Business bookshelf: Why top performers struggle

In the next few weeks, pictures from soccer’s World Cup in South Africa will dominate the world’s media. Lionel Messi, Wayne Rooney and Cristiano Ronaldo will become even more familiar faces.

But soccer is a team sport. Are we making the classic mistake of overemphasizing stars at the expense of the wider team effort?

Boris Groysberg would probably say yes. His new book, “Chasing Stars,” is a meticulous study of the performance of Wall Street analysts. It asks the key question: Is the success of individual “star” employees transferable to other businesses?

In other words, is it the team or institution that is key to the high performance, or does it mainly come down to the individual concerned?

Groysberg, an associate professor in the organizational behavior unit at Harvard Business School, led a study of the careers of 1,053 top analysts at 78 investment banks between 1988 and 1996. His team looked at 546 job changes.

They compared the stars’ performance with that of 20,000 “non-star” analysts at about 400 investment banks. They also interviewed 200 analysts face to face, as well as talking to their institutional investor clients. This was a thorough examination.

Star analysts are a suitable case for study. “Managing a research department is like managing a movie set with 100 Jack Nicholsons,” according to Michael Skutinsky, a former research executive for Paine Webber, Lehman Bros. and Salomon Smith Barney, who is quoted in the book. “The word ‘anal’ isn’t in analyst by mistake,” he told the author.

Groysberg’s data were unequivocal. “Star equity analysts who switched employers paid a high price for jumping ship,” he writes. “Overall, their job performance plunged sharply and continued to suffer for at least five years after moving to a new firm.”

Analysts’ skills are not as portable as all that, it turned out.

What people leave behind, Groysberg argues, are “the capabilities of the old firm and the practiced, seamless fit between their own skills and the resources of the company  … an analyst who left a firm where he or she achieved stardom lost access to colleagues, teammates and internal networks that can take years to develop … new and unfamiliar ways of doing things took the place of routines and procedures and systems that over time had become second nature.”

Is there anything the hiring firm can do to prevent this drop in performance? One thing that might be worth trying is hiring an entire team — the “liftout” option.

Groysberg explains that a liftout works in four stages: courtship (when a team is persuaded to consider leaving); leadership integration after the move (vital in getting people aligned); operational integration; and, finally, full cultural integration. All four stages must be completed if the team is to retain its effectiveness.

The other tactic worth trying is hiring more women, who, according to the data, seem to suffer less on leaving one firm to join another.

Why? First, female analysts had formed stronger ties outside the firm than many male analysts and so were less dependent on their former work colleagues. And second, they made wiser choices when it came to agreeing to move.

The list of mistakes that star employees make when deciding to leave is substantial, Groysberg argues. They do inadequate research into the new company. They leave for the money. They leave because they are escaping something unpleasant, rather than positively choosing something better. They overestimate their own abilities. And they fail to take a long-term view.

This dense and closely argued book is a demanding read but its central lesson is vital. In the high-pressure world of knowledge workers, teams matter more than individuals. And few individuals should ever delude themselves that their great achievements are down to them alone.

Stefan Stern is a columnist for the Financial Times of London, in which this review first appeared.