Leadership and the portability myth: research and implications on talent portability

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Many organizations seem to conduct talent management and succession planning based on the assumption that star talent and solid leadership can be acquired as needed. Research into the portability of talent implies that it cannot be. This paper examines the research on the portability of talent and leadership skills and concludes that overreliance on recruiting outside stars can lead to disaster and that succession planning must be less reactionary and more integrated into the broader processes of developing the firm's strategy and determining the skills the top executives will need in order to execute that strategy. Strategies for leveraging this research are also presented.IntroductionIn every industry studied, researchers uncovered a disproportionate effect of talent (Groysberg et al., 2008a). Talented performers largely are responsible for the productivity and profitability of a firm. It appears as common sense that acquiring these talented individuals can bring those positive effects into a new organization. The prevailing belief is that star professionals are free agents, owning their means of production and therefore able to take their talents with them from one organization to another and continue to shine (Groysberg, 2011). An increasing number of firms rely on recruiting outside star professionals instead of developing their own people into the best and brightest (Groysberg, 2011). Several management gurus and books tout the idea that recruiting is the optimal strategy in a war for talent (Groysberg et al., 2004). This notion has become the cornerstone of people management strategies. However, recent research shows that hiring star performers is a risky endeavor, not only negatively affecting the star but upsetting veteran employees who might be demotivated by the glory and high salaries the incoming stars command (Groysberg et al., 2004).These same risky assumptions find their way up to the boardrooms of corporations across the globe. The selection of a CEO is perhaps the most important decision a board of directors makes (Khurana, 1999). This decision too appears subject to the myth of portability. The succession process was traditionally conducted behind closed doors, shrouded in mystery. However, as the visibility and power of CEOs have increased, the amount of attention investors and business media paid to the succession process has also increased (Khurana, 1999). In addition, as institutional investors' influence on corporate boards increased, the likelihood of their intervention in management and succession also increased (Khurana, 2002b). These investors are likely to demand the resignation of CEOs when stock underperforms. Boards often react by seeking out a new CEO with enough star power and status to inspire public confidence and boost share price-perhaps even at the expense of technical abilities (Khurana, 2002a). If these star CEOs are unable to produce the desired increase, boards are quick to remove them and begin the search anew (Khurana, 2002b).Perhaps both these errors occur as a result of a fundamental attribution error-the erroneous tendency to attribute outcomes to the actions of prominent individuals while ignoring the interplay between social, economic and other impersonal factors (Khurana, 2002a). Indeed, much research on portability suggests that success in talent acquisition and development demands a consideration of these oft-ignored factors. This paper examines the research on the portability of talent and leadership and offers implications for talent management and succession planning.Research on PortabilityThere is an overriding assumption in people management that organizational performance is best achieved by getting the right people on the bus and worrying about the superfluous details later (Collins, 2001). This assumption can convince organizational leaders that hiring talent is the single best method for developing a high-performing organization (Burkus and Osula, 2011). …