Article: What if your superstar performers resign?

Life @ Work

What if your superstar performers resign?

Organisations must move away from the conventional wisdom that only a handful of people have the talent that can drive organisational success
What if your superstar performers resign?

Organisations can get 90 per cent of their peop le to perform like the top 10 percent by harnessing their pa ssion and the talent


In 2001, McKinsey researchers came up with the landmark book, The War for Talent. In a nutshell, they said companies that win the war for talent will gain a competitive advantage, but they had better start gearing up for the fight immediately, because talent is scarce and there simply isn’t enough of it to go around. Since then, many organizations have adopted a talent strategy that goes something like this:

“Tie talent strategy to business imperatives and find the best people to execute flawlessly. Invest in the best - grow and engage them, so they perform great and stay. In the meantime, train and motivate the rest of the workforce while looking for other “A” layers ideally within the company, but if not, attract the best people who typically come from the best schools and organizations.”

Are your stars delivering?

Is this ‘focus on the best people’ right? A study conducted by Boris Groysberg sheds light on the performance portability of star talents. He studied the careers of 1,000 star analysts at Wall Street and how they performed when they moved to other firms. The results were astounding. The majority of these analysts who changed firms suffered an immediate and lasting decline in performance. Their earlier excellence appears to have depended heavily on their former firms' general and proprietary resources, organizational cultures, networks, and colleagues.

Are your stars staying?

Here is another answer to the question. Eighteen months ago, a consultancy company hired some of the brightest students from the best schools in India. The company invested attention and money to grow and engage this cohort. In return, they delivered sterling performance! So, after 12 months on the job, they received an 18-month bonus and 75 percent of them were promoted. However, members of this cohort had other aspirations. One was writing a novel and the other planned to go into the family business. Less than 2 years from when they were hired, only 25 percent of the cohort are still working for the company. Ironically, the ones who left were also the ones who were most valued and rewarded.

And what about the rest?

Organizations assess their people for potential and talent, and the chosen ones become members of high-potential talent pools. Let me elucidate the problems that organizations get entangled with, when they select people to form talent pools. Talent pools work when the assessment is accurate, employees believe they had a fair shot at being chosen, and those not selected continue to be engaged, plus get other opportunities to join the pool. However, not many organizations get this right. Challenges, which include differentiating charisma from substance, ensuring accurate assessments and forecasting the type of talent needed in an unpredictable operating landscape, mean many organizations recognize that their selection process is not flawless. But the problem lies not in an imperfect selection process, but rather that organizations elect to proceed with talent pools because they underestimate the cost of an imperfect selection process. Here are just two of the consequences. First, organizations miss out on highly talented individuals who leave for greener pastures or are implicitly asked to contribute as “B” players when they can and want to perform like the top 10%. Second, a divide between “high-potentials” and the “B” players saps morale, impedes collaboration and nurtures negative energy, is created. Here is one “B” player’s reaction to a company’s recent hiring of MBAs from Ivy League schools and subsequently, the formation of an “MBA” talent pool:

“I know I don’t have a prestigious MBA, but that is because I don’t have the money to pay for one. It doesn’t mean that I lack ambition or ability. I want a chance to show what I can do. I want the same opportunity these new hires are getting, because I know I am more loyal and can do better than them.”

Crowded out by the company’s focus on the MBA talent pool, this person eventually left to join a competitor as its general manager of sales & marketing, and proceeded to do an outstanding job to the dismay of her former employer.

The three examples remind us to reconsider our assumptions - that star talents will automatically continue to perform at the same level when they move to another organization; they are contented to stay and make a meaningful contribution to their organizations if they are properly rewarded; and the cost of creating a divide between the stars and the rest of the employees is high. But most importantly, the examples highlight that placing all the chips on “star” talent is irresponsible.

90-10 Talent Management

While I am not advocating that stars are unimportant (because they are!), for great people to perform at their peak, they must be surrounded by other great people, enabling cultures and powerful processes and systems. So, rather than chasing a finite, expensive and questionable pool of star talent, organizations should re-channel their efforts to find a source of talent that is plentiful, inexhaustible and cost effective. Specifically, organizations must figure out how they can get 90 percent of their people to perform like the top 10%. In other words, organizations must move away from the conventional wisdom that only a handful of people have talent that can determine organizational success - to a new paradigm and approach that embraces a belief that everyone has talent and that this talent can be harnessed to drive organizational success.

Organizations that have adopted this approach share one common belief that people are at their greatest when three things happen:

They love what they are doing (passion).
They are great at doing what they love (talent).
They are in jobs that allow them to do what they love and are great at (application).

Organizations can create a rich, renewable source of talented people by harnessing the passion and the talent of “all” their people for productive application. When this happens, people are in “the talent zone” where they have jobs that bring together what they love to do and what they are great at doing. This positive energy ripples across the entire organization and is translated into positive employee engagement scores and sustainable business results.

As we reviewed the talent processes of these organizations, we discovered that they look remarkably the same as everyone else’s. So, what is the X-factor that differentiates them from the rest? Alas, I have run out of space, and perhaps that is another story to be written - to explore the X-factor that enabled organizations to ensure that 90 percent of their people to perform like the top 10%.

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Topics: Life @ Work, Watercooler, Performance Management

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