Editor's note: A version of this article previously appeared at SteveBlank.com.
Faced with disruptive innovation, you can be sure any possibility for innovation dies when a company forms a committee for an "overarching strategy."
I was reminded how innovation dies when the email below arrived in my inbox. It was well-written, thoughtful and had a clearly articulated sense of purpose. You may have seen one like it in your school or company.
Skim the abridged version, and take a guess why I first thought it was a parody. It’s a classic mistake large organizations make in dealing with disruption.
From: The Strategy Committee
To: Faculty and Staff
We believe online education will become increasingly important at all levels of the educational experience….it is of paramount importance that we develop an overarching strategy that enables and supports online innovation.
To this end, we are convening a Strategy Committee that is charged with overseeing our efforts and accelerating implementation. The purpose of the Strategy Committee is to provide guidance and coordination, and to enable innovation….
A Policy Team, which is charged with coordinating detailed implementation plans for specific projects, will report to the Strategy Committee.
The Strategy Committee will be meeting for a half-day retreat in the coming weeks to begin work. Stay tuned for further updates.
We Can Figure It Out in a Meeting
The memo sounds thoughtful and helpful. It’s an attempt to get all the "right" stakeholders in the room and think through the problem.
But a more useful purpose for a university committee could have been figuring out the goal of going online. It could have said "the world expects us to lead so let’s get together and figure out how we deal with online education." Our goal(s) could be:
- Looking good
- Doing good for all
- Doing well by enrolled students
- Fixing the business model to fix a budget crisis
- Having a good football team -- or at least filling the stadium
- Attracting donations
- Attracting faculty
- Oh and yes -- building an efficient, high-quality education machine
But the minute the memo started talking about a "policy team" developing detailed implementation plans, it was all over.
The problem is that the path to implementing online education is not known. In fact, it’s not a solvable problem by committee, regardless of how many smart people in the room. It is a "NP complete" problem -- it is so complex that figuring out the one possible path to a correct solution is computationally incalculable. (Click here to see my diagram that explains more.)
Innovation Dies in Conference Rooms
The "let’s put together a committee" strategy fails for four reasons:
- Online education is not an existing market. There just isn’t enough data to pick what is the correct "overarching strategy".
- Making a single bet on a single strategy, plan or company in a new market is a sure way to fail. After 50 years even the smartest VC firms haven’t figured out how to pick one company as the winner. That’s why they invest in a portfolio.
- Committees protect the status quo. Everyone who has a reason to say "No" is represented.
- Dealing with disruption is not solved by committee. New market problems call for visionary founders, not consensus committee members.
My bet is that there will be more people involved in this school’s "strategy committee" than in the startups that find the solution.
In a perfect world, the right solution would be a one-page memo encouraging maximum experimentation with the bare minimum of rules (protecting the school’s brand and the applicable laws.)
- Innovation in new markets do not come from "overarching strategies"
- It comes out of opportunity, chaos and rapid experimentation
- Solutions are found by betting on a portfolio of low-cost experiments, with a minimum number of constraints
- The road for innovation does not go through committee