Chasing talent doesn’t work and just costs the companies doing the chasing a lot of wasted money. That’s the conclusion that Jeffrey Pfeffer of Stanford’s Graduate School of Business reaches in his recent blog post for BNET.
In this latest post, Pfeffer dispels the myth that organizations can buy increased organizational performance by luring top performers away from other companies. While this may make sense in theory the reality is that it seldom works. To prove the point, Pfeffer points to research done at Harvard by Boris Groysberg to determine whether a company could gain some competitive advantage by hiring outside talent.
When a company hires a star away from another firm:
- The star’s performance falls
- There is a decline in the performance of the group the star joins
- The market value of the company hiring the star falls
- The star doesn’t stay with the new employer for very long
According to Pfeffer, individual productivity and success depends in part on where people work. A whole host of factors outside of individual talent contribute to an individual’s performance—including access to resources, collaboration with team members, capabilities of manager, etc.
Pfeffer’s conclusion? “There are no short cuts to efforts to build systems that develop the full potential of existing employees and cultures which provide the collaboration, mentoring, and learning opportunities that help everyone do better.”