Autonomous Transformation

CHAPTER 17The Reformational Economics of Omission and Commission

For executives who want to maximize their job security in a public or private organization that deprecates mistakes and ignores errors of omission, the best strategy is to do nothing or as little as possible.

—Dr. Russell Ackoff, in Transforming the Systems Movement

Most people are familiar with the fact that Blockbuster passed on opportunities to acquire Netflix in 2000. What most people do not know is that Blockbuster built a streaming service 12 years before Netflix did that never made it to market.

When Ron Norris, a consulting executive whose team had designed, built, and successfully piloted the first streaming service in 1995 on behalf of Blockbuster (called Blockbuster on Demand), received a call from a senior executive with oversight of the program, he expected a congratulations, gratitude, and questions about how quickly he and his team could bring this to market.

Instead, he was directed to cancel the initiative altogether.

The executive informed him that the new offering would eliminate late fees, which accounted for 12% of Blockbuster's revenue and was therefore not a suitable path forward.

When Blockbuster filed for bankruptcy in 2010, this executive may have remembered the conversation he had with Norris and imagined how differently things would have turned out had he not chosen to cancel the initiative, but one thing is certain: that decision, despite disastrous consequences to the organization, ...