Originally posted on The Horizons Tracker.
In talent management circles, the brain drain is usually something with purely negative connotations. Knowledge walks out of the door, but also the connections and network that those employees take with them.
It’s on this that a recent paper1 focused, suggesting that those departures can be beneficial for innovation, purely because those former employees will now expand their networks in new horizons, and if your relationship with them remains strong, it can significantly boost your own innovation efforts.
Bridging between organizations
The logic is fairly intuitive. When employees move on to pastures new, they inevitably retain links with their former colleagues. Even if this isn’t an active relationship, sites like LinkedIn allow us to keep tabs on what they’re doing.
The study reveals that the key to a successful parting is where the departing employee ends up. The authors monitored the movement of talent within the fashion industry over a 10 year period. The industry was chosen precisely because innovation is so crucial to fortunes, but also there is a high degree of movement between fashion houses.
The creativity of each brand was determined via the trade journal Journal du Textile, who rate the creativity of each fashion house per season. The researchers were especially keen to learn whether losing a designer overseas was more impactful than losing one domestically. The hypothesis being tested was that an overseas departure would help bring in ideas from further afield.
Perhaps unsurprisingly, that hypothesis turned out to be remarkably true. Indeed, there seemed to be no limit to the benefits derived by the apparent brain drain to foreign competitors. This was certainly not the case when it came to losing people to domestic rivals, which seemed to have limited effect in either a positive or negative sense.
Also of particular interest were the kind of firms people moved to. When departures were to a fashion house of similar or higher status than the one recently departed, there was no benefit to the original company at all, but there was a significant boost to creativity in firms whose employees departed for lower-status firms overseas.
The authors hypothesize that this is because ideas probably flow back and forth regardless, but it is only the higher status firms that have the capacity and capabilities to capitalize on them.
The study joins a number of previous efforts that highlight the importance of a strong corporate alumni network. For instance, a study from last year found that maintaining good relationships with ‘alumni’ was particularly important in a modern era that is typified by a high turnover and movement of staff.
“When we, as researchers, study organizations, or even when we study how managers look at employees, we see that businesses often assume that the relationship terminates when a person leaves the organization,” the researchers say. “However, in our research, we extend the employment boundary outside of the organization. We believe that the relationship does not end there and you have to be mindful of the people who actually left the organization.”
The study found that when we have positive relationships with both our former boss and former employer, these tended to carry through into our next workplace. These people can then become crucial ambassadors for your company, whether that’s in becoming future customers or even in a more broad knowledge centered context.
“They can also come back to work for you as boomerang employees,” the authors note. “They are a very powerful force and we cannot ignore that.”
It all suggests that we perhaps need to reassess the very notion that a brain drain of talent is always a bad thing, especially if that talent happens to relocate in industries and regions that allow for a fertile recombination of ideas.
Article source: How employees leaving can help us to innovate.
- Shipilov, A., Godart, F. C., & Clement, J. (2017). Which boundaries? How mobility networks across countries and status groups affect the creative performance of organizations. Strategic Management Journal, 38(6), 1232-1252. ↩