Friday, August 11, 2006

Summit '06: Session Five (I): Nanda

Ashish Nanda is a professor at the Harvard Business School. Every year, in his class, they do a case study on Willow Creek, and at one point, Bill is invited to the class to interact. This session is an interview...Bill Hybels is doing the interview. He's starting out by drawing some charts that highlight the relationship between profitability and costumer satisfaction and costumer loyalty. Satisfaction leads to loyalty, leads to sucess. Satisfaction is a product of exceeding people's expectations which leads to loyalty... Nanda says that the goal of the leader is to create a great work environment which leads to staff loyalty... we're getting to what they really brought Nanda in for. The topic is "The Risky Business of Hiring Stars." For years, Hybels has taught people to hire rock stars (my words, not his, but you get the idea). Nanda has written a paper arguing just the opposite. Here are some points... 1. Stars tend to move more (which means, you'll have a hard time hanging on to stars). 2. The performance of stars, when they move, goes down, for five years after they move. 3. When stars move, your performance goes down. 4. The stock market tends to go down, when companies spend big money on a star. The reason? A star is a star not just because of they skill, but because of their context. Companies alway undervalue the contribution of the team around the star. Where do stars struggle the most? When they move from a large organization to a small organization because they don't have the resources, support staff, etc. (Translated, if you hire a former Willow Creek staff member, they'll tend to do worse in your organization than they did at Willow). If you are hiring stars: 1. Hire them and the team around them. 2. If you're hiring someone to strengthen a team, and outsider doesn't tend to work...if you're hiring someone to start something new, then a star is more likely to succeed. You can buy Nanda's article, "The Risky Business of Hiring Stars," here.

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