The world’s best-performing companies possess more star talent, right? That’s the secret to their success, right? And these companies attract superstars through extravagant salaries and perks, right?
Turns out all of these assumptions are dead wrong.
Research shows the best-performing companies have roughly the same number of star performers as all other companies. And it’s not compensation that buys (or retains) star talent.
It’s About Clusters, Not Numbers
As outlined in a February article in the Harvard Business Review, Bain & Company performed detailed organizational audits on 25 global companies and surveyed more than 300 senior executives at large companies worldwide regarding workforce productivity. Its analysis revealed that the clear distinguishing factor of best-performing companies is not how many star performers they have but rather how they deploy these individuals—namely, in clusters.
According to Bain’s research, star talent makes up 16% of the workforce at the best-performing companies. This figure is 14% for the rest of the pack—not exactly a staggering difference. However, while the average company deploys star talent in an “unintentionally egalitarian way” (spreading their A players evenly across all roles in the organization), the best companies use “intentional nonegalitarianism,” purposely focusing their superstars in areas where they’ll make the greatest impact on company performance.
“As a result, the vast majority of business-critical roles—upward of 95%—are filled by A-quality talent,” the HBR article states. “In some technology companies, for example, software development is critical to business success. So the best-performing companies in this industry make sure that software development roles are filled with star talent. In other industries brand management matters more, so the A players tend to be clustered there.”
In short, stars are clustered where they can make the biggest difference to their organization’s performance. The egalitarian approach, the article observes, “may seem fair, even admirable, but it does not produce superior results.”
Money Doesn’t Buy Star Talent
There’s no denying that money matters to your employees—including your superstars. But dollars alone won’t bring them through the door or keep them from leaving.
A recent CNN Money article points to Uber as a prime example. Despite facing its share of challenges and PR hurdles, Uber has achieved remarkable growth: the company booked a stunning $20 billion in rides last year. As the CNN Money article notes, Uber has “enticed some of the most brilliant minds in tech to leave cushy jobs at Google, Facebook and Twitter” to undertake grueling roles with “long hours and a limited work-life balance.” Yet, the company doesn’t rely on high salaries or a battery of perks to attract these superstars.
What draws them? “Unique opportunities,” they say, including “the chance to solve real-world problems and a culture that frees them to experiment with radical solutions in a burgeoning field.”
Gallup tackled the subject of star talent in a March article titled, “What Star Employees Want.” Unfortunately, the data it presents are a bit confusing. Fortunately, the upshot isn’t.
The article states that 41% of surveyed employees say “a significant increase in income” is very important to them when considering a new job. However, Gallup clearly references a survey of employees in general—not star performers. Second, although it posits the importance of income, it goes on to show that income ranks fourth on a list of five key attributes employees consider when pondering a change of employers. Here’s the list in order of importance to employees:
- The ability to do what they do best.
- Greater work-life balance and better personal well-being.
- Greater stability and job security.
- A significant increase in income.
- The opportunity to work for a company with a great brand or reputation.
I’m not entirely sure what to make of the Gallup piece (especially its lack of focus on the “star employees” mentioned so prominently in its title) but it unquestionably mirrors the conclusion of the CNN Money article: the work itself is what matters most to star talent.
Indeed, Gallup urges employers who are hiring talent to talk about pay but to bring more to the discussion than pay alone. “People make decisions based on both reason and emotion, but they are more likely to be led by emotion. Therefore, organizations should clearly present how candidates can contribute to a role and an organization.”
What Is a “Star Performer” Exactly?
Aaahhhh … there’s the imperative and fundamental question raised by this entire discussion.
As indicated in the HBR article, it’s hard to deploy your star talent effectively without first identifying them. “Most companies employ some form of assessment based on performance and potential, typically as a vehicle for determining compensation and career progression,” the article states. “Following this approach, A players are employees who score highly on both dimensions.”
If you need additional help identifying your stars, an article from Lifehack cites seven traits they typically posses including initiative, integrity, adaptability and passion. You might also look at the Workopolis blog post, “8 ways to spot a star performer.”
There’s no cookie-cutter approach to identifying star talent. The definition is unique to every organization. But the one universal element is that “star talent” refers to truly extraordinary performers—the best of the best. There’s a whole level of reliable, solid performers below them who are vital to your business.
While you probably don’t need more stars, you do need to decide who they are if you want to deploy them for the best possible outcomes. And you may well need more of those solid performers to boost your organization’s success … but that’s a separate issue for another day.
Instead of a Hiring Spree, Redeploy Your Stars
The good news: star talent doesn’t have to cost you an arm and a leg. The great news: you likely don’t even need to hire more superstars.
You just need to rethink the way you’ve deployed the ones you have. And to maximize retention of your superstars, take a page from Uber’s playbook and free them to experiment more, to bring greater creativity to their work, and to be real-world problem solvers.
Photo courtesy of Pixabay.