Why You Shouldn't Hire Superstars

At the heart of a great company, lies great people. Common wisdom, then, says your company needs to seek superstars, recruit them, and watch them fatten your profits. Logical, it seems. Yet:

Common wisdom is wrong, yet again, and again, and again, and again.

Hiring superstars won't drive your company to become Wall Street's next angel. The reasons:

1. Superstars = expensive.

   Seek a superstar, and expect to pay a bundle. Financially, and the other stuff: feelings of entitlement, benefits, environment necessities, yadda, yadda, yadda. Instead of recruiting ten up-and-comers, you're paying a bundle for one that probably won't net you the results you seek.

2. Superstars' performance falls dramatically after they arrive.

   Familiar with any sport? When superstars arrive, their performance falls dramatically. It's happened to Shaquille O'neal, Michael Jordan, Jerry Rice, Joe Montana, Ronaldo, Zinedine Zidane, among the several others. The reason? The people became superstars elsewhere because they thrived in the right environment; they became superstars because they had fit the mold, the structure, and the culture of their organization. Since your company won't have the same environment, superstars probably won't achieve the same results in your company. Harvard's Ashish Nanda and Nitin Nohria studied the effects of hiring star performers, explaining that superstars' performance suffers after arriving at a new company:

   Performance depends on both her personal competencies and the capabilities, such as systems and processes, of the organization she works for. When she leaves, she cannot take the firm-specific resources that contributed to her achievements. As a result, she is unable to repeat her performance in another company; at least, not until she learns to work the new system, which could take years.

3. Superstars lack loyalty.

   It's like Bob cheating on Girlfriend Jane to get with Pretty Sally. If Bob meets Jessica Alba, Bob will dump Pretty Sally, and go for Jessica Alba. When you're hiring superstar employees, you're probably offering them a high compensation package to attract them. If money lures them, what will happen when your competitor offers them a higher salary or other benefits?

4. You demotivate your current crop of talent.

   Jimmy's been working his butt off for your company. Instead of promoting him, you bring in a superstar -- give him power, authority, extra resources and benefits. What does that signal to Jimmy? Importantly, what does that signal to your other employees? When you bring in a superstar, you tell your company that performance doesn't matter. Entitlement does. If your company sends a signal that merit sucks, you'll watch your company's performance slowly deteriorate.

What should you do instead?

• Forget superstars.

  They're expensive. Sure, a small percentage could very well help your company, but most won't. Instead, look to potential superstars. We affectionately call them Poperstars. They're hungry. They're wanting to change the world. And importantly, they'll work their butts off at a tenth of the price of a superstar.

Then once you get Poperstars, focus on growing that talent. Says Nanda and Nohria: "In business, the only viable strategy is to recruit good people, develop them, and retain as many of the stars as possible."

Poperstars rock.

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