Not Invented Here Syndrome

Not Invented Here (NIH) is a term widely used in the software industry to refer to the tendency of avoiding using or buying already existing products, research, standards, or knowledge because of their external origins and costs, such as royalties. It is however a stance adopted much more widely, willingly or otherwise, by many corporations or institutions.

The reasons for not wanting to use the work of others are varied, but some can include a desire to support an internal organization instead of paying royalties to a license-holder, fear of patent infringement, lack of understanding of the work done by others. However, it is most often an unwillingness to acknowledge or value the work of others due to the inward looking culture. This corporate culture can manifest as an unwillingness to adopt different ideas or products because they originate from another organization or different companies, resulting in missed market opportunities or even devastating failures in today’s fast moving economy.

There are many reasons for learning organizations to overcome the NIH culture for competing or even surviving in today’s global economy.

First of all, not all learning comes from reflection and self-analysis. The most powerful insights often come from looking outside one’s immediate environment to gain a new perspective. Enlightened managers know that even companies in completely different businesses can be fertile sources of ideas and catalysts for creative thinking. The greatest benefits often come from studying practices of other organizations, the way that work gets done, rather than just the results.

Secondly, internal R&D can not possibly invented everything any more regardless how much resources available. For most organizations, it is not only too costly to justify, but also too slow to react to the customer and market dynamics.

In addition, there is a quick realization that data created and maintained from outside of the company is becoming increasingly more important than what you can possibly acquired internally. With the increased emphasis on data analytics, this will become increasingly important for companies to have more outwards looking mindset.

Finally, whatever the source of outside ideas, learning will only occur in a receptive environment and business culture. This is the most difficult challenge for most organizations, but is essential for success. Companies that approach customers assuming that “we must be right, they have to be wrong” or observe other organizations with the mindset that “they can’t possibly teach us anything” seldom learn very much. Organization has to recognize and acknowledge the existence of NIH biases and provide explicit incentives for overcoming NIH to become successful learning organization.