Building a sustainable advantage: a star system

Businesses that build talent—not merely acquire it—are more sustainable in the long run

Executive communications

This article, written on behalf of Colliers International’s president and CEO Doug Frye, first appeared in the Spring 2012 edition of Knowledge Leader magazine.

“Someone who is exceptional in their role is not just a little better than someone who is pretty good,” Facebook CEO Mark Zuckerberg told The New York Times in a recent interview. “They are 100 times better.”

Zuckerberg made this comment to justify paying nearly $4 million per employee for the company FriendFeed in a practice that has been dubbed “acqhiring.” Shelling out big bucks for superstars doesn’t just happen in Silicon Valley; we see it in sports with free agents, and we see it in commercial real estate.

Zuckerberg’s comment sparked debate, prompting business leaders to consider how the quest for talent can impact the bottomline and the culture of the company. And it raised the question: Is one brilliant employee really worth more than 100 average professionals?

In his Harvard Business Review blog, Bill Taylor, co-founder of Fast Company magazine, referenced Zuckerberg’s remark and asked, “Have we become so culturally invested in the allure of the free agent … that we are prepared to shower millions of dollars on a small number of superstars rather than a well-assembled team that may not dazzle with individual brilliance, but overwhelms with collective capability?”

I think this suggests that there are only two ways for a business to spend money on human capital. But it’s a false dilemma. There’s another choice—one that I embrace: Create a star system.

A star system is designed to elevate people with the right core attributes (what we call SOAP: smart, optimistic, ambitious and passionate), by providing business skills, knowledge and behavioral coaching to help them become superstars.

Stars are volatile; star systems are sustainable

No matter your industry, top performers can be bought by competitors. In a business where our intellectual capital rests not in patents or products but in the minds of our people, stars are volatile assets. A star system, however, is sustainable because we are constantly building experts and growing future leaders. The investment becomes a core company asset, a differentiator that can be scaled for broader business impact.

Our professional development arm, Colliers University (CU), is our star system. In a four-year study of 468 professionals in North America, a typical professional’s revenue grew 13 percent per year. However, salespeople who took one of CU’s core classes achieved 28 percent growth, and salespeople who took six or more core classes increased their annual revenue an average of 84 percent per year.

The correlation is impossible to ignore: the more courses our sales professionals took, the more they increased their revenue. In an industry that measures salespeople by dollars earned, that’s a star system in action.

Stars can be toxic; star systems lead culture

Stars are hired for the revenue they can produce or the points they can score, but as a result, other aspects of their personality might be ignored. No doubt you’ve seen major conflicts arise from this, both in sports and in business. Team infighting is one side effect; poor client service is another.

We refused to make that mistake. We knew that if we didn’t share the same values, we’d soon face breakdowns regardless of revenue.

Our due diligence for several new business partners ensured alignment both commercially and culturally. I see our star system as an opportunity to educate people about the kind of business we are—the way we treat our clients and each other—and our commitment to creating memorable client experiences.

Stars can be self-focused; star systems remain client-focused

Many star athletes, entertainers and professionals lose focus on what matters: the clients. For a celebrity or athlete it may take the form of complaining about fans or snubbing autograph-seekers; for a broker it may take the form of being too busy to return a call.

At Colliers International, our business is built to serve clients—the better we serve them, the more we benefit. We won’t benefit from self-centered stars, so it makes sense to build a star system where a keen client focus is culturally embedded, where you can’t become a star without it.

We engineered a system called Client Engagement to build service teams around our clients, rather than individual stars building clients around themselves.

Client loyalty cannot be secured by a single star’s tie to a client. We’ve found it takes many contacts and services to create loyalty, and only a star system is able to support our clients’ entire cycle of real estate needs.

So while the lone star vs. multitude debate may continue, I’ll keep backing the star system—the best way a business can provide their clients with phenomenal service and ensure its long-term success.