After Endeavour Mining acquired True Gold Mining last April, the junior company’s executive team in Vancouver found itself out of a job. It was not as though they’d failed—quite the opposite. “We took that company from 18¢ [per share] to over a dollar in a year,” says Christian Milau, True Gold’s suddenly ex-CEO. The team had brought a mine into production in Burkina Faso, hardly an easy operating environment, and felt it had something special going on.
So the members made a pact: they’d stick together and try to find a new career opportunity for all of them. “We knew that after a certain period of time, six months to a year, we’d lose some people because they’d have to pay the mortgage,” Milau says. Within four months, though, they found their vehicle: Luna Gold, which hopes to reopen a shuttered mine in Brazil. In August, the company announced it was hiring Milau’s five-member team en masse, in place (and with the assistance) of the previous management.
Such team transplants are rare, but not unheard of. In 2015, Facebook group-hired the partners and select staff of Teehan+Lax, causing the acclaimed Toronto design shop to close its doors. Early in 2016, Tesla Motors poached a team of executives and chip design specialists from Advanced Micro Devices to help develop its self-driving cars.
A more common scenario sees a new boss come into a company and promptly hire trusted lieutenants from his or her previous postings. The incoming CEO of Canadian Pacific Railway, Keith Creel, was a protege of retiring CEO Hunter Harrison at both CP and, before that, rival Canadian National Railway. In other situations, teams reconstitute themselves gradually, one by one, like the former executive suite at Coastal.com, who went on to run another e-commerce company, Shoes.com.
There are distinct advantages to hiring people who are familiar with each other’s strengths, weaknesses and work habits, Milau says. “Everyone can just get to work on day one.” A growing body of academic research links team familiarity with better performance, too. A 2013 study of 1,004 development projects involving 11,376 employees at Indian software services firm Wipro found that when the tenure of co-working between team members increased 50%, the incidence of defects decreased 19% and deviations from budget went down 30%.
In another study, customers reported a 10% increase in performance from teams that had a high level of mutual work experience. Explaining their findings in Harvard Business Review, the study’s authors, Harvard’s Robert Huckman and Bradley Staats of the University of North Carolina, pointed to the time it takes new team members to learn how to communicate with one another and determine who is the best authority in different areas. Familiarity enables teams to better respond to changed circumstances and integrate their knowledge into workable solutions. It’s also a source of competitive advantage: Rival organizations find it hard to replicate a team’s success by hiring away just one member.
There can be pitfalls to hiring multiple people at once, though. An organization must decide beforehand whether it intends to completely change the corporate culture or to integrate the new hires with the existing staff, says Gassia Maljian, head of executive search at Toronto recruiting agency Creative Niche. She does not recommend hiring a team, as Luna Gold did, without interviewing all the members, either. But Maljian acknowledges that the chance to hire a proven posse might be too good to pass up. “You know that team has synergy,” she says.
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