chasing stars

Business Book Summaries® August 30, 2011 • Copyright © 2011 EBSCO Publishing Inc. • All Rights Reserved

August 30, 2011

Chasing StarsThe Myth of Talent and the Portability of Performance

Boris Groysberg

©2010 by Princeton University PressAdapted by permission of Princeton University PressISBN: 978-0-691-12720-0

IntroductionIn the knowledge economy, companies take it for granted that they must employ the most talented performers to compete and succeed. Many firms try to buy stars by luring them away from competitors. However, in Chasing Stars, Boris Groysberg shows what an uncertain and disastrous practice this can be. After examining the careers of more than 1000 star analysts at Wall Street investment banks and con-ducting more than 200 interviews, Groysberg comes to a striking conclusion: star analysts who change firms suffer an immediate and lasting decline in performance. Their earlier excellence often depends heavily on their former firms’ general and proprietary resources, organizational cultures, networks, and col-leagues. There are a few exceptions, such as stars that move with their teams, and stars that switch to better firms. Female stars also seem to perform better after changing jobs than their male counterparts do. In the end, Groysberg suggests that most stars who switch

firms turn out to be meteors, quickly losing luster in their new settings.

Groysberg also explores how some Wall Street research departments are successfully growing, retaining, and deploying their own stars. Finally, the book examines how its findings apply to many other occupations, from general managers to football play-ers. Chasing Stars offers profound insights into the fundamental nature of outstanding performance. It also offers practical guidance for individuals on how to manage their careers strategically, and for compa-nies on how to identify, develop, and maintain talent.

Unexamined Reliance on StarsMany knowledge-based firms view their employees as their most valuable resource. At such companies, managers work hard to attract the best and the bright-est. When companies do find first-rate talent, they are often willing to offer those stars huge salaries, sign-

Chasing Stars Boris Groysberg


ing bonuses, and stock options—in short, whatever it takes. The value of stars is a powerful idea, one that numerous books and management gurus have popu-larized over the past decade by invoking a so-called “war for talent.” This assumption is the cornerstone of many companies’ people-management strate-gies. In essence, the star hypothesis makes sense. But reliance on stars is a highly speculative managerial policy, because not much is known about what drives outstanding individual performance. Both stars and their employers often assume that outstanding per-formance is the result of a combination of innate talent and good education preparation. However, little clear-cut evidence supports or refutes prevailing beliefs about why some people excel.

Another hazard of an unexamined reliance on stars is that the prevailing belief of the portability of talent is actually a “double-edged sword.” For a particu-lar company, a prize-winning scientist, for example, might be a unique resource, but unless he or she is deeply embedded and loyal, the attractiveness of his or her talents makes that scientist an unreliable source of a sustainable competitive advantage. In other words, the company never knows when another com-pany might lure the scientist away. On the other hand, the other company might attract the scientist to gain his or her skills and experience but they run the risk of the star scientist becoming a comet, quickly fading out in a new setting. The question of the portability of talent offers a promising point of entry into the longstanding debate about the fundamental nature of exceptional performance. Groysberg examines whether stars’ performance is indeed portable from one employer to another in the hope of discovering something fundamental about the origins of perfor-mance.

Knowledge Workers as Free AgentsOver the last few decades, an increasing number of Americans have been employed as knowledge workers. These employees view themselves as free agents with portable skills. They attribute their job performance largely to their own talent, skills, and knowledge, and thus regard themselves equipped to be equally productive in any appropriate workplace. This outlook is endorsed and promulgated by schol-ars and authors of business research. The free-agent outlook assumes that skills are portable and can be put to use in a series of jobs. The validation and mar-

Key Concepts• Companies should not assume that finding

and buying the best and brightest perform-ers will ensure success. Often, a star’s perfor-mance declines after moving to another job.

• Companies must perform due diligence to ensure a good fit between the firm and the star in order to preserve the star’s perfor-mance.

• Hiring a star should be a strategic decision, undertaken to fulfill a specific operational aim. Firms should guard against overpaying for talent, and not underestimate the risk of demoralizing the existing employees when the star comes onboard.

• Female stars are cautious when evaluating new offers and tend to more thoroughly re-search the new role to ensure the company is an advantageous environment for women. Star women who change employers do not experience the decline in performance that star men do.

• Team-specific processes and relationships count as significant factors for a star’s per-formance. Therefore, when stars move in teams to other companies, their performance is more likely to be sustained.

• Ambitious professionals should stick with the highest-quality organizations. Many highly talented people will trade portability for a nurturing environment.

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Information about this book and other business titles:pup.princeton.edu

Related summaries in the BBS Library:Talent

Making People Your Competitive AdvantageEdward E. Lawler III

pup.princeton.edu



ketability of a person’s skills derive not only from the employee-employer relationship but from exter-nal networks of clients and peers. Thus, knowledge workers have been repeatedly advised to acquire a portfolio of flexible skills transferable to other work situations and to cultivate extensive external networks.

This free agent knowledge worker view has produced a fundamen-tal shift in prevailing employment patterns from long-term employ-ment to short-term transactional relationships between knowledge workers and their employers. This constant transferability of talent is alarming to employers in businesses, especially con-sidering the bond between top performers and their clients renders an individual’s client base mobile as well. As a result, firms have become increasingly will-ing to poach top talent from rival firms. In this new

Over the last few decades, an increasing number of employed Americans have been…knowledge workers. And the growth of this employment sector is expected to continue: the Bureau of Labor Statistics reports that professional occupations will grow most quickly and add more jobs than any other employ-ment category in the United States between 2012 and 2014.

About the AuthorBoris Groysberg is the Thomas S. Murphy Associate Professor of Business Administration in the Organizational Behavior unit at the Har-vard Business School. He currently teaches the Managing Human Capital course in the second year elective course of the MBA program and in several Executive Education programs. Groys-berg’s research focuses on the challenges of managing professional service firms. In par-ticular, his work investigates how a firm can be systematic in achieving a sustainable competi-tive advantage by leveraging its employees. He examines how firms develop, hire, retain, and utilize star knowledge workers. Groysberg has won, for two consecutive years, the Strategic Management Society PhD Fellowship (Booz Allen Hamilton/SMS fellow) for his research on talent management. In 2001, he was also named runner up for the Best Conference Paper Prize. He holds a DBA in Business Policy from Har-vard Business School and a bachelor’s degree in accounting from New York University.

environment, companies must find ways to hire and retain workers who are increasingly far more commit-ted to an occupation than to an employer.

Not all researchers agree that all of knowledge work-ers’ skills are portable. Some distinguish between two types of human capital: general skills, which are of potential value to numerous employers, and firm-specific skills, which are useful only to a single employer. General skills, such as literacy or initiative, raise workers’ productivity at many potential places of employment. Firm-specific skills, such as mastery of a proprietary computer system, increase workers’ productivity at only one firm. Those who assign little importance to firm-specific human capital tend to assume that a given worker will be equally produc-tive in comparable workplaces. Those who emphasize the firm-specific component of human capital argue that changing employers will cause a decline in per-formance until an employee develops skills specific to the new firm.

The performance of any worker is made up of a mix of innate, acquired, and organizational capabilities. But when so much strategic advantage can be gained by hiring, developing, and retaining stars, the question of how the performance of stars differs from that of the merely competent is a matter of great interest. In everyday psychology, the notion that some people are born with more talent than other is a firmly ingrained idea. Success is commonly thought to be the result of personal factors, such as intelligence, creativity, or talent. If a star’s performance is predominantly a function of his or her individual talent, or of learned but generally applicable skills, it is by definition read-ily portable to another employer.

If the performance of star employees depends on resources and unique characteristics of the firm, and is thus attributable as much to the firm as to it stars,



such a firm is well positioned to create a sustainable competitive advantage. The difficulty lies in deter-mining how much of a star’s performance lies in his or her own innate talent and unique skills and how much relies on the resources of the company he or she works for.

In the absence of hard answers to questions about the drivers of outstanding performance, employers tend to act on the assumptions embodied in their corpo-rate cultures. Companies that embrace the view that knowledge workers are free agents with thoroughly portable skills tend to deemphasize company-specific skills. Instead of developing their own stars, they believe that they can simply hire talented individuals from an efficient labor market. Nevertheless, the ques-tion remains: Are those who excel in the workplace truly mobile free agents with highly portable skills, or is their performance primarily driven by adept use of the resources of the specific organization in which they thrive? The answer to this question has profound implications for how organizations hire, develop, retain, compensate, and deploy their best performers. Moreover, it has a direct bearing on the decisions for individuals concerning their own careers choices.

A Look at Wall Street Security AnalystsGroysberg focused his research on the capabilities of star performance in the security analysis profession. These researchers and their Wall Street employers hold a strong prevailing belief in free agency, and thus in the portability of outstanding performance. They also exhibited six other features that positioned them as excellent subjects of his research:

1. The performance of analysts is assessed annually using clear standardized measures and is publicly reported.

2. The number of analysts is relatively small (about 10,000), making it possible to collect reliable data on the entire population of analysts instead of relying on statistical data.

3. Due to the existence of rich, thorough, and trust-worthy data, analysts’ achieve-ments could be examined at different levels: demographic, de-partmental, firm, sector-specific, and at different points in time.

4. Security analysts encounter few external distractions when they change employers, mostly because a very large majority of these analysts continue to live and work in New York, continue to focus their analysis talents in the

securities of one industry, and dealt with the same clients they served when working in the previous firm.

5. Virtually without exception, top jobs on Wall Street are filled with the help of search consul-tants, who have an unusual degree of embedded-ness in the industry and acute insight into indi-vidual and environmental factors that condition the fit between an analyst and a new employer. Their role is to enhance the portability of perfor-mance.

6. Star analyst’s job changes are reported promi-nently in the financial press, making it possible to capture the market’s reactions to such moves.

By analyzing what happened to the job performance of star Wall Street security analysts when they moved from one firm to another, Groysberg’s research offers new insight concerning the nature of work perfor-mance among knowledge-based professionals.

Star security analysts claim they have portability, because they can carry their relationships with the companies they cover and the clients whose informa-tional needs they fulfill. They maintain relationships with managers of the companies they track, including CEOs. It is rare for a star analyst to lose a client after transferring firms. Analysts also seek out relation-ships with suppliers and other sources of information, including relationships with the press to promote

A brilliant, Nobel-prize winning scientist may be a unique resource, but unless he has firm-specific ties, his perfect mobil-ity makes him an unlike source of sustainable advantage. [Does] his productivity [have] to do with the specific team of research-ers of which he is a part? Does it depend on his relationship with talented managers who are exceptionally adept at manag-ing creativity? Does it depend on the…unique culture of the firm?



their expertise. The type of training analysts receive is general enough to apply to the work done at other firms as well.

Star analysts that switch firms often leave behind relationships with other in-house professionals upon whom they have become interdependent. These rela-tionships are essential to performance and contribute materially to analysts’ success. Access to other capable colleagues who cover a closely related sector makes an analyst’s research more insightful. Also, strong senior analysts need the support of strong associates and a strong sales force. When a star analyst moves to another firm, the relationship with junior analysts is lost and must be rebuilt. Relationships with company traders who buy and sell stocks and provide the ana-lyst with valuable information are broken. Research directors in firms have an enormous impact on the performance of star ana-lysts, because they provide direction and support, and they decide how the analysts allo-cate their time, how to staff the research department, and how to compensate each analyst. Several other relationships and channels of support are interrupted when a star analyst moves. No longer can they rely on the help and advice of portfolio strategists, technical ana-lysts, and the investment committee. Training that the analysts received for firm-specific products and offer-ings is not transferable to their new roles in another firm.

Groysberg’s research revealed that star analysts who switched employers paid a high price for leaving: overall, their job performance plunged sharply and continued to suffer for at least five years after moving to a new firm. The evidence refutes the prevailing belief in the industry that analysts’ skills are thor-oughly portable—independent of the particular firm where they work—and that analysts can move with-out suffering a decline in performance. The research points to a few lessons for star analysts and other exceptional knowledge workers to keep in mind:

• Individual star performers have a strong and per-sistent—and potentially career-damaging—ten-dency to undervalue the importance to their suc-

cess of their employers’ capabilities and resources.

• When contemplating a move, stars should try to undertake a dispassionate and systematic as-sessment of the drivers of their past performance before taking any other steps. They should weigh an increase in compensation against the probabil-ity of a future performance decline.

• These individuals should also conduct a clear-eyed assessment of the quality of their current firm when compared to that of likely future employers. A firm with fewer resources and less accomplished colleagues might have a debilitating effect on performance, no matter how talented the star is or how hard he or she works.

Do Firms Benefit from Hiring Stars?Many articles and books promulgate the existence of a war for talent and state that the increasing tech-nological and knowledge-based tilt of advanced economies is creating an army of footloose free agents with portable skills. Some writers proclaim that the most talented employees move most often, and the kind of company-specific knowledge that was once valuable to both employer and employee no longer retains much value for either party. Because talent is flighty, managers need to get talented employees up to speed fast so they can begin contributing to the firm. An alternative scenario asserts that firms should lure stars with attractive offers and retain them with individualized career customization.

Post-industrial economies are no doubt increasingly dominated by knowledge-based work. Many com-panies assume that if their products or services are knowledge-dependent that they should stake their competitive advantage on the talents of their employ-ees. But the evidence of the study documented in

[T]he stock market viewed [announcements of departing star analysts] as negative but not significant events. We found that [announcements of the acquisition of star analysts by invest-ment banks traded on the New York Stock Exchange] were accompanied by an immediate average loss in the value of the bank’s stock of 0.74 percent….A loss of three-quarters of a percentage point over a three-day period…corresponds to an immediate reduction in investors’ equity averaging $24 million.



Chasing Stars suggests very different conclusions about how to pursue competitive advantage in a knowledge-based field. The author’s evidence points out that building capacity in a company by hiring stars might not work well, and could result in three undesirable outcomes:

1. The performance of the star can suffer in the wake of the move.

2. The much-publicized outside hire can cause resentment in the department, which can result in a breakdown in morale, teamwork, and commu-nication.

3. The firm might find that it paid more for its new star than is justified by the results.

In his study, Groysberg found that the most active seekers of star analysts were firms that were unsuc-cessful at developing their own talent or less interested in doing so than in pursuing short-term performance. Star analysts tended to quit their jobs at a point in time when their firms of origin were underperforming the market. The acquiring firms attempted to better their performance by stealing talent from firms expe-riencing significantly worse performance. Research departments that lost talent were anxious to replace it, but that effort usually took months. Other analysts were asked to step in to cover the gap caused by their departed colleagues, which concerned clients and threatened to downgrade the rankings of the over-worked analysts. In this type of job market, bidding wars for star performers raised the cost of filling these positions to dizzying heights. Typically, a firm over-estimated the value of an outside star and paid more for the star’s services than he or she would ultimately

contribute to the firm’s performance. Additionally, the study found consistent evidence that investors viewed were weary about such appointments, and perceived them as value-destroying.

Ultimately, the research study suggests that compa-nies should re-evaluate their practices for stars. Their

hiring should be a strategic deci-sion, not a knee-jerk reaction to a perceived opportunity or emer-gency. In general, a firm should contemplate hiring a star only to fulfill a specific operational aim: to raise standards or introduce fresh ways of doing business. Even with this clear-cut goal in mind, a firm must watch out for the potential corrosive effects that a newcomer has on morale and dedication from other employees. It is imperative

for a firm to perform pre-acquisition research. Com-panies should develop accurate projections of growth and profit margins to ensure anticipated gains from hiring outstanding performers for the company, not just an advantage for the stars themselves.

Firms of Origin and Portability of PerformanceThe phenomenon of performance portability is closely linked to questions of retention and turn-over. Efforts by firms to keep employees from leaving often go hand in hand with practices that lessen por-tability. Particularly in a fluid and opportunistic job market, non-portability and retention intersect when some analysts recognize that they are better off, and perform better, if they stay. Firms that keep employees embedded in firm-specific processes limit their employees’ ability to achieve star performance elsewhere. Conversely, those companies that focus less on firm-specific processes tend to have a higher turnover rate of high performers. However, pro-moting non-portability of performance is rarely an explicit corporate goal. Firms that employ knowledge workers seek to make the most of those employee’s valuable skills, and different approaches to doing so happen to promote or limit portability. Fundamen-tally, the performance of stars is more likely to be portable when the new employer uses an equivalent process model as the company of origin. When the way a company manages and develops its employ-

[T]he research department at Lehman Brothers excelled at gen-erating firm-specific human capital. During its heyday in the late 1980s and 1990s…, Lehman essentially mounted a ‘triple-threat’ department: in hard, soft, and product-based ways, it built a team of analyst whose skills were firm-specific….[A]nalysts were encouraged to work in teams, and to collaborate across sectors. …Lehman also adopted proprietary information systems…The result was a culture and a set of work practices that analysts knew they would find at no other firm.



ees reinforces the idiosyncratic characteristics of its products, processes, structures, systems, and cul-ture, it becomes difficult for stars to achieve similar performance levels in another company. Firms can benefit by strategically communicating to employees how much value the company’s products, services, culture, and processes add to their employees’ perfor-mance. Employees often over-estimate the portability of their performance, and by reinforcing their notion that their performance is dependent on unique char-acteristics of their employer, the company helps them recognize that they possess and benefit from firm-specific human capital. In the study, some companies highly valued and rewarded work from analysts that required firm-specific skills. Even though the analysts realized that they were compromising their porta-bility, they felt irreplaceable and invested heavily in mastering the firm-specific processes. They passed up many offers from other companies, because they felt valued and supported.

The Hiring Firm and Performance PortabilityCompanies often have difficulty assimilating a star. The study revealed that many companies did not integrate new stars properly, and their new analysts’ performance deteriorated accordingly. Few compa-nies had put in place carefully considered strategies for assimilating incoming stars post-hire. Most of the studied investment banks expect that they can simply “plug and play” a star. But the integration process is rarely that simple. Even stars need time to adjust. The firms that were most successful at assimilating stars were those that had thought deeply about the hiring and assimilation processes. These firms analyzed their own cultures and pinpointed the desirable attributes of the stars they had developed in-house. They then sought stars with the same quali-ties from firms with similar cultures. In some firms, this analytical hiring process is considered a vital source of competitive advantage.

Casual or impromptu efforts at integrating a new employee are insufficient. Smart companies do a good deal of preliminary work to plan the integra-tion of an incoming employee and provide plenty of hands-on orientation after the move. Stars that experi-

ence a change in performance tend to overvalue their universally applicable general skills, and underesti-mate their intellectual tool kits firm-specific origins. This unwelcome discovery is matched by the sur-prise of hiring firms’ executives when they discover the degree to which the stars’ brilliance was specific to the culture of the company from which they came. Stars that are hired to exploit their existing set of skills in similar surroundings often have the most success in achieving star performance again. Those stars who are hire to explore new capabilities and skills are least likely to achieve star performance.

Hiring an entire team of stars, know as a lift-out, has become more common in several industries. When stars move in teams from one company to another, bringing team-specific processes and relationships with them, their performance declines the least. For the most part, stars do not develop in a vacuum; their performance depends heavily on the people with whom they work. If they can bring some of that firm-specific relational capital with them from one employer to another, their chances of maintaining their exceptional performance increase dramatically. Most often, team members are motivated to move together, because they can perpetuate relationships and networks that they value highly, especially with other high-performing colleagues.

One group of analysts in the study reliably main-tained their star rankings even after changing employers: women. Unlike their male counterparts, female stars that changed employers performed just as well as those who stayed put. Two reasons can be offered to explain this phenomenon: (1) the best female analysts appear to build their franchises on external relationships with clients and the companies they cover, rather than on relationships within their firms, and (2) women evaluate prospective employ-ers more cautiously and analyze more factors than men do before uprooting themselves from a com-pany where they are already successful. Star women

Though the plug-and-play scenario [of hiring star analysts] is largely a fantasy, it is important to move fast on multiple fronts to orient the new star to the department and other parts of the firm…[H]ire with care but integrate deliberately and fast….[A]d hoc efforts at integrating a new employee are insufficient.



seek new employers who will allow them to continue building successful franchises their own way. These women made certain their new firms would provide the resources they would need to overcome the drag on performance that a job change entails.

Developing Talent If portability of star-quality performance is more often a myth than a reality, it is crucial for knowledge-based firms to figure out how to cultivate and retain their own stars. Firms that nurture a development culture are far more successful at both producing and retain-ing stars. Directors of research analysts at the studied firms who opted to develop stars in-house tended to share a positive, can-do outlook. Techniques for developing knowledge-based talent vary, but they share the following characteristics:

• Individualized developmental agendas. The goal of successful in-house development efforts is not to nudge participants toward a formulaic model but to help them better pursue their individual strategies and creative impulses.

• Cross-fertilizationandflexibledevelopmentprocesses. With individualized development programs, analysts can be offered a diverse and flexible set of developmental practices. Some ana-lysts could be mentored and others could attend individually designed training programs. Many companies offered developmental programs that included peer mentoring, critiquing of colleagues’ work products, and sharing best practices across sectors.

• Intense support from the research director. For those companies that embraced developmental programs for analysts, the directors expressed an intense, passionate belief in nurturing star per-

formers. They became involved in a hands-on way with development initiatives.

• Ongoingdevelopmentofexperiencedanalysts. The feature of development cultures that was directly pertinent to stars’ performance was the conviction, embodied in practice, that training and mentorship are appropriate for experienced practitioners as well as beginners. This practice has implications for retention of outstanding per-formers, for individual and departmental morale, and for the departmental budget.

Turnover of StarsHowever, the effort to develop stars clearly is not a wise investment if the stars then depart to shine in some other firm’s constellation. Understanding the patterns and drivers of turnover among the best and

brightest is crucial for knowledge-based firms, whose star employees constitute their primary strate-gic assets. Some of these patterns include:

• Turnover among star- and non-star analysts. Star research analysts examined during the study were half as likely as non-stars to change employers. Most

commonly, stars tend to leave firms for increased compensation and the desire to join a firm or team with more resources and capabilities.

• Turnoverwithindifferentcultures. Stars are more likely to change employers if they work for firms in which the culture promotes learning and mastering portable skills. Companies that foster firm-specific skills experience a low turnover rate of stars.

Groysberg’s study revealed that a number of factors affect turnover rates. Stars are less likely to exit if they have a high rank among colleagues, work with high-quality colleagues, have longer tenure, are part of a mid-sized research team, work for directors who have long tenure, are supported by a high-quality sales team, and are well compensated. Stars are more likely to change employers when their directors leave or when they perceive they are part of a small team with little resources and/or a large team with minimal support.

[R]esearch departments [on Wall Street] rarely provided formal training or mentoring to supplement the traditional appren-ticeship method….Even less common was a concerted internal effort to develop analysts into stars; the most popular means of acquiring star analysts was to lure them from other firms…Over the course of our study, only nine firms developed more than 8 percent of their analysts into stars.



Groysberg’s study found three types of turnover among research analyst stars: (1) moving to a com-petitor, (2) leaving the profession, and (3) leaving for entrepreneurship opportunities. None of the factors that drive turnover have a significant influence for those analysts that leave to become entrepreneurs. The study also suggests that analysts’ skills were not readily portable to their new enterprises. Analysts who become entrepreneurs must learn new skills as they became managers as well as producers. It is not unusual for former analysts to abandon entrepreneur-ship and rejoin their former firms.

Fundamentally, turnover is a com-prehensive measure of numerous decisions that individuals make in the expectation that they can do better elsewhere. Those decisions might be strategic; individuals might move because they see roadblocks in their path, or they dislike their directors, or they receive offers they cannot refuse. Quite often, stars who left a firm failed to grasp how much they had relied on its resources.

Compensating StarsAll the research directors interviewed for the study reported significant differences between total com-pensation rates for stars and for average performers. Three factors largely determined analyst’s pay: their publicly-published rankings, the results of the sales-force survey, and job offers from competitors. Groysberg’s study discovered that analysts with simi-lar rankings could receive different compensation based on their specific sectors. Assessment practices at non-portability and portability firms showed a con-siderable difference. Non-portability companies did not ignore external metrics like client votes or exter-nally-published rankings, but they often used internal assessments and measures of activity as well, on the grounds that the market could not be expected to understand their particular needs and idiosyncratic products. The internal metrics are typically more subjective that external ones. Analysts watch compen-sation decisions carefully. Ultimately, the amount of their bonus is an incentive to stay as well as the belief that the contributory input and process were fair and nonpolitical, and that the firm was committed to its analysts’ success over the long term.

Lessons from Wall Street and ElsewhereFor both firms and individuals, there is more than one path to superior performance. But they should keep in mind that firm-specific human capital is highly likely to have performance-promoting value for those who possess it and who remain with the same employer. Firms that provide these sources of firm-specific processes and skills training, compensation, and/or tenure can reap a powerful benefit: they can keep their star performers and create a potential source of sustained competitive advantage.

Hiring a star should be a strategic decision, under-taken to fulfill a specific operational aim. For firms that look to the labor market for fully formed talent, in preference to taking the development route, it should be a high priority to guard against overpay-ing. It is also easy for firms to underestimate the risk of demoralizing the existing employees when an overcompensated star comes onboard. Finally, reten-tion appears to be a function of organizational factors like first-rate colleagues, suggesting that talent tends to attract and keep other talent in a self-reinforcing manner. Development of star performers is not a matter of pampering, crude incentives, or lavish out-lays. It involves a joint recognition from both the star and the firm that they need each other’s capabilities to fully succeed, and can both benefit from making the most of each other’s resources.

Ultimately, star performers should be aware of the most frequently made job-change mistakes:

1. Doing inadequate research on the company or job in question.

2. Changing employers solely for financial reasons.

3. Allowing discontent in one’s present position to force a move “from” a company, instead of a

As a rule of thumb, incentive and compensation systems tended to become embedded and to change very little over time. Once specific goals had been put in place, the compensation sys-tem built around those goals operated like an informal con-tract. Change the goals and the metrics could alienate veteran employees and prompt them to seek another employer who still rewarded the behaviors they had worked hard to perfect.



move “to” another.

4. Overestimating oneself with an inflated assess-ment of one’s skills and prospects and how much one’s actions contributed to dissatisfaction with the current employer.

5. Being unwilling to sacrifice short-term rewards for long-term opportunity.

For ambitious professionals, it clearly makes sense to affiliate with, and stick with, the highest-quality orga-nizations. Many highly talented people are more than willing to trade portability for a nurturing environ-ment and productive interactions.

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Features of the BookReading Time: 8 hours, 470 pages

Chasing Stars offers profound insights into the fun-damental nature of outstanding performance. Human resource executives, education and training manag-ers, and other senior executives will benefit from this book. It also offers practical guidance for individuals about how to manage their careers strategically, and for companies about how to identify, develop, and keep talented employees. The book is the culmination of extensive research by Boris Groysberg concern-ing the portability of talent. The first part of the book provides information about the research study upon which the book is based, the prior work on the ques-tion of portability, the population of employees that the study examined, and the central findings about the effects of job changes on individual performance and on the destination firm. The second part of the book examines the findings of the study in a more in-depth manner, devoting a chapter to each of the factors that contribute to variance in performance portability. The last part of the book examines what firms can do to effectively develop, retain, and leverage their best and brightest employees. It also explores the applicability of the research findings to other labor markets. Groys-berg intersperses case studies throughout the text to demonstrate the research findings. The extensive use of endnotes and citations, along with a complete index, make this book useful for future reference after being read from cover-to-cover.

Contents

Acknowledgements

Introduction

Part One: Talent and Portability

1. Moving On

2. Analysts’ Labor Market

3. The Limits of Portability

4. Do Firms Benefit from Hiring Stars?

Part Two: Facets of Portability

5. Stars and Their Galaxies: Firms of Origin and Portability

6. Integrating Stars: The Hiring Firm and Porta-bility of Performance

7. Liftouts (Taking Some of It with You): Moving in Teams

8. Woman and Portability: Why Is Women’s Per-formance More Portable then Men’s?

Part Three: Implications for Talent Management: Developing, Retaining, and Rewarding Stars

9. Star Formation: Developmental Cultures at Work

10. Turnover: Who Leaves and Why

11. A Special Case of Turnover: Stars as Entrepre-neurs

12. Measuring and Rewarding Stars’ Perfor-mance

13. Lessons from Wall Street and Elsewhere

Appendix

Notes

Index



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