RENEE MONTAGNE, host:
Here's one lesson to draw from this weeks move by the Paramount movie studio, which parted ways with Tom Cruise. Paramount's not so fond farewell to Cruise was a reminder that organizations will put up with odd behavior from a star until it hurts business.
NPR's Frank Langfitt reports.
FRANK LANGFITT reporting:
Movie studio executives figured that when Tom Cruise began lecturing Matt Lauer on NBC's Today Show he cost his latest film, Mission Impossible III, millions of dollars in ticket sales.
(Soundbite of Today Show)
Mr. TOM CRUISE (Actor): (On The Today Show) Psychiatry is - is a pseudoscience.
Mr. MATT LAUER (Host, The Today Show): (On the Today Show) But aren't there examples where it works?
Mr. CRUISE: (On the Today Show) Matt, Matt, Matt, you don't even - you're glib. If you start talking about...
LANGFITT: This week, Sumner Redstone, chairman of Paramount's parent company, ripped Cruise for letting his public outbursts hurt his box office draw.
In the past year, employers have criticized other high-profile figures for more typically troublesome behavior: among them, actress Lindsay Lohan. Last month, the producer of her latest movie called the hard-partying starlet, quote, a spoiled child, for failing to show on the set. And last season, the Philadelphia Eagles essentially fired star wide receiver Terrell Owens for repeatedly criticizing the team's quarterback.
The cases reflect a challenge organizations face every day - how to manage a disruptive star. Boris Groysberg teaches at Harvard Business School. He says high maintenance performers like Owens can take a huge toll.
Mr. BORIS GROYSBERG (Harvard Business School): And you basically have an addition of one individual, who borderline destroyed that franchise for at least a year.
LANGFITT: Star systems extend beyond Hollywood in sports to other fields, like fashion, finance, and high tech - where one person can spark a breakthrough product or generate huge revenues. Peter Capelli is a management professor at the University of Pennsylvania's Wharton School. He says companies have often put up with troublesome stars because they bring in so much money.
Professor PETER CAPELLI (University of Pennsylvania Wharton School of Business): I think historically organizations were willing to ignore this bad behavior. And I think the reason for that was they could easily see the effects of the employees' own performance. What they couldn't easily measure were the negative effects the employees were having on the people around them.
LANGFITT: Capelli says that is changing. More companies are using 360-degree evaluations, where peers and underlings critique the performance of their colleagues. And Bob Sutton, a Professor of Management Science at Stanford, says more companies are discovering the hidden costs of some high performers.
He cites an obnoxious employee at a firm in Silicon Valley.
Professor BOB SUTTON (Stanford University): He was bringing in about half a million dollars in business a year. But HR figured out that it was costing about $200,000 a year to deal with his jerk problems. He was going through a secretary every few months, and since nobody in the firm would work with him, they'd have to recruit one from the outside. That cost $85,000. They had to have an executive coach and anger management therapist for him.
LANGFITT: And Boris Groysberg, of Harvard, says that some stars are overrated anyway.
He and two other researchers studied the performance of star stock analysts after they moved to new firms. They found that performance routinely plunged. One reason - the analysts had built their success on the shoulders of the people who'd helped them at their old jobs.
Mr. GROYSBERG: You get your work done through other people. So if you move to another organization, you leave those relationships behind and you have to recreate the network at the new place.
LANGFITT: Now, after 14 years at Paramount, Tom Cruise is on his own. He says he plans to raise a hundred million dollars to finance his new films, and he's looking for a new distributor.
Frank Langfitt, NPR News.
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