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Marc Andreessen: IBM's 'Wild Ducks' Problem Explains Why Big Companies Can't Innovate

By Marc Andreessen · Leadership · 2 min read

IBM had 440,000 employees. The first half of every meeting was just IBMers introducing themselves to each other. But they had 8 people called Wild Ducks who got to break all the rules. That model worked for 50 years.

Key Points

The number of people who can actually do new things is a very small set — 3, 8, maybe 10
IBM's Wild Ducks: 8 people who could break all the rules, reported to the CEO, got whatever they needed
When venture capital emerged, the wild ducks could leave and start their own companies. That's what killed IBM.

How do you have a large bureaucratic organization with rule followers, but still have that spark of creativity? Mostly it's impossible.

The Wild Ducks

Andreessen: IBM had a system that worked for 50 years. Most employees were expected to follow rules — dress the same, act the same, everything out of the playbook. But they had this category called Wild Ducks, an idea from founder Thomas Watson.

There were eight of them. They got to break all the rules. They got to invent new products, go off and work on something new, pull people off other projects. Budget when they needed it. Reported directly to the CEO. Management knew the 6,000-person division was not going to invent the next product. It was going to be crazy Andy Heller in his cowboy boots.

Eight wild ducks who could break all the rules. Management knew the 6,000-person division wouldn't invent the next product.

The Paradox

Andreessen: How do you have a large bureaucratic, regimented organization full of rule followers — people who are jealous of their status and don't want things to change — but still have that spark of creativity?

Mostly it's impossible. Mostly it just doesn't happen. Those people get driven out.

How do you keep creativity in a bureaucratic organization? Mostly it's impossible. Those people get driven out.

Venture Capital Killed the Model

Andreessen: In tech, what happened is those people get driven out — because we will fund them. The simplest explanation for why IBM ultimately caved is the emergence of venture capital. A parallel funding system where the wild ducks could actually leave and start their own companies.

This is what doesn't exist at the university level. This does not exist at the government level.

The wild ducks could leave and start their own companies. That's the simplest explanation for why IBM caved.