The not invented here syndrome, and what firms can do to overcome it

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What is the "not invented here" syndrome?

The not invented here syndrome is the tendency within firms to ignore innovations that occur outside of the firm. Internal innovations – where companies develop a product or technology internally – are regarded as better than innovations external to the firm. Changes made by competitors, customers, and other industries can be ignored because they were not developed by the company. 

The negative consequences of the "not invented here" syndrome

Part of the reason why the not invented here syndrome can be dangerous is that it can result in key innovations being missed. Rather than integrating the broader developments that are happening, a not invented here mentality can result in possible improvements being ignored.

The other danger of the not invented here syndrome is that it can result in technology developments being much more costly than they need to be. There may be a tendency to re-invent the wheel, as companies look to re-create inventions that they could of more easily integrated by working with other firms.

Why employees may not value external innovations

There is no reward for integrating external ideas

Part of the reason why employees may not integrate external ideas is that there is no reward for it. Companies may give significant recognition of internal developments – potentially bonuses for patents or other internal developments – but little to no recognition for identifying external ideas. 

The company is seen as so innovatively superior, that external innovations are inferior

Another reason why employees may not value external innovations is that the firm is considered so superior in terms of innovation that anything external must be inferior. If the firm is actively looking down on external innovations, then it can be hard to identify valuable innovations to integrate into the company. 

What firms can do to avoid the "not invented here" syndrome

Encourage the benefit of looking for innovations external to the firm

Part of an approach to reduce the not invented here syndrome is for top management to actively encourage looking outside of the firm. Analyzing the innovations happening in other areas can highlight the importance of looking externally – encouraging employees to actively consider external innovations.

Reward integrating external developments (in addition to internal developments)

Another component of encouraging employees to integrate originally externally developed innovations is to start rewarding externally developed innovations. Shifting the balance between how highly internal innovation is rewarded, and how little external innovations are rewarded, can go a long way at encouraging employees to look beyond the company’s boundaries for innovative ideas. 

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