Bill Gates once said, “A great lathe operator commands several times the wage of an average lathe operator, but a great writer of software code is worth 10,000 times the price of an average software writer.” We live in the age of the superstar because one’s production is no longer (or at least less) tethered to their peers’ production. Whereas an assembly line moves at the speed of its slowest worker, those in tech, pharma, finance, and other areas in the knowledge economy are free to exhibit extraordinary levels of productivity orders of magnitude larger than average workers or even very good workers. As a result, the majority of production has shifted from a massive number of workers contributing small amounts to a small number of workers contributing massive amounts. This has created a management challenge as a leader that motivates, satisfies, and inspires 95% of their workers may still fail spectacularly if they cannot motivate, satisfy, and inspire their stars.
Many organizations take the position that leading stars is just like leading average workers…but more so. They give their stars more attention, more praise, more latitude, and as indicated by the quote above, more resources. This approach is understandable but insufficient and even counterproductive. Below are the top three pitfalls of managing a star.
#1: Pay to stay. As once opined by the philosophers of the Wu-Tang Clan, “Cash Rules Everything Around Me.” Taking the CREAM approach to leading stars will only retain the star as long as a competitor is unwilling to pay $1 more. In efficient markets, the great value of a star will soon be offset by the great costs to retain him or her. Leaders need to embed their stars, and this means offering more than just pay. This can come in a variety of forms such as idiosyncratic work arrangements, allowing stars to engage in job crafting and self-guided training (even when it temporarily lowers their productivity), and surrounding them with people that not only support them but engage and challenge them.
#2: Mistaking Batman for Superman. Superman’s powers are attributable to extraordinary internal attributes. Batman’s powers are largely attributable to extraordinary external resources. Leaders need to ask themselves whether this star is successful because of their innate talent or is this star successful because they were given the keys to the castle? Herein lies a key difference between performance and productivity. Performance reflects current behaviors. Productivity reflects current behaviors plus any carryover effects from past behaviors. For example, a star realtor typically has the best territories and as such, it is possible that much of their distinctive productivity is the ability to sell real estate in a territory that is distinctively more expensive. They’ve likely earned this territory through past performance, but if their current performance is no better, or in fact, worse than their peers working in less lucrative territories, then the organization is paying a premium now for productivity that was largely determined by performance from the distant past. This mistaking of superheroes is not just limited to the mistaking of performance and productivity. Leaders must understand that stars do not operate in a vacuum. They must determine how much of their star’s productivity is a function of being supported by a network of high-quality subordinates. Numerous empirical studies have shown that when stars move alone, they typically have significant production declines, but when they move with their team, production is maintained. Rewarding the star with lavish perks at the expense of rewarding a star’s network that made the immense production possible is akin to making pharaoh Employee of the Month for his tireless efforts in building the pyramids.
#3: Building a 30,000-foot pedestal. Stars should be rewarded. Stars should be celebrated. Stars should never be isolated. If the amount of praise, pay, and rewards are so excessive that it effectively removes them from interacting with peers, then that organization has lost one of the most important contributions stars can make—being a role model. Furthermore, isolating a star reduces what is known as normative commitment. We’ve all worked jobs where the work itself was “meh,” but we’ve stayed because the people that we worked with were great. Pulling a star out of that environment either by physically transplanting them to a higher floor or corner office or by heaping so much praise and resources that peers begin to resent them reduces the star’s normative commitment. Bottom line, even if your star is Superman, don’t lock them in the Fortress of Solitude.
Ernest O’Boyle is the Dale. M. Coleman Chair of Management and an associate professor in the Management and Entrepreneurship Department, teaching Leading Organizations, Leadership and People Management, and co-teaching Designing High-Performance Organizations. Learn more about his work here.