Where the stars still shine: Some effects of star-performers-turned-managers on organizational performance

Abstract

Research summary: Do former star performers become superior managers? If so, why? Using performance data from a professional sports league, this study finds that organizational performance is greater under star-performers-turned-managers (SPTMs) than other managers. We develop a typology of six causal mechanisms by which SPTMs might affect organizational performance, and we indirectly test for each of them using data from a professional sports league. Our results indicate that SPTMs outperform other managers, and that this benefit is due to their role modeling and their superior ability to train and incentivize subordinates. Managerial summary: Organizations are often, but not always, led by managers who previously achieved outstanding performance in an individual contributor role. Do such star-performers-turned-managers (SPTMs) benefit an organization's performance more than other managers? If so, why? Our statistical analysis finds that National Basketball Association (NBA) teams managed by head coaches who had previously been All-Star NBA players win games more often than other NBA teams, and also that this effect is due to a combination of SPTMs serving as a role model for their players, as well as training and incentivizing their players better.