integration.
Lessons:
1. If you must hire a star, pay attention to the team that surrounds them. Consider hiring the entire team/department.
2. Hire for three reasons: strengthen existing team, replace someone, or start something new. Best to hire outsiders if starting something new. Worst if hire to strengthen existing team.
3. Three strategies:
A. Strengthen existing team from within - Grow stars internally and hold onto them.
B. Don't worry about developing internal people. Hire best from outside
C. Develop internal people; when they get to expensive, let them leave and replace them.
Strategy A works best for sustainable excellence.
When people leave good organizations, they leave as ambassadors of the organizations. At the time of exit, let them leave with a positive experience and goodwill. Keep relationship alive. Create a community/network that extends beyond the organization. E.g. McKinsey consultants.
Extra Credit: Service Profit/Success Chain
[Too many graphs to translate for the blog - a 9-week lecture summarized in 3 minutes]
+ Relationship between loyalty and success is convex
+ Relationship between loyalty and satisfaction is also convex
+ Goal is apostles
Value => Satisfaction => loyalty => success
Value = Experience - expectations
+ Right staff produces consistent service
Cost of staff turnover = disastisfied customers
+ Leaders must create positive work environment
staitisfied staff => loyal staff => value => satisfied clients => loyal clients
Topics: ashish nanda, bill hybels, leadership, mentorship, willowcreek | No Comments »
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