Chasing Stars: How Star Performers Often Decline After Changing Jobs

August 30, 2011

Chasing Stars
The Myth of Talent and the
Portability of Performance
Boris Groysberg

©2010 by Princeton University Press
Adapted by permission of Princeton University Press
ISBN: 978-0-691-12720-0

Introduction
In the knowledge economy, companies take it for firms turn out to be meteors, quickly losing luster in
granted that they must employ the most talented their new settings.
performers to compete and succeed. Many firms try Groysberg also explores how some Wall Street
to buy stars by luring them away from competitors. research departments are successfully growing,
However, in Chasing Stars, Boris Groysberg shows retaining, and deploying their own stars. Finally, the
what an uncertain and disastrous practice this can be. book examines how its findings apply to many other
After examining the careers of more than 1000 star occupations, from general managers to football play-
analysts at Wall Street investment banks and con- ers. Chasing Stars offers profound insights into the
ducting more than 200 interviews, Groysberg comes fundamental nature of outstanding performance. It
to a striking conclusion: star analysts who change also offers practical guidance for individuals on how
firms suffer an immediate and lasting decline in to manage their careers strategically, and for compa-
performance. Their earlier excellence often depends nies on how to identify, develop, and maintain talent.
heavily on their former firms’ general and proprietary
resources, organizational cultures, networks, and col- Unexamined Reliance on Stars
leagues. There are a few exceptions, such as stars that Many knowledge-based firms view their employees
move with their teams, and stars that switch to better as their most valuable resource. At such companies,
firms. Female stars also seem to perform better after managers work hard to attract the best and the bright-
changing jobs than their male counterparts do. In the est. When companies do find first-rate talent, they are
end, Groysberg suggests that most stars who switch often willing to offer those stars huge salaries, sign-
Business Book Summaries® August 30, 2011 • Copyright © 2011 EBSCO Publishing Inc. • All Rights Reserved

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- Key Concepts
larized over the past decade by invoking a so-called
“war for talent.” This assumption is the cornerstone • Companies should not assume that finding
of many companies’ people-management strate- and buying the best and brightest perform-
gies. In essence, the star hypothesis makes sense. But ers will ensure success. Often, a star’s perfor-
reliance on stars is a highly speculative managerial mance declines after moving to another job.
policy, because not much is known about what drives • Companies must perform due diligence to
outstanding individual performance. Both stars and ensure a good fit between the firm and the
their employers often assume that outstanding per- star in order to preserve the star’s perfor-
formance is the result of a combination of innate mance.
talent and good education preparation. However,
little clear-cut evidence supports or refutes prevailing • Hiring a star should be a strategic decision,
beliefs about why some people excel. undertaken to fulfill a specific operational
aim. Firms should guard against overpaying
Another hazard of an unexamined reliance on stars for talent, and not underestimate the risk of
is that the prevailing belief of the portability of talent demoralizing the existing employees when
is actually a “double-edged sword.” For a particu-
the star comes onboard.
lar company, a prize-winning scientist, for example,
might be a unique resource, but unless he or she is • Female stars are cautious when evaluating
deeply embedded and loyal, the attractiveness of his new offers and tend to more thoroughly re-
or her talents makes that scientist an unreliable source search the new role to ensure the company
of a sustainable competitive advantage. In other is an advantageous environment for women.
words, the company never knows when another com- Star women who change employers do not
pany might lure the scientist away. On the other hand, experience the decline in performance that
the other company might attract the scientist to gain star men do.
his or her skills and experience but they run the risk • Team-specific processes and relationships
of the star scientist becoming a comet, quickly fading count as significant factors for a star’s per-
out in a new setting. The question of the portability formance. Therefore, when stars move in
of talent offers a promising point of entry into the
teams to other companies, their performance
longstanding debate about the fundamental nature
is more likely to be sustained.
of exceptional performance. Groysberg examines
whether stars’ performance is indeed portable from • Ambitious professionals should stick with
one employer to another in the hope of discovering the highest-quality organizations. Many
something fundamental about the origins of perfor- highly talented people will trade portability
mance. for a nurturing environment.

Knowledge Workers as Free Agents g g g g

Over the last few decades, an increasing number
of Americans have been employed as knowledge Information about this book and other business titles:
workers. These employees view themselves as free pup.princeton.edu
agents with portable skills. They attribute their job
performance largely to their own talent, skills, and Related summaries in the BBS Library:
knowledge, and thus regard themselves equipped to Talent
be equally productive in any appropriate workplace. Making People Your Competitive Advantage
This outlook is endorsed and promulgated by schol- Edward E. Lawler III
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-
Business Book Summaries® August 30, 2011 • Copyright © 2011 EBSCO Publishing Inc. • All Rights Reserved Page 2


ketability of a person’s skills derive not only from environment, companies must find ways to hire and
the employee-employer relationship but from exter- retain workers who are increasingly far more commit-
nal networks of clients and peers. Thus, knowledge ted to an occupation than to an employer.
workers have been repeatedly
advised to acquire a portfolio of
Over the last few decades, an increasing number of employed
flexible skills transferable to other
work situations and to cultivate Americans have been…knowledge workers. And the growth
extensive external networks. of this employment sector is expected to continue: the Bureau
This free agent knowledge worker of Labor Statistics reports that professional occupations will
view has produced a fundamen- grow most quickly and add more jobs than any other employ-
tal shift in prevailing employment ment category in the United States between 2012 and 2014.
patterns from long-term employ-
ment to short-term transactional
relationships between knowledge workers and their Not all researchers agree that all of knowledge work-
employers. This constant transferability of talent is ers’ skills are portable. Some distinguish between
alarming to employers in businesses, especially con- two types of human capital: general skills, which
sidering the bond between top performers and their are of potential value to numerous employers, and
clients renders an individual’s client base mobile as firm-specific skills, which are useful only to a single
well. As a result, firms have become increasingly will- employer. General skills, such as literacy or initiative,
ing to poach top talent from rival firms. In this new raise workers’ productivity at many potential places
of employment. Firm-specific skills, such as mastery
of a proprietary computer system, increase workers’
About the Author productivity at only one firm. Those who assign little
importance to firm-specific human capital tend to
Boris Groysberg is the Thomas S. Murphy assume that a given worker will be equally produc-
Associate Professor of Business Administration tive in comparable workplaces. Those who emphasize
in the Organizational Behavior unit at the Har- the firm-specific component of human capital argue
vard Business School. He currently teaches the that changing employers will cause a decline in per-
Managing Human Capital course in the second formance until an employee develops skills specific to
year elective course of the MBA program and in the new firm.
several Executive Education programs. Groys-
The performance of any worker is made up of a mix of
berg’s research focuses on the challenges of
innate, acquired, and organizational capabilities. But
managing professional service firms. In par- when so much strategic advantage can be gained by
ticular, his work investigates how a firm can be hiring, developing, and retaining stars, the question
systematic in achieving a sustainable competi- of how the performance of stars differs from that of
tive advantage by leveraging its employees. He the merely competent is a matter of great interest. In
examines how firms develop, hire, retain, and everyday psychology, the notion that some people are
utilize star knowledge workers. Groysberg has born with more talent than other is a firmly ingrained
won, for two consecutive years, the Strategic idea. Success is commonly thought to be the result
Management Society PhD Fellowship (Booz of personal factors, such as intelligence, creativity,
Allen Hamilton/SMS fellow) for his research on or talent. If a star’s performance is predominantly a
talent management. In 2001, he was also named function of his or her individual talent, or of learned
runner up for the Best Conference Paper Prize. but generally applicable skills, it is by definition read-
He holds a DBA in Business Policy from Har- ily portable to another employer.
vard Business School and a bachelor’s degree in
If the performance of star employees depends on
accounting from New York University. 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 2. The number of analysts is relatively small (about
competitive advantage. The difficulty lies in deter- 10,000), making it possible to collect reliable data
mining how much of a star’s performance lies in his on the entire population of analysts instead of
or her own innate talent and unique skills and how relying on statistical data.
much relies on the resources of the company he or she
3. Due to the existence of rich, thorough, and trust-
works for.
worthy data, analysts’ achieve-
A brilliant, Nobel-prize winning scientist may be a unique ments could be examined at
different levels: demographic, de-
resource, but unless he has firm-specific ties, his perfect mobil- partmental, firm, sector-specific,
ity makes him an unlike source of sustainable advantage. [Does] and at different points in time.
his productivity [have] to do with the specific team of research- 4. Security analysts encounter
ers of which he is a part? Does it depend on his relationship few external distractions when
with talented managers who are exceptionally adept at manag- they change employers, mostly
ing creativity? Does it depend on the…unique culture of the because a very large majority of
these analysts continue to live and
firm? work in New York, continue to
focus their analysis talents in the
In the absence of hard answers to questions about the securities of one industry, and dealt with the same
drivers of outstanding performance, employers tend clients they served when working in the previous
to act on the assumptions embodied in their corpo- firm.
rate cultures. Companies that embrace the view that
knowledge workers are free agents with thoroughly 5. Virtually without exception, top jobs on Wall
portable skills tend to deemphasize company-specific Street are filled with the help of search consul-
skills. Instead of developing their own stars, they tants, who have an unusual degree of embedded-
believe that they can simply hire talented individuals ness in the industry and acute insight into indi-
from an efficient labor market. Nevertheless, the ques- vidual and environmental factors that condition
tion remains: Are those who excel in the workplace the fit between an analyst and a new employer.
truly mobile free agents with highly portable skills, Their role is to enhance the portability of perfor-
or is their performance primarily driven by adept use mance.
of the resources of the specific organization in which
6. Star analyst’s job changes are reported promi-
they thrive? The answer to this question has profound
nently in the financial press, making it possible to
implications for how organizations hire, develop,
capture the market’s reactions to such moves.
retain, compensate, and deploy their best performers.
Moreover, it has a direct bearing on the decisions for By analyzing what happened to the job performance
individuals concerning their own careers choices. of star Wall Street security analysts when they moved
from one firm to another, Groysberg’s research offers
A Look at Wall Street Security Analysts new insight concerning the nature of work perfor-
Groysberg focused his research on the capabilities of mance among knowledge-based professionals.
star performance in the security analysis profession.
These researchers and their Wall Street employers Star security analysts claim they have portability,
hold a strong prevailing belief in free agency, and thus because they can carry their relationships with the
in the portability of outstanding performance. They companies they cover and the clients whose informa-
also exhibited six other features that positioned them tional needs they fulfill. They maintain relationships
as excellent subjects of his research: with managers of the companies they track, including
CEOs. It is rare for a star analyst to lose a client after
1. The performance of analysts is assessed annually transferring firms. Analysts also seek out relation-
using clear standardized measures and is publicly ships with suppliers and other sources of information,
reported. including relationships with the press to promote



their expertise. The type of training analysts receive cess of their employers’ capabilities and resources.
is general enough to apply to the work done at other • When contemplating a move, stars should try to
firms as well.
undertake a dispassionate and systematic as-
Star analysts that switch firms often leave behind sessment of the drivers of their past performance
relationships with other in-house professionals upon before taking any other steps. They should weigh
whom they have become interdependent. These rela- an increase in compensation against the probabil-
tionships are essential to performance and contribute ity of a future performance decline.
materially to analysts’ success. Access to other capable
• These individuals should also conduct a clear-
colleagues who cover a closely related sector makes
eyed assessment of the quality of their current
an analyst’s research more insightful. Also, strong
firm when compared to that of likely future
senior analysts need the support of strong associates
employers. A firm with fewer resources and less
and a strong sales force. When a star analyst moves to
accomplished colleagues might have a debilitating
another firm, the relationship with junior analysts is
effect on performance, no matter how talented the
lost and must be rebuilt. Relationships with company
star is or how hard he or she works.
traders who buy and sell stocks and provide the ana-
lyst with valuable information
are broken. Research directors in [T]he stock market viewed [announcements of departing star
firms have an enormous impact analysts] as negative but not significant events. We found that
on the performance of star ana-
[announcements of the acquisition of star analysts by invest-
lysts, because they provide
direction and support, and they ment banks traded on the New York Stock Exchange] were
decide how the analysts allo- accompanied by an immediate average loss in the value of the
cate their time, how to staff the bank’s stock of 0.74 percent….A loss of three-quarters of a
research department, and how to
compensate each analyst. Several
percentage point over a three-day period…corresponds to an
other relationships and channels immediate reduction in investors’ equity averaging $24 million.
of support are interrupted when
a star analyst moves. No longer can they rely on the Do Firms Benefit from Hiring Stars?
help and advice of portfolio strategists, technical ana- Many articles and books promulgate the existence
lysts, and the investment committee. Training that the of a war for talent and state that the increasing tech-
analysts received for firm-specific products and offer- nological and knowledge-based tilt of advanced
ings is not transferable to their new roles in another economies is creating an army of footloose free agents
firm. with portable skills. Some writers proclaim that the
most talented employees move most often, and the
Groysberg’s research revealed that star analysts who
kind of company-specific knowledge that was once
switched employers paid a high price for leaving:
valuable to both employer and employee no longer
overall, their job performance plunged sharply and
retains much value for either party. Because talent
continued to suffer for at least five years after moving
is flighty, managers need to get talented employees
to a new firm. The evidence refutes the prevailing
up to speed fast so they can begin contributing to the
belief in the industry that analysts’ skills are thor-
firm. An alternative scenario asserts that firms should
oughly portable—independent of the particular firm
lure stars with attractive offers and retain them with
where they work—and that analysts can move with-
individualized career customization.
out suffering a decline in performance. The research
points to a few lessons for star analysts and other Post-industrial economies are no doubt increasingly
exceptional knowledge workers to keep in mind: dominated by knowledge-based work. Many com-
panies assume that if their products or services are
• Individual star performers have a strong and per-
knowledge-dependent that they should stake their
sistent—and potentially career-damaging—ten-
competitive advantage on the talents of their employ-
dency to undervalue the importance to their suc- ees. But the evidence of the study documented in



Chasing Stars suggests very different conclusions contribute to the firm’s performance. Additionally,
about how to pursue competitive advantage in a the study found consistent evidence that investors
knowledge-based field. The author’s evidence points viewed were weary about such appointments, and
out that building capacity in a company by hiring perceived them as value-destroying.
stars might not work well, and could result in three
Ultimately, the research study suggests that compa-
undesirable outcomes:
nies should re-evaluate their practices for stars. Their
hiring should be a strategic deci-
[T]he research department at Lehman Brothers excelled at gen- sion, not a knee-jerk reaction to a
erating firm-specific human capital. During its heyday in the perceived opportunity or emer-
late 1980s and 1990s…, Lehman essentially mounted a ‘triple- gency. In general, a firm should
contemplate hiring a star only to
threat’ department: in hard, soft, and product-based ways, it fulfill a specific operational aim: to
built a team of analyst whose skills were firm-specific….[A] raise standards or introduce fresh
nalysts were encouraged to work in teams, and to collaborate ways of doing business. Even with
across sectors. …Lehman also adopted proprietary information this clear-cut goal in mind, a firm
must watch out for the potential
systems…The result was a culture and a set of work practices corrosive effects that a newcomer
that analysts knew they would find at no other firm. has on morale and dedication from
other employees. It is imperative
for a firm to perform pre-acquisition research. Com-
1. The performance of the star can suffer in the wake
panies should develop accurate projections of growth
of the move.
and profit margins to ensure anticipated gains from
2. The much-publicized outside hire can cause hiring outstanding performers for the company, not
resentment in the department, which can result in just an advantage for the stars themselves.
a breakdown in morale, teamwork, and commu-
Firms of Origin and Portability
nication.
of Performance
3. The firm might find that it paid more for its new The phenomenon of performance portability is
star than is justified by the results. closely linked to questions of retention and turn-
over. Efforts by firms to keep employees from leaving
In his study, Groysberg found that the most active
often go hand in hand with practices that lessen por-
seekers of star analysts were firms that were unsuc-
tability. Particularly in a fluid and opportunistic
cessful at developing their own talent or less interested
job market, non-portability and retention intersect
in doing so than in pursuing short-term performance.
when some analysts recognize that they are better
Star analysts tended to quit their jobs at a point in time
off, and perform better, if they stay. Firms that keep
when their firms of origin were underperforming
employees embedded in firm-specific processes limit
the market. The acquiring firms attempted to better
their employees’ ability to achieve star performance
their performance by stealing talent from firms expe-
elsewhere. Conversely, those companies that focus
riencing significantly worse performance. Research
less on firm-specific processes tend to have a higher
departments that lost talent were anxious to replace
turnover rate of high performers. However, pro-
it, but that effort usually took months. Other analysts
moting non-portability of performance is rarely an
were asked to step in to cover the gap caused by their
explicit corporate goal. Firms that employ knowledge
departed colleagues, which concerned clients and
workers seek to make the most of those employee’s
threatened to downgrade the rankings of the over-
valuable skills, and different approaches to doing so
worked analysts. In this type of job market, bidding
happen to promote or limit portability. Fundamen-
wars for star performers raised the cost of filling these
tally, the performance of stars is more likely to be
positions to dizzying heights. Typically, a firm over-
portable when the new employer uses an equivalent
estimated the value of an outside star and paid more
process model as the company of origin. When the
for the star’s services than he or she would ultimately
way a company manages and develops its employ-


ees reinforces the idiosyncratic characteristics of its ence a change in performance tend to overvalue their
products, processes, structures, systems, and cul- universally applicable general skills, and underesti-
ture, it becomes difficult for stars to achieve similar mate their intellectual tool kits firm-specific origins.
performance levels in another company. Firms can This unwelcome discovery is matched by the sur-
benefit by strategically communicating to employees prise of hiring firms’ executives when they discover
how much value the company’s products, services, the degree to which the stars’ brilliance was specific
culture, and processes add to their employees’ perfor- to the culture of the company from which they came.
mance. Employees often over-estimate the portability Stars that are hired to exploit their existing set of skills
of their performance, and by reinforcing their notion in similar surroundings often have the most success
that their performance is dependent on unique char- in achieving star performance again. Those stars who
acteristics of their employer, the company helps them are hire to explore new capabilities and skills are least
recognize that they possess and benefit from firm- likely to achieve star performance.
specific human capital. In the study, some companies
Hiring an entire team of stars, know as a lift-out, has
highly valued and rewarded work from analysts that
become more common in several industries. When
required firm-specific skills. Even though the analysts
stars move in teams from one company to another,
realized that they were compromising their porta-
bringing team-specific processes and relationships
bility, they felt irreplaceable and invested heavily in
with them, their performance declines the least. For
mastering the firm-specific processes. They passed up
the most part, stars do not develop in a vacuum;
many offers from other companies, because they felt
their performance depends heavily on the people
valued and supported.
with whom they work. If they can bring some of that
The Hiring Firm and Performance firm-specific relational capital with them from one
Portability employer to another, their chances of maintaining
Companies often have difficulty assimilating a star. their exceptional performance increase dramatically.
The study revealed that many companies did not Most often, team members are motivated to move
integrate new stars properly, and their new analysts’ together, because they can perpetuate relationships
performance deteriorated accordingly. Few compa- and networks that they value highly, especially with
nies had put in place carefully considered strategies other high-performing colleagues.
for assimilating incoming stars
post-hire. Most of the studied Though the plug-and-play scenario [of hiring star analysts] is
investment banks expect that largely a fantasy, it is important to move fast on multiple fronts
they can simply “plug and play”
to orient the new star to the department and other parts of the
a star. But the integration process
is rarely that simple. Even stars firm…[H]ire with care but integrate deliberately and fast….[A]
need time to adjust. The firms d hoc efforts at integrating a new employee are insufficient.
that were most successful at
assimilating stars were those that had thought deeply One group of analysts in the study reliably main-
about the hiring and assimilation processes. These tained their star rankings even after changing
firms analyzed their own cultures and pinpointed the employers: women. Unlike their male counterparts,
desirable attributes of the stars they had developed female stars that changed employers performed just
in-house. They then sought stars with the same quali- as well as those who stayed put. Two reasons can
ties from firms with similar cultures. In some firms, be offered to explain this phenomenon: (1) the best
this analytical hiring process is considered a vital female analysts appear to build their franchises on
source of competitive advantage. external relationships with clients and the companies
Casual or impromptu efforts at integrating a new they cover, rather than on relationships within their
employee are insufficient. Smart companies do a firms, and (2) women evaluate prospective employ-
good deal of preliminary work to plan the integra- ers more cautiously and analyze more factors than
tion of an incoming employee and provide plenty of men do before uprooting themselves from a com-
hands-on orientation after the move. Stars that experi- pany where they are already successful. Star women



seek new employers who will allow them to continue formers. They became involved in a hands-on way
building successful franchises their own way. These with development initiatives.
women made certain their new firms would provide
• Ongoing development of experienced analysts.
the resources they would need to overcome the drag
The feature of development cultures that was
on performance that a job change entails.
directly pertinent to stars’ performance was the
Developing Talent conviction, embodied in practice, that training
If portability of star-quality performance is more often and mentorship are appropriate for experienced
a myth than a reality, it is crucial for knowledge-based practitioners as well as beginners. This practice
firms to figure out how to cultivate and retain their has implications for retention of outstanding per-
own stars. Firms that nurture a development culture formers, for individual and departmental morale,
are far more successful at both producing and retain- and for the departmental budget.
ing stars. Directors of research analysts at the studied Turnover of Stars
firms who opted to develop stars in-house tended
However, the effort to develop stars clearly is not a
to share a positive, can-do outlook. Techniques for
wise investment if the stars then depart to shine in
developing knowledge-based talent vary, but they
some other firm’s constellation. Understanding the
share the following characteristics:
patterns and drivers of turnover among the best and
brightest is crucial for knowledge-
[R]esearch departments [on Wall Street] rarely provided formal based firms, whose star employees
training or mentoring to supplement the traditional appren- constitute their primary strate-
gic assets. Some of these patterns
ticeship method….Even less common was a concerted internal include:
effort to develop analysts into stars; the most popular means
• Turnover among star- and
of acquiring star analysts was to lure them from other firms… non-star analysts. Star research
Over the course of our study, only nine firms developed more analysts examined during the
than 8 percent of their analysts into stars. study were half as likely as non-
stars to change employers. Most
commonly, stars tend to leave firms for increased
• Individualized developmental agendas. The goal compensation and the desire to join a firm or team
of successful in-house development efforts is not with more resources and capabilities.
to nudge participants toward a formulaic model
• Turnover within different cultures. Stars are
but to help them better pursue their individual
more likely to change employers if they work for
strategies and creative impulses.
firms in which the culture promotes learning and
• Cross-fertilization and flexible development mastering portable skills. Companies that foster
processes. With individualized development firm-specific skills experience a low turnover rate
programs, analysts can be offered a diverse and of stars.
flexible set of developmental practices. Some ana-
Groysberg’s study revealed that a number of factors
lysts could be mentored and others could attend
affect turnover rates. Stars are less likely to exit if
individually designed training programs. Many
they have a high rank among colleagues, work with
companies offered developmental programs that
high-quality colleagues, have longer tenure, are part
included peer mentoring, critiquing of colleagues’
of a mid-sized research team, work for directors who
work products, and sharing best practices across
have long tenure, are supported by a high-quality
sectors.
sales team, and are well compensated. Stars are more
• Intense support from the research director. For likely to change employers when their directors leave
those companies that embraced developmental or when they perceive they are part of a small team
programs for analysts, the directors expressed an with little resources and/or a large team with minimal
intense, passionate belief in nurturing star per- support.



Groysberg’s study found three types of turnover Lessons from Wall Street and Elsewhere
among research analyst stars: (1) moving to a com- For both firms and individuals, there is more than one
petitor, (2) leaving the profession, and (3) leaving for path to superior performance. But they should keep in
entrepreneurship opportunities. None of the factors mind that firm-specific human capital is highly likely
that drive turnover have a significant influence for to have performance-promoting value for those who
those analysts that leave to become entrepreneurs. possess it and who remain with the same employer.
The study also suggests that analysts’ skills were not Firms that provide these sources of firm-specific
readily portable to their new enterprises. Analysts processes and skills training, compensation, and/
who become entrepreneurs must learn new skills as or tenure can reap a powerful benefit: they can keep
they became managers as well as producers. It is not their star performers and create a potential source of
unusual for former analysts to abandon entrepreneur- sustained competitive advantage.
ship and rejoin their former firms.
Fundamentally, turnover is a com- As a rule of thumb, incentive and compensation systems tended
prehensive measure of numerous
decisions that individuals make
to become embedded and to change very little over time. Once
in the expectation that they can do specific goals had been put in place, the compensation sys-
better elsewhere. Those decisions tem built around those goals operated like an informal con-
might be strategic; individuals tract. Change the goals and the metrics could alienate veteran
might move because they see
roadblocks in their path, or they employees and prompt them to seek another employer who still
dislike their directors, or they rewarded the behaviors they had worked hard to perfect.
receive offers they cannot refuse.
Quite often, stars who left a firm failed to grasp how Hiring a star should be a strategic decision, under-
much they had relied on its resources. taken to fulfill a specific operational aim. For firms
Compensating Stars that look to the labor market for fully formed talent,
in preference to taking the development route, it
All the research directors interviewed for the study
should be a high priority to guard against overpay-
reported significant differences between total com-
ing. It is also easy for firms to underestimate the risk
pensation rates for stars and for average performers.
of demoralizing the existing employees when an
Three factors largely determined analyst’s pay:
overcompensated star comes onboard. Finally, reten-
their publicly-published rankings, the results of the
tion appears to be a function of organizational factors
sales-force survey, and job offers from competitors.
like first-rate colleagues, suggesting that talent tends
Groysberg’s study discovered that analysts with simi-
to attract and keep other talent in a self-reinforcing
lar rankings could receive different compensation
manner. Development of star performers is not a
based on their specific sectors. Assessment practices
matter of pampering, crude incentives, or lavish out-
at non-portability and portability firms showed a con-
lays. It involves a joint recognition from both the star
siderable difference. Non-portability companies did
and the firm that they need each other’s capabilities to
not ignore external metrics like client votes or exter-
fully succeed, and can both benefit from making the
nally-published rankings, but they often used internal
most of each other’s resources.
assessments and measures of activity as well, on the
grounds that the market could not be expected to Ultimately, star performers should be aware of the
understand their particular needs and idiosyncratic most frequently made job-change mistakes:
products. The internal metrics are typically more
1. Doing inadequate research on the company or job
subjective that external ones. Analysts watch compen-
in question.
sation decisions carefully. Ultimately, the amount of
their bonus is an incentive to stay as well as the belief 2. Changing employers solely for financial reasons.
that the contributory input and process were fair and
3. Allowing discontent in one’s present position
nonpolitical, and that the firm was committed to its
analysts’ success over the long term. to force a move “from” a company, instead of a



move “to” another. Acknowledgements
4. Overestimating oneself with an inflated assess- Introduction
ment of one’s skills and prospects and how much
Part One: Talent and Portability
one’s actions contributed to dissatisfaction with
the current employer. 1. Moving On

5. Being unwilling to sacrifice short-term rewards 2. Analysts’ Labor Market
for long-term opportunity. 3. The Limits of Portability
For ambitious professionals, it clearly makes sense to 4. Do Firms Benefit from Hiring Stars?
affiliate with, and stick with, the highest-quality orga-
nizations. Many highly talented people are more than Part Two: Facets of Portability
willing to trade portability for a nurturing environ- 5. Stars and Their Galaxies: Firms of Origin and
ment and productive interactions. Portability
g g g g 6. Integrating Stars: The Hiring Firm and Porta-
bility of Performance
Features of the Book 7. Liftouts (Taking Some of It with You): Moving
Reading Time: 8 hours, 470 pages in Teams

Chasing Stars offers profound insights into the fun- 8. Woman and Portability: Why Is Women’s Per-
damental nature of outstanding performance. Human formance More Portable then Men’s?
resource executives, education and training manag- Part Three: Implications for Talent Management:
ers, and other senior executives will benefit from this Developing, Retaining, and Rewarding Stars
book. It also offers practical guidance for individuals
about how to manage their careers strategically, and 9. Star Formation: Developmental Cultures at
for companies about how to identify, develop, and Work
keep talented employees. The book is the culmination 10. Turnover: Who Leaves and Why
of extensive research by Boris Groysberg concern-
11. A Special Case of Turnover: Stars as Entrepre-
ing the portability of talent. The first part of the book
neurs
provides information about the research study upon
which the book is based, the prior work on the ques- 12. Measuring and Rewarding Stars’ Perfor-
tion of portability, the population of employees that mance
the study examined, and the central findings about the
13. Lessons from Wall Street and Elsewhere
effects of job changes on individual performance and
on the destination firm. The second part of the book Appendix
examines the findings of the study in a more in-depth
Notes
manner, devoting a chapter to each of the factors that
contribute to variance in performance portability. The Index
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


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Chasing Stars: How Star Performers Often Decline After Changing Jobs

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