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Faculty Research

Rising Stars, Falling Stars

Two BYU Marriott professors are lighting the way to a more accurate system of reading the stars of business.

In the heavens, a star is born when hydrogen particles undergo so much pressure that their nuclei fuse. It’s turbulent and hot and can take millions of years. In the business world, stars of a different variety also form under intense pressure. Fortunately, the process doesn’t take quite as long, but it is imperfect and hard to replicate, and the resulting star employees are not created equal.

Regardless of trade, the definition of a star employee is generally the same across the planet: a high performer who is exceedingly visible; someone whose light shines brighter than the rest—like eight times brighter for computer programmers, or one hundred times brighter for scientists. Clayton Christensen is a star. Steve Jobs was a star. Many think of Jeff Bezos and Elon Musk as stars.

Becoming a business star requires extreme discipline, hard work, and (sometimes) a bit

Page Breakof luck. But like the stars that shine on a clear night, not all business stars are exactly what they appear to be. In fact, two star watchers at BYU have uncovered a bit of cosmic truth that may change the way recruiters and headhunters view stars forever.

Star Gazing

The development, movement, and power of business stars has fascinated BYU Marriott professors James Oldroyd and Shad Morris since their days together as MBA students. Stars are now the subject of several publications headed up by the duo, with their most recent research uncovering an unexpected phenomenon. They’ve learned that stars who come from high-ranking, top-tier firms are more likely to be overlooked by competitor firms; but when stars emerge from a lower-tier institution or lesser-brand-name company, they shine bright.

“If you can be a star at a lower-status firm, it is truly impressive,” Oldroyd says. “It’s more likely that you are a star because of what you have done, not because the resources and team at the institution lifted you up.”

Assessing the true value of star employees is a big deal because research shows (unsurprisingly) that stars are the ones headhunters are going after. Since these high performers are especially sought after, they are more likely than other employees (or non-stars) to move from one company to another. Investing in new hires takes time and effort, and getting the right hires from the beginning can translate into significant financial success or failure for a company.

“Stars are unbelievable in the amount of value they create for organizations, and because they create so much value, everyone knows them and everyone sees them,” says Morris. “However, firms need to ask, ‘What are the downfalls of stars? What are the things we need to watch out for?’”

Star Trek

Morris and Oldroyd’s stargazing pursuit took shape after they both finished MBAs at BYU Marriott and were a few years into their academic careers—Oldroyd at Northwestern, and Morris at Cornell. Morris had been recruited by Sungkyunkwan University (SKKU), an institution in South Korea partnering with Samsung. The partnership was aimed at resurrecting SKKU, one of the world’s oldest universities (founded in 1398 and almost shut down during the Japanese occupation of Korea). Samsung was investing heavily in building a globally competitive MBA program, and Morris wanted Oldroyd to join him. Oldroyd, a rising star himself, happened to be interviewing in Singapore for a faculty position, and Morris convinced him to stop in South Korea. The plan worked, and the old friends soon started on their star trek.

At SKKU, the two began teaming up with colleagues at Seoul National University (SNU) to explore a fascinating and valuable data set. In South Korea, media outlets rank all financial analysts each year, painting a clear picture of the stars in that particular industry. Rarely do researchers find a whole population data set, but that’s exactly what the SKKU and SNU researchers had: the data showed when, where, and how long the stars in that field stayed in their jobs. That data ended up being the foundation for several star-studded studies, including Morris and Oldroyd’s most recent publication.

While the duo eventually moved on to positions at The Ohio State University and then BYU, they continued to collaborate. In 2012 they published a paper called “Catching Falling Stars: A Human Resource Response to Social Capital’s Detrimental Effect of Information Overload for Star Employees,” in which they highlighted the role of human resource management in minimizing the effects of information overload for stars. It was that paper that led them to believe there were still many unexplored dynamics around the hiring and managing of stars.

Meanwhile, colleagues in their academic field were publishing research that showed that when stars are lured away and hired elsewhere, their performance dips and never quite returns to what it once was. That information helped embolden companies to execute more lift-outs, where recruiters don’t hire just the star—they hire the entire team. “You take the whole constellation out,” Oldroyd observes.

This info all seemed to point to one thing for the researchers: there has got to be a better, less costly route for firms to hire stars who will continue to deliver at a high level, even in a new organizational environment.

Oldroyd and Morris turned to their data on Korean financial analysts and identified all the job affiliations of each of 695 security analysts reported over a nine-year period. They ended up with 3,366 year-analyst observations: 329 of the analysts experienced at least one job change across firms, with a total of 487 job changes occurring over the entire period.

The analysis revealed something they didn’t expect: the stars on the move were not those from the high-status firms. “It was the younger analysts and analysts from the lower-status banks who were more likely to get poached,” Oldroyd points out. Their research revealed three main things:

  1. Stars are more likely to move across organizations than their less visible peers.
  2. Stars with portable human capital are more valuable than stars whose human capital is linked to their current organization or firm.

Page Break3.Stars from low-status firms are more likely to provide star power to a new firm than stars from high-status firms; they have clearly and unequivocally earned their star status on their own merit.

“Being a star from a star firm muddies the water,” Morris explains. “You could be a star of your own merit at Goldman Sachs, but how do you convince people that it’s all you?”

The researchers call this conundrum the Jim Westphal effect. Jim Westphal is a prolific researcher and professor of business management from the University of Michigan’s Ross School of Business. His research appears often in Administrative Science Quarterly, one of the top management journals in the nation. In recent years, many students have started to work with him on research, and their papers end up appearing in ASQ as well. When those students start to send out their résumés, recruiters see Westphal’s name, assume the students are just riding his coattails, and discount the students’ work simply because of the association with Westphal.

Catching Stars

The challenges of pursuing star employees are not new to HR managers. Brad Taylor, now the assistant administrative vice president of human resources at BYU, sat across the desk from many stars during his thirty years in HR at General Mills. While the company’s general philosophy has always been to hire straight from college campuses and then promote from within—the last five CEOs have all been homegrown—Taylor admits there were a handful of times the company was starstruck by outside phenoms.

Taylor is not surprised by the research findings of Oldroyd and Morris because he lived that experience firsthand. “The few times we hired someone from a big-name firm, we were often disappointed,” he recalls. “We would ask ourselves, ‘What are we doing wrong that they’re not thriving here?’”

Fortunately for Taylor and General Mills, those types of hires were few and far between. In Taylor’s opinion, HR reps should bring in new employees who come in just a notch below the stars. These employees, he says, are more open to being coached and come with a desire to enhance the work environment.

“When you hire a star from Disney, you think that person is going to bring some of that Disney magic with them,” Taylor says. “But a person coming in with a big reputation expects to be adored; they usually come in with an ego. Someone from a lower-tier firm is scrappier and more eager to impress and learn.”

Inside Sales chief strategy officer David Boyce agrees. If you’re only hiring from A-list institutions, you might be getting superstars, but you’re also getting a lot of ego that ultimately limits their performance, he says. In fact, “no ego” is one of the three criteria Boyce uses to hire, along with aptitude and a bias for action (someone who would rather be playing on the field than watching from the press box).

Yet Boyce admits his firm occasionally makes the mistake of overvaluing a prospect just because they come from a high-status or brand-name institution. “We think Harvard or Stanford matters, and sometimes we hire a middle-of-the-pack person just because they went there,” Boyce says. “I would much rather hire a top student out of BYU, because they come ready to prove something. You want someone with fire in the belly.”

That philosophy meshes well with the opinion of famous researcher and New York Times best-selling author Malcolm Gladwell, who famously (or infamously) postulated in his 2014 book David and Goliath that finishing ranked in the top of your class at a second-tier university is better for your career than finishing as a middle performer at a top-tier school. This is not to say BYU is not a top-tier university; after all, it was Gladwell who devised a much-discussed ranking system that placed BYU’s J. Reuben Clark Law School No. 2 in the nation back in 2011.

Honeywell chief HR officer Mark James regularly recruits students from BYU, and he says that Honeywell “only hires stars,” but they don’t care where they come from. “We have seen stars coming from both well-respected companies and schools, as well as stars coming from places not typically thought of as ‘top shelf,’” James says. “At Honeywell, we care more about how someone actually performs ‘on the field’ than what their pedigree is, who their parents are, or other such factors.”

That said, he recognizes that past performance alone doesn’t necessarily guarantee success in a new job. In his experience, people working at weaker-performing companies or in work cultures that are not performance based are likely to face an uphill struggle when they move to a strong-performance company, regardless of their star status.

Future Stars

For Oldroyd and Morris, the immediate impact of their most recent research manifests in how they advise students. In the past, it seemed like a slam dunk for students to reach for and accept any job offer from a high-status firm. Now the advice that the professors give is a bit more nuanced.

“I am still hesitant to tell students they shouldn’t take a high-status job if they get one,” Morris says. “But their ability to stand out in a lower-tier organization might be greater.”

They understand that this is a hard message for students to swallow. After all, for eager graduates, landing a job at a top-ten firm—think Apple, Google, and Amazon—feels like a sweet validation of their abilities. But students need to know there are multiple avenues that can result in a long, successful, and meaningful career.

Take Brad Taylor’s father as an example. Back in the 1950s, Taylor’s father, Hank, was a new Harvard MBA with great prospects, including offers from corporate giants such as Shell, Del Monte, Phillips, and TRW.

To his father’s great disappointment, Hank took a job at a startup in Palo Alto, California, with two guys who had just moved out of their garage and into their first office. Those two guys were named William Hewlett and David Packard. Hank had a long and very successful career.

Says Oldroyd, “It’s tiring to hear students whining when they don’t get a job at a high-status firm. That might not be the right thing anyway. We’ve got great students. They’re smart, they work hard, and we’re assuming they’re going to be stars. But then the question becomes ‘how do they best signal to the market that they really are a star?’”

The answer: don’t shoot for star organizations—be the star yourself. When you do that, others won’t confuse your individual shine for organizational shimmer. In other words, says Morris, “You might be better off proving yourself a star in Omaha than in New York.”

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Article written by Todd Hollingshead
Illustrations by Red Nose Studio

About the Author
Todd Hollingshead is a media relations manager in BYU’s University Communications office. A former journalist, Hollingshead holds a bachelor’s degree in journalism and a master’s degree in mass communications from BYU. He lives in Orem with his wife, Natalie; their four children; and a dog and cat. The jury’s still out on how long the cat stays.