Not-Invented-Here Syndrome

Many critical thinkers in industry consider themselves the best source of new ideas and this "aura of excellence," if not checked, can allow arrogance to lead to a not-invented-here resentment of ideas emerging from outside the organization.

When you are leading a costly research organization where blockbuster innovation matters in today's global economy, you can't afford to be blinded to new concepts from outside the walls of your enterprise.  Such is the case in the pharmaceutical industry where blockbuster products generate global sales in excess of one billion dollars a year.

As leaders embrace innovation, along with flexibility to find and apply the best minds to the research project from both the outside and inside, they begin to break down the walls of arrogance and not-invented-here mentality within the enterprise.  A more entrepreneurial culture emerges where people feel more comfortable sharing knowledge and building social capital in order to improve the productivity of the organization.

Merck & Co.'s research chief Peter Kim, who spent most of his career in academia, must have learned about Bristol-Myers Squibb's Pharmaceutical Research Institute (PRI) transforming itself to compete in the new millennium by building social capital to boost its ability to identify, develop, and commercialize blockbuster drugs.   Dr. Kim has made it clear he thinks Merck & Co.'s own labs aren't sufficient to replenish its pipeline and the company needs to turn to other companies, both for new drugs and new means of discovering them.

Merck's new strategy is common in an industry where many big companies with aging blockbusters have turned to biotech firms and smaller drug makers to refill their pipelines.

PRI's president, Dr. Peter S. Ringrose states, "We looked at changes likely to occur in the external environment that would impact the pharmaceutical industry and its ability to develop new medicines."  These changes include new technologies such as genomics and informatics, as well as societal factors such as better-informed consumers, an aging population, and the potential of more government intervention and control.  Dr. Ringrose says, "There's a clear correlation between the ability to create innovative blockbusters and the ability to grow and to move into new areas of therapeutic opportunity."

Building inter-corporate alliances happens from the top down.  Without corner office involvement, the not-invented-here syndrome's immunity to change will prevail.   "This is a high-risk business and you have to place your bets," Dr. Kim says.  "Sometimes you're going to lose."

Sources: The Wall Street Journal, June 7, 2006 and Achieving Success Through Social Capital by Wayne Baker (Jossey-Bass)