A new report is about to be released in Organization Science, entitled: “Too Many Cooks Spoil the Broth: How High Status Individuals Decrease Group Effectiveness” (Authors: Boris Groysberg, Jeffrey T. Polzer, and Hillary Anger Elfenbein).

Their Abstract says:

Can groups become effective simply by assembling high status individual performers? Though an affirmative answer may seem straightforward on the surface, this answer becomes more complicated when group members benefit from collaborating on interdependent tasks. Examining Wall Street sell-side equities research analysts who work in an industry in which individuals strive for status, we find that groups benefited—up to a point—from having high status members, controlling for individual performance. With higher proportions of individual stars, however, the marginal benefit decreased before the slope of this curvilinear pattern became negative. This curvilinear pattern was especially strong when stars were concentrated in a small number of sectors, likely reflecting suboptimal integration among analysts with similar areas of expertise. Control variables ensured that these effects were not the spurious result of individual performance, department size or specialization, or firm prestige. We discuss the theoretical implications of these results for the literatures on status and groups, along with practical implications for strategic human resource management.

This is an issue we’re convinced of at TomorrowToday. We have recently developed a presentation we’re calling, “The Talent Reboot“. Our message is simply that talent works best when it is part of a talented team, and not treated as an independent entity. This is true in the world of work, just as it appears to be true in the world of sport, or in Hollywood.

For example, think of the 2010 Football World Cup. The two teams that made the finals, Spain and Holland, did not have too many superstars, and their superstars did not overly shine in the tournament. Other teams were studded with stars, and merely stuttered along. Football is a team sport. The U.S. men’s 2004 Olympic basketball “dream team” was equally filled with star NBA players. Yet the team underperformed and only won the bronze medal. They didn’t play as a team.

According to this study, that can happen in any team. The authors examined Institutional Investor magazine’s annual rankings of industry analysts from 1996 to 2001. The magazine ranks the performance of more than 6,000 analysts through polls and surveys of investment officers, money managers, and institutional investors. The authors also considered data from the Greenwich Associates institutional research services survey, which asked 3,000 clients to classify equity research departments using such criteria as the number of reports each firm produced, the level of service they received, and the accuracy of the analyst estimates.

Up to a point, the stars — that is, those who have earned a coveted position on Institutional Investor’s All-America Research Team — increased their team’s effectiveness. But hiring too many high-status employees dampened effectiveness, the authors found. Moreover, companies with high-level expertise tended to fare worse with superstars in tow than did more run-of-the-mill outfits. For example, Greenwich Associates’ client scores for the research departments of blue-chip companies like Morgan Stanley waned when more than 44.6 percent of the analysts could be considered stars. But for firms with less-seasoned, less-well-regarded analysts, ratings didn’t suffer until 70% of a group’s employees reached star level. At these tipping points, the researchers contend, the egos of status-driven employees likely took over; they began competing with one another and stopped sharing information.

The lesson is clear for human resources managers assembling groups of employees: Don’t overspend to recruit high-status employees. Once the prestige of a firm is established, each additional star contributes less to the group than the previous hire, and the additional expertise and visibility become redundant. According to the authors, these results imply — and many professional sports team managers would agree — that people with big egos may find it challenging to collaborate with one another, are difficult to manage, and contribute to dysfunctional dynamics while demanding huge salaries.

Bottom Line:
Work groups that have too many star employees can curtail a company’s effectiveness. Managers should curb their desire to hire numerous high-status employees; in so doing, they will help ensure greater collaboration and fewer ego-driven conflicts among team members.

Source: S+B ezine

TomorrowToday Global