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Opening the Black Box of 'Not Invented Here' - Attitudes, decision biases and behavioural consequences

date Dec 10, 2020
authors David Antons, Frank Piller
reading time 6 mins
category research paper

NIH syndrome defintion

The not-invented-here syndrome (NIH) describes a negative attitude toward knowledge (ideas, technologies) derived from an external source.

2 key features

NIH has two key features. First, it emerges as a result of boundaries that knowledge has to bridge when it is transferred between two entities. It therefore derives from some form of knowledge externality. Second, it involves an irrational devaluation or even rejection of this external knowledge by an individual, even though this knowledge might be valuable from the perspective of the organization.

2 ways of defining externality

externality can be conceptualized in two different ways: externality with regard to the (disciplinary) context of the knowledge, and externality with regard to the source from which the knowledge originates.

Definition of attitudes

Attitudes are defined as relatively time-consistent individual evaluations of an object of thought, including phys- ical artifacts, people, groups, and ideas.


Why is absorbing knowledge from outside is necessary

To become better at exploration, studies unanimously emphasize the need for an organization to successfully transfer and absorb outside knowledge as a potent driver of innovative output, firm performance, and economic welfare.

What does external source of knowledge mean?

There are ample examples of contexts in which knowledge is perceived as external, including a developer talking to a team member who has a different disciplinary background, a colleague from a neighboring department suggesting an idea, an external technology provider offering a technical solution, or a customer from a different cultural tradition.

Knowledge transfer

Following Shannon and Weaver’s (1964) basic model, knowledge is transmitted from a source to a recipient (individuals, teams, or organizations)

Pros and cons of knowledge categories

Disciplinary division helps to organize knowledge and leads to specialization, but also results in disconnected knowledge silos. To address complex problems, however, research often needs to integrate knowledge from different domains within interdisciplinary projects



A striking instance of this kind of resistance was evidenced at Kodak over the past two decades, when the company’s refusal to address the rise of digital over film technology led to its decline and eventual bankruptcy… Employees knowledgeable about digital photography tended to be new employees hired to create change, but traditional managers were not quick to respond to the input and suggestions offered by their new colleagues.

Apple mouse

For example, long after market feedback and usability research indicated that the optimum number of buttons for a computer mouse was two, Apple refused to modify its thinking and maintained its one-button mouse design (Lidwell, Holden, & Butler, 2010).

Electrical engineer vs mechanical engineer

A lead engineer with a background in electrical engineering may reject a contribution based on knowledge stemming from mechanical engineering.

German engineering

This pattern has, for example, recently been shown in German companies where a strong “German engineering pride” prevents the absorption of relevant external solutions in an R&D context

Product managers

In organizations, product managers and developers tend to rely on their initial positive assessment of the market potential for a novel product, even when contrary information later becomes available


“R&D says: ‘Why should we find an external solution when we can do it ourselves? If we do this, we’re really only showing how bad we are.’”

Reasons for rejection of knowledge

When is rejecting ideas rational?

Rejecting external ideas or technologies when their expected value is outweighed by costs—for example, by transaction costs incurred when acquiring the knowledge but also by the cost of the knowledge stock itself (e.g., licensing fees)—is fully rational.

Knowing the difference in rejections

In this context, we have to distinguish between an irrational, but conscious and deliberate, rejection and a reflexive, unconscious rejection of external knowledge.

Ownership of knowledge

Concerning knowledge transfer, Baer and Brown (2012) have shown that perceiving psychological ownership of ideas leads to the rejection of suggestions by others in this area. Along with psychological ownership, ego defense might also link with the self-serving bias (Kelley, 1967). Research has broadly discussed an individual’s tendency to overestimate his or her own contributions and attribute failure to external factors that influence decisions or tasks

Cons of an expert track

Expert tracks, the notion of “innovation champions,” or an award culture recognizing expert achievements (such as Procter & Gamble’s famed Victor Mills Society) foster the construction of pockets of expertise held by one individual.

When does it lead to a strong rejection?

Thus, drawing self-esteem from following a specific ideology or value and having related attitudes is expected to lead to a strong rejection of other ideologies, schools of thought, or values as embodied in external knowledge inputs.

Cognitive consistency

Striving for cognitive consistency, people filter out new information that challenges their attitudes and adopt information that is in line with their attitudes. This attitude-induced selective information processing affects attention, encoding, exposure, judgment, elaboration, and information storage.

Why create from scratch?

Besides monetary rewards, creating one’s own ideas may also simply be more prestigious than adapting an external idea, as it fosters intrinsic motivation via peer recognition or social status in an organization. Hence, the utilitarian function of an attitude can lead to an ownership bias or endowment effect in idea generation and evaluation, where employees are more likely to promote their own ideas over external ideas.

Solutions for NIH

A formal procedure

These open innovation initiatives were all sponsored by the chief technology officers of the respective organizations, providing a situation in which the firm had established a formal procedure to acquire external knowledge for a given innovation problem.

Other remedies

The literature has proposed various remedies, such as rotating team members on a project basis, integrating employees into decision making, restructuring teams and departments, gaining experience with external knowledge, and establishing adequate incentive systems.

Encouraging external interactions

Moreover, encouraging decision makers to interact with a wider community of external actors on conferences or in cross-industry work groups may prevent a negative attitude toward external knowledge.

Take another viewpoint

To overcome this rejection, the project leader could ask the developers to take a marketing perspective and try to understand why the team proposed these ideas.

Bottom up vs top down

Bottom-up emergence resides in lower-level entities such as the individual, and individual effects and habits rise to upper levels. Over time, these emergent phenomena then manifest themselves at higher and more collective levels—for instance, in the form of a specific organizational culture. Top-down effects include higher-level phenomena that shape, affect, or constrain lower-level phenomena. These effects include creating an open-minded corporate culture, implementing incentive systems, and trying out different methods of personal leadership.