Money Matters

Too Many Experts Can Hurt Your Innovation Projects

(Source: hbr.org)

If you need an appendectomy, call a surgeon. But if you’re seeking a CEO for a surgical device company, an MD may not be your best choice. To be sure, entrepreneurs in highly specialized and technical industries need the knowledge that only users (doctors, lawyers, engineers, and the like) can provide. Doctors understand what other doctors will value in a new product; lawyers know what other lawyers need. But you can have too much of a good thing — including input from such experts. Researchers have found that innovation thrives when expert users make up about 40% of an invention team. Any less and the company will lose sight of what its customers need; any more and the group will tend to converge on old ideas. In a study of 231 surgical instrument ventures over a 25-year period, the researchers found that having too many doctors on the team — and in the wrong roles — was a liability for young companies trying to innovate. Most notably, they discovered that firms with physician CEOs were less innovative (based on the rate at which their products received approval from the U.S. Food and Drug Administration). Their study also offered several practical insights for entrepreneurs hoping to avoid these stumbling blocks.

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Matthew Dent/Getty Images

If you need an appendectomy, call a surgeon. But if you’re seeking a CEO for a surgical device company, an MD may not be your best choice.

To be sure, entrepreneurs in highly specialized and technical industries need the knowledge that only users (doctors, lawyers, engineers, and the like) can provide. Doctors understand what other doctors will value in a new product; lawyers know what other lawyers need. But you can have too much of a good thing — including input from such experts. In fact, my colleagues and I have found that innovation thrives when expert users make up about 40% of an invention team. Any less and the company will lose sight of what its customers need; any more and the group will tend to converge on old ideas.

Earlier this year, Sruthi Thatchenkery, Michael Christensen, Stefanos Zenios and I completed a study of 231 surgical instrument ventures over a 25-year period. We  found that having too many doctors on the team — and in the wrong roles — was a liability for young companies trying to innovate. Most notably, we discovered that firms with physician CEOs were less innovative (based on the rate at which their products received approval from the U.S. Food and Drug Administration). Our study also offered several practical insights for entrepreneurs hoping to avoid these stumbling blocks, which I’ll discuss below.

Why do firms led by doctors tend to lag behind in innovation? In part, we think it’s because expert users have spent lots of time getting comfortable with existing tools and methods. As a result, they’re invested in their field’s status quo and may have trouble seeing the value in a novel idea. We found that although expert users excelled at refining existing products, they couldn’t always recognize a potential breakthrough innovation when they saw one. As one physician CEO we interviewed for our study confessed, “If you show me a prototype, I can say, ‘Well, you could do this better.’ … I know very well how to help a company optimize its product … but I don’t know how to invent something that was never invented before.”

As experts in medicine, doctors may also lack the administrative skills and business acumen required to lead a new venture. When we talked to non-physician investors and cofounders, we heard that doctors felt frustrated when, for instance, their companies’ products didn’t find customers right away. “Things like that are constantly a surprise to them,” one non-physician executive observed. Doctors, we found, sometimes forget that it isn’t enough to build a great product; you’ve also got to know how to sell it.

It’s not all bad news for physicians: Our study also showed that, up to a point, doctors can actually help firms innovate when they serve in inventor roles or as board members — as one voice among many. In these roles, doctors offer technical feedback and strategic guidance that draws on every aspect of their expertise: their medical knowledge, clinical experience, and intuitive understanding of other doctors. And their hard-earned wisdom can temper the expectations of overconfident board members or technology-focused entrepreneurs.

However, we found that firms ran into trouble when they had too many doctor inventors or too many doctors on the board. Inventors need to draw from a pool of different ideas in order to innovate; being surrounded by too many peer experts can result in group think and a return to familiar approaches. And a board stacked with doctors can devolve into infighting over who is the “ultimate” medical authority.

So, where does this leave entrepreneurs working in fields like law, medicine, and engineering? Are all ventures led by expert users doomed? Not at all. We think leaders can avoid the pitfalls of expertise by keeping a few things in mind:

Find the right roles for the right people. Experts best serve the firm in roles that give them regular opportunities to draw on their specialized knowledge. This helps them “stay in shape” and retain the skills that set them apart from other members of team. We found that expert users are most helpful when they serve in positions where they can broaden the variety of ideas under the firm’s consideration — typically, governance and technical roles. As board members and inventors, experts’ wealth of expertise is activated in ways that help them offer the ideas and insights others wouldn’t have. They are least successful in roles such as CEO that require them to winnow options and decide which route to pursue, and they struggle when faced with radical ideas that depart from their own training and experience. So when considering where user experts belong in your company, ask yourself, “Is this a role that focuses more on generating a variety of ideas or one that focuses on selecting from among ideas?”

Know how your role affects you. CEOs have to make strategic decisions about future products, often quickly and with limited resources. Under time pressure, expert CEOs are likely to be influenced by their past experiences. Promising but novel products require more time to evaluate — time CEOs usually don’t have. As a result, good ideas may get discarded unfairly. This cycle can be avoided if experts consciously recognize the demands of their job. With greater awareness, leaders can give more time to novel ideas before they dismiss those proposals out of hand.

Be open about what you do not know. A successful company needs experts from a variety of fields. As a leader, seek diversity on your team. Build a culture in which you and others feel free to acknowledge not only what you know but also what you do not know. Industry insiders are invaluable, but so are outsiders who can see industry challenges and opportunities with fresh eyes. Try not to build all-doctor, all-engineer, or all-MBA teams. Consider pairing up with a co-CEO who brings a different perspective.

By keeping these guidelines in mind, entrepreneurs can draw on experts’ knowledge in ways that help, not hurt, their firms — and that may lead to important technological breakthroughs.

More Info: hbr.org

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