The Experts

How the imprimatur of one person can lead you in the wrong direction

It is a classic story that when you are setting up a board of directors for a start-up the key discussion item is as to who should be on it. Apart from founders and one or two directors representing the investors, the discussion will always go in the direction of having ‘an industry expert’ on the board. Now that means different things to different people. Does it mean being an expert in the technology the company is developing and trying to sell or an expert in the key market vertical that the company is trying to sell into? Or both? Be aware of the distinction here, but for my argument let’s just assume both.

There has been a classic case in Vancouver a number of years ago where a rapidly growing software company during its first few years faced just this dilemma. ‘We need an industry expert on the board in order to capture our key market’, basically that was the issue they were trying to resolve. The company went about recruiting the director with said expertise and he joined the board. It took a while for the results of his involvement to bear fruit and suffice it to say, they weren’t that good. What happened was that all other directors on the board suspended their better judgment and followed the views of the expert director, because after all, he was the expert. Sales plummeted and the company lived through a near death experience, thanks to their good friend, ‘the expert’.

What happened was that although the expert was indeed a solid and experienced individual, his views on the market were no longer relevant and the way he had come to interpret market data was flawed. Nothing against the man of course, but the world had moved on and his expertise was somewhat outdated. The problem was that all other directors failed to question the man’s wisdom and were gently let down the ravine of outdated analysis which in turn contributed to bad results. They were able to course correct in time and acquired for hundreds of millions many years later, but the lesson stood.

This is why I have become fairly critical of the ‘expert’ thesis. The lesson here is that it is unwise to bank on one person’s opinion, no matter how qualified it is. It is far better to have a range of opinions at the table and let each of these compete with one another. We are all shaped by prior experiences, viewpoints and biases. It is far better to put a board together with smart people who together can solve any problem that comes their way. You could even argue for ‘generalists’, people with different business backgrounds who have been around for a while and who have seen lots. Their expertise is not specific, no, but they have seen it all and together they can work out anything that lands on the board’s table.

And this of course holds true for society at large, witness the endless debates over science and listening to the scientists. I always get uncomfortable when people proclaim ‘listen to the science!’ What science ? Whose science ? Living through the Covid-19 pandemic we now know that in a group of scientists you will find a wide array of opinions, different interpretations of data and strong viewpoints one way or another. It would be foolish to bank on the one scientist to lead us out of the mess. And as we have seen, reputable scientists tend to have deep disagreements with one another. Rather put a number of them together and see how they fare, or what politicians do, sift through all the available scientific data and put together a policy based on all the different perspectives. It is never ever perfect, but it will be a whole lot better than banking on that one expert or scientist who claims to know it all.

Photo: a panel from the days we still had in-person meetings. Panels can only be successful if different opinions are presented and panellists debate with one another. The audience is always very capable of distilling the different viewpoints and coming away with a feeling of having learned something.