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.