Why does it matter if a division fails? It's only one part of many as if you have many divisions doing the same thing trying competing for the same prize, with the winning division getting it, what's wrong with that? Isn't that how Apple made it to the top?
I don't get this argument. Why not just split the division or create two and have them fight it out to create the better product? Kind of like the Mac, Lisa, and Apple II team worked?
It matters a great deal if a division fails precisely because most companies only have one of them. If the company had two, certainly one could fail - but often companies don't have the resources for two. Splitting the division into two equal parts often isn't practical - sometimes it takes five people to complete a job and the company only has money for five salaries. And for most functional divisions - human resources, marketing, product management, finance, etc. - I really don't understand how the company could have two parallel organizations operating simultaneously, even if they had the resources, without causing damage to and confusion in the company.
I get that you'd like things to work differently - but I can only tell you how they work currently, at every company I've ever been a part of. If you can persuade a company to hire you as the vice president of something without lengthy experience, that's terrific, and I wish you much success. But you asked why companies don't generally do this, and I've told you.
Yes, some companies really do split the functional divisions of HR, marketing, product management, finance, etc. They are rare but they are quite successful otherwise I wouldn't be asking this question to figure out why more companies don't do the same?
These positions are only partially about creativity or being entrepreneurial, even at startups. In a high-functioning organization, creativity and entrepreneurship comes from the organization as a whole - it's the job of every employee.
Mostly, these positions are about people management - building a team of great people and getting the best out of the team as a whole. This is really hard, and it takes a lot of practice. I've certainly cocked it up more than once.
Since people management is something that you learn by doing, it makes sense to hire someone who's both done the job of the type of employee they'll be managing and has a track record of managing the type of employee they'll be managing. Bringing in someone inexperienced is too much of a risk - if you fail, it's not just you that performs poorly, it's your entire team.
You simply can't relate this situation to a VC's (or more likely, an angel's) willingness to put a small amount of money on an inexperienced founder - the two situations are very different. A VC is in the business of risk - he has a large portfolio and expects most of his investments to fail. A CEO is in charge of one and only one company, and the VPs he hires are all in charge of critical functions. Often, he can't afford to have any of them fail.