Regular Joes

Yet, stars remain a risky engine to hitch the firm to, given the fact that they, by nature, require greater rewards and resources than the rest of the workforce. The general backlash that star-driven organizations attract adds to the risk — just ask the New York Yankees … or McKinsey.
"The broader failing of McKinsey and its acolytes at Enron is their assumption that an organization's intelligence is simply a function of its employees," notes Malcolm Gladwell in a July 22 New Yorker article that questions principles laid out in the McKinsey-authored The War for Talent (Harvard Business School Press, 2001). "They believe in stars, because they don't believe in systems."
Whether warranted or not, star backlash permeates U.S. culture. How many times have we heard that this year's Big Fat box office smash cost a mere $5 million to produce? Or that the reigning Super Bowl champion New England Patriots triumphed because of old-fashioned teamwork? "You don't need famous people or big stars or $17 million bonus babies to win in this league," writes Sports Illustrated's Peter King. "You need good players, players willing to check their egos at the door for the good of the team."

Perhaps, but that doctrine goes out the door as soon as the Green Bay Packers, Denver Broncos, or another high-payroll team boots the Patriots. And despite a high-profiles failure at a quintessentially star-driven organization and an economy that requires continued belt-tightening, consulting firms often choose to treat their best and brightest, their superstars, better than the stars below them.
Colleen O'Neill, talent management leader for Mercer HR Consulting in Atlanta, recently worked with a large executive search-and-placement firm that wanted to expand its consulting offerings. The firm originally achieved great success through mavericks who ran the business the way they wanted to and, in doing so, generated impressive returns.
"But the firm didn't believe that its new business model fit with that approach," O'Neill notes. "So, they wanted to know, 'Should we carve the business up, and just let those mavericks operate any way they want to while we ask the rest of the business to follow these other values that we think are important?' I think all firms struggle with striking the right balance. They're constantly doing that cost/benefits analysis with their stars."

The Cambridge Problem

Before organizations can crunch those numbers, they should define their star performers. "It is a professional that any organization or business wants more of," says Tierney. "In consulting, you want more partner-level people who are well rounded, able to serve clients and the partnership. That's how you grow your business over time, how you maintain your quality and how you create your competitive advantage."

Tierney and other talent management experts who talk about "stars" prune the terms of the word's prima donna connotations. And while it is instructive to look outside the consulting field to glean how other disciplines cultivate their own top performers, doing so should not lump in top consultants with sullen outfielders or unstable Hollywood action heroes.
 "You have to accept right from the get-go that there are egos to deal with," says Steve Blamer, president of Grey Worldwide New York. "The challenge is to find people who have justifiable egos because of their work and the contributions they've made to client business but also who are willing to collaborate. Collaboration is critical. There are no lone wolves in the advertising industry anymore, and there are no lone wolves in American business anymore."

But Blamer and others emphasize that ego is not a defining quality for star performers. "I've found that my highest-earning clients are the easiest ones, and that the ones whom I'm building are the more difficult ones," notes William Clark, president of Wm. Clark Associates, the New York literary media agency whose roster includes top writers such as Russell Martin as well as artists such as Bjork and Snoop Dogg. "I don't know if that's because of a hunger level or what. It seems like my highest earners just understand what has to be done. They have to write, they have to deliver."
Self-motivation, then, along with intelligence and independence, mark most star performers' essential qualities. "I can guarantee you that for every NBA player, you can find someone who is just as skilled if not more so but is not in the league," says Robert Lanza, who served as chief counsel for the National Basketball Players Association and is of counsel with Sonnenschein Nath & Rosenthal in New York. "The reason for this is that these guys are the 400 best people at their job in the world. They're willing to spend eight hours a day in the gym."

In the consulting world, Tierney cautions against snap judgments when it comes to judging star quality. "It's very dangerous to try to predict in year one what somebody's going to be doing in year five or 10," he says, "because they're going to change and their responsibilities are going to change."
That star performers possess smarts is a no-brainer, but it is worth noting because of what Dr. Andy Lippman, founding associate director of the MIT Media Laboratory and a senior scientist at MIT, calls the Cambridge Problem. "The more people you accumulate in a room, the more dissension you'll get, because everyone else has something intelligent to add to whatever is said," he notes. "So, the result is that you never get anywhere because everybody is much too smart. MIT can't be much different from the consulting world — everybody's smart, everybody's arrogant, and everybody's always right. The best that will happen is that 24 hours later we'll walk up to you and say, 'You know that point you made yesterday? There was some merit to it.'"

Finally, and perhaps most important, stars defy brush-stroke management techniques. "You always have to keep it top-of-mind how unique they truly are," says Christina Williams, Ph.D., managing director of the Dallas office for RHR International, a management psychology firm. "To even lump them together simplifies their qualities in a way that's deceiving. The most important thing with these folks is to recognize what makes their talent unique, identify what makes them special from a personal perspective, and then change how you interact with them based on those insights." Or, as Tierney notes, "You can't control these sorts of people, you can just influence them."
In their book, Tierney and Lorsch identify four forces within organizations that influence star performers (people systems, structure and governance, leadership, and culture) and a range of useful strategies and tactics within each of those areas. "Most organizations, to the extent they focus on human development, focus on those people systems and structure and governance," Tierney says. Every firm has a compensation system, performance reviews, and governance in place. And most consulting leaders can determine whether those forces are working. Leadership and culture are more difficult to identify and measure. Tierney believes that most firms underuse those forces in managing top talent. "Of those two," he adds, "the culture is the area in which there is the most upside."

Adam Sandler Money

While helping negotiate the players association's $200 million licensing agreement with the NBA, Lanza learned what the highest-paid athletes in the world expect when it comes to compensation systems. "They needed to know that they were getting a fair share of what the employer was earning," he says. "So, they needed to know what the employer was earning and to get a feel for what the fair market value was for their skills."
"My position was that these guys are the 400 best people at their job," Lanza adds. "They're also comparable to entertainers. Take Adam Sandler. He's making $20 million for a picture. For what? Two months' work, three months' work? Why is it a problem for [NBA all-star] Kevin Garnett to make $26 million for a year, when he's doing his job for 10 months? Isn't he just as unique as Adam Sandler? That's the way I really view it. You have to really appreciate how unique they are."

Williams agrees, noting that the reward systems also should be sufficiently flexible to reflect that singularity. "We deal a lot with nuclear engineers," she notes. "They are so off-the-scale brilliant and so much in their own heads that if we ever do any type of external recognition, it just drives them further into their shell."
Instead, Williams and her clients develop people systems after analyzing how specific levers or rewards might demotivate top talent. "We've also become more creative even in how we consult with and coach these individuals," Williams adds. "It's not doing the standard, 'I'll meet you in your office and we'll sit around the conference table and talk for a couple of hours.' For the folks who truly are talented beyond belief, it may mean pulling them outside the regular business setting and communicating that I am going to interact with you differently to acknowledge that I see that you're not the same as the others."

Few consultants are nuclear scientists, most lap up the recognition limelight, and some want to be paid like Adam Sandler. And that is difficult in a down economy, notes Chuck Wardell, managing director of the Korn/Ferry International's northeast region. "You no longer have the luxury of keeping on people who don't produce," he says. "At the same time, you have to have patience. It's a down economy. And first-class people whom you want to retain are having soft spots."
Compensation and performance systems, and their effect on star performers, should be carefully considered and clearly communicated, particularly when stars receive different rewards than the rest of a firm's workforce. "Two models can be tolerated as long as everyone understands that the star position remains tenuous," says O'Neill. "And when stars aren't meeting their expectations, they have to go."

It Takes a Village

When Blamer took over as president of Grey Worldwide New York, he took one look at the top advertising agency's structure and decided that it had to go. He believes that departments — those separating account managers from creative personnel, or researchers from management — get in the way of accountability and great ideas.

As a result, Grey Worldwide New York established nine client-facing villages, some of which have subvillages that specialize in certain areas, such as high tech or health care. The village "Fresh Grey," for example, takes brands that have reached a plateau and breathes fresh life into them. Real grass surrounds the village's real estate within Grey's Third Avenue office. Each village, which is staffed by multiple types of personnel (account execs, researchers, management, etc.), occupies a different floor and has profit and loss control of their accounts.
 "When I got into this business 25 years ago, my first boss told me that creative people are children," Blamer says. "It's archaic to think in those terms. He wasn't right then and he's not right now. The secret it is to make creative people accountable and to develop systems and structures that allow them to feel that accountability. Organizations are classic about hiding. A system such as ours organizes the business around the client's business, encourages collaboration, and makes its people feel accountable to the client. If I don't give them that structure, they can hide."

Leading with a Flashlight

Tierney and Lorsch, in their book, dedicate a chapter titled "Leadership Without Control" to the strategy and tactics that enable leaders to guide stars. That directive also is a familiar one in the arts, where Clark describes a similar strategy and a useful tactic. "One of the primary jobs [for literary agents] is to find the talents of those you manage and work with them to focus on how to best use them," he says. "And if you're controlling them, you're not necessarily allowing them to find their strengths."

Clark notes that it is important to "present a range of choices to your client, all of which you want them to make, or would be happy with them making. If you say something can't happen, you had better go to them with an alternative that you'd be happy for them to pursue. You can't just say to them, 'That's not a good idea.' I find that this can be stultifying to a creative ego. I work very closely with my clients to find out exactly what they do want to do. That's not controlling them. That's shining the flashlight in places they may not have looked."
In organization, it also means leading by example, what MIT's Lippman describes as moral suasion. In their book Buck Up, Suck Up … and Come Back When You Foul Up: 12 Winning Secrets from the War Room (Simon & Schuster Inc., 2002), political strategists James Carville and Paul Begala agree that effective leadership of highly talented individuals demands that a difficult task be executed with a light touch. "If you think you can get people — especially intelligent, talented, creative people — to do what you want simply through threats and intimidation, you're wrong," the authors note. "Try that, and you'll be about as successful as you'd be in shoveling steam."
"A good leader understands that everyone learns differently," Carville and Begala write later in the book. "A bad leader thinks that everyone should learn the way he or she does. The 'my way or the highway' style of leadership is a thing of the past. Those who practice it are going to get whipped every time they compete against an organization that develops talent in every way it can."

Culture Sticks

Good leaders also understand the power of communication and that their decisions are freighted with cultural clues the rest of the organization picks up on.

"The leadership has to be clear about what you value about performance," says O'Neill. "And with the stars, is it just about results and you'll tolerate pretty much anything as long as the stars continue to produce? Those leaders send an important message to those stars, as to whether they want them to stay, and certainly to the fabric of the organization, do they want to feel like second-class citizens?"
In fact, every choice leaders make influences culture, which in turn influences star performance. "Culture is how your consultant behaves when she's out at a client alone," says Tierney. "Culture is how a partner responds when she gets a call from a colleague in a different office, whom she has never  met. Outstanding organizations very aggressively manage their culture. You might say that they micromanage their culture. That can be as simple as being certain the people you put in leadership positions are 'culture carriers' — people whose behavior and values you want more of."
He believes that leaders can significantly shape culture in a period of two to three years, so long as they are conscious about the implications of their decisions: who is assigned to certain assignments, who is invited to meetings, how you pay top performers, who is promoted, who is not promoted.
Tierney recounts how a former manager of Bain's San Francisco office enjoyed chewing gum at meetings. "George did so politely and would throw packages of gum on the table in case anyone else wanted to join him," Tierney recalls. "Well, within three months, people were chewing gum at any given meeting, whether George was there or not."

During an engagement with Enron, Williams quickly noticed that people routinely arrived late at meetings. She says that to do otherwise communicated the notion that you were not overwhelmed with exciting new projects. "The new president of Southwest Airlines makes it a point that she will reply to every single e-mail she receives," Williams notes. "I guarantee you, if you talk to a midlevel manager at Southwest Airlines, they also reply to every single e-mail they receive. I'd place a $100 bet that people at Southwest Airlines don't have full inboxes, because they go through them every day and reply to every single e-mail."

Bazooka, poor meeting etiquette, and empty inboxes may reside on the goofier side of the cultural influence spectrum, but the notion is no laughing matter. Using culture, leadership, and harder levers such as structure and compensation to influence stars and even superstars is a critical issue — and perhaps a sensitive one — but one that must be addressed now more than ever.

Sidebar: Why Salary Caps Will Always be in Fashion

Are your best and brightest rainmakers or star-makers? Master generalists or master sergeants? Franchise players or midlevel salary cap exceptions?
The latter distinction confronts National Basketball Association (NBA) general managers who, under salary cap rules, have about $40 million this year with which to compensate a team of 12 of the most gifted athletes on the planet at a time when one or two of those players command $15 million each.
Although consulting firms do not grapple with salary caps, they face the similar, if less severe, challenge of simultaneously rewarding their Kobe Bryants and Shaquille O'Neals without demotivating the rest of the team. For this reason, top managers often distinguish among different types of stars as a way of understanding the culture, systems, and leadership they need to put in place to extract the greatest value from their talent. And like professional basketball and other disciplines, those strategies for managing consultants require different tactics for superstars than for supporting players.

In academia, deans and provosts influence tenured professors differently than they guide junior faculty. At Dartmouth's heavily tenured Tuck School of Business, Senior Associate Dean Robert Hansen makes sure that tenured professors are as productive and happy as possible. The main issues in working with junior faculty, he says, include recruiting, making sure they're doing everything they can to get promoted, and deciding who is promoted when.

The superstar consultant often qualifies as a master generalist, yet firms also employ a growing number of master sergeants, specialists, and even stars who may not respond to management strategies and systems based on an "up-or-out" mandate.
"The workforces of professional services firms are displaying more occupational diversity than ever before," says Tom Tierney, former Bain CEO and current chairman of its nonprofit affiliate, The Bridgespan Group. "You have people working part-time, taking sabbaticals, leaving the firm and returning years later, and moving into different phases of their careers where they might be of counsel, limited partner, or something along those lines." For that reason, managing superstars raises the question of what that approach means to valuable non-superstars.

Perhaps the most important distinction to draw at consulting firms is between rainmaking skills and star-making skills. "If you're lucky, you find people who have both of them," says Tierney. "But often, people have more of one and less of the other." And what if a thriving rainmaker is also a star-breaker? "That's a cultural question," Tierney replies. "If you want to build an extraordinary organization, that person has to be fixed or leave. Because in the short term, you really want the rainmaking. In the long term, you have to have the star-making."

Before stars can be managed, their value, impact, and unique motivations should be defined. That understanding should inform the firm's culture and its organizational structure. "And you don't necessarily have to take a one-size-fits-all approach," says Colleen O'Neill, talent management leader for Mercer HR Consulting in Atlanta. "You can have one part of your business that's superstar-oriented and another part that has a different value proposition and different career paths."

Sidebar: A Tuck Dean says Talent Management is Academic

Robert Hansen, the senior associate dean at the Tuck School of Business at Dartmouth, cringes at words like "managing" and "leading" when they come up in the context of working with faculty.
"You can manage the organization," says Hansen, who is responsible for hiring, retention, promotion, and research budgets at Tuck, which placed first among all U.S. business schools in a Wall Street Journal/Harris Interactive survey of corporate recruiters. "Managing the individuals means creating the environment that provides the incentives and resources that allows these stars to be as productive as possible." As a manager with London-based LEK Consulting from 1988 to 1990, Hansen has experience that enables him to compare the challenges of managing top talent, or at least "enabling it to flourish," in two different disciplines.

CM: What does it mean to lead highly talented individuals?
Hansen: I'm not even sure you can say that you lead the faculty. You can lead and manage the strategy of the organization. In a lot of these professional firms, and certainly in an academic environment, it's possible for an individual to get pulled a little bit away from the organization. They have tremendous freedom. You have to create a set of incentives that keep them pulling for the school with most of their weight rather than going into a lot of other things.

CM: How do you enact those incentives?
Hansen: At the junior level, it means promotions. At all levels, salary comes into play, but most of these people are not here for the money. It's a question of what kind of resources they can have around them to help them impact the world of research. One of the decisions that needs to be made is whether I should fund the research program this person wants. There are times I cannot do that, at least not completely. If that's the case and if it's a senior person, I have to ensure that they understand the justification for that.

CM: How did your academic experience translate to your role as a consulting manager?
Hansen: Probably the biggest difference between me and the other managers was the way I worked with the more junior consultants. I said, "Look, this is the project, this is what we have to do. I'm not going to watch over you every single minute." And face time was absolutely not of interest to me, because face time in academics is not of interest at all. It's pure output. I'm not going to measure your input, I'm going to measure your output. All I want to do is get it done in a timely fashion. It worked well, but I'm not sure it would work well across the board for everybody.

CM: How do the two disciplines differ?
Hansen: "When I was in consulting, I don't think there was as much freedom until you reach a very senior level and you can start thinking of developing new practice areas. And the bottom-line focus is always there, whereas our academic world is one where we're interested in the truth about the way the world of business works. That's our research strategy, and you can go off in all kinds of directions there as long as you're having an impact on the world of scholarly discussion. And we understand that these things sometimes take years to come to fruition. It's like research and development.