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Nonconsensus Strategy
Do
those who work for you feel safe when they innovate, even if they are
alone?
Have you
ever found yourself boasting about a time when you persevered against all
odds, even when others said you were wrong? Of course, we all have. There
is something irresistible about the rugged individualist, going it alone against
the consensus. Tearyeyed renderings of “my way” sung in high-end bars,
chants against the dominant paradigm heard at occupy Harvard, the wealthy
alumnus of an elite business school claiming to be a self-made man. For
most of us, attempts to make this claim are the stuff of comedy; yet they
are evidence that we would love to be the lone innovator courageously
bucking the trend. No wonder, because history has been written by such
people.
Consider the story of Qualcomm. Years ago when
Irwin Jacobs was just getting Qualcomm off the ground, the world was pretty
skeptical about his attempt to turn CDMA technology into a working wireless
standard. The technology was complicated, yet Jacobs’ team claimed to have
made it work. Doubts about this claim mounted, even among experts; some
esteemed faculty at Stanford University concluded that Jacobs’ work
“violated the laws of physics.” If you ever feel surrounded by doubters,
imagine how that must have felt for Irwin Jacobs and his fledgling firm.
Today we know that Qualcomm was successful in
bringing CDMA technology into the market, and Jacobs is often described as
a genius. This success is all the greater because of those early doubts.
With so much controversy surrounding CDMA, most of the good early research
was done by Irwin and his team. The benefit from being right, in a sea of
doubters, is that you end up with most of the intellectual property. So it
has been for Qualcomm. To this day they enjoy a handsome stream of
payments: The reward for being right about a non-consensus strategy. As the
renown venture capitalist Andy Rachleff likes to say, the sweet spot for an
innovator is to be right about a new opportunity before the rest of the
world has reached a consensus. After all, if you are right and everyone
else agrees, then you are unlikely to see much of an upside. This fact is
at work when we say that we would happily go it alone. We know we have an
edge when we’re right and others are in doubt. But what if you are wrong?
If you are wrong, would you rather be consensus or non-consensus? No doubt:
If I am wrong, I just don’t want to be alone. Because if we are all wrong,
who can blame me? Whereas if I’m wrong and alone, now I am a fool. Everyone
said I was wrong, but I stayed with my idea anyway, and sure enough I am
wrong. What a fool! Like Don Quixote, I did it my way. In many
organizations, the fear of being a fool is stronger than the hope of being
a genius. We are human, after all, and vulnerable. We know that pursuing a
non-consensus idea puts us at risk of being seen as a fool. So it is that
people so often stay with the consensus, remaining silent about their ideas
that buck the trend. After all, as long as we remain with the consensus,
failure is tolerable; it is failure as the lone fool that we fear.
Is your organization a safe place to be
non-consensus? Do those who work for you feel safe when they innovate, even
if they are alone? You should frankly ask yourself these questions. Great
leaders make it safe for others to innovate. And history then is written about
those who were correct about new opportunities, even though there was no
consensus.
The academic work behind these ideas can be traced
to James March’s paper on exploration and exploitation. Research showing
the returns to the nonconsensus strategy appears in my paper with Elizabeth
Pontikes.CD
William Barnett is Thomas M. Siebel
Professor of Business Leadership, Strategy, and Organizations at the
Stanford Graduate School of Business
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