Not Invented Here

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In my No Jitter series that started with, Cloud Makes Strange Bedfellows and continued through the recent podcast Cloud Mechanics, we've had an ongoing discussion about how the cloud is making possible vast new entrepreneurial opportunities.

We've talked about how the technical barriers to extracurricular innovation have fallen and incentives have risen. We've heard from Avaya and Cisco on how each are examples of large organizations benefitting. We talked with Dr. Fred Logue, an expert in intellectual property law, and learned from him how cloud is changing strategies and patents.

There are lots of reason why companies large and small are taking advantage of the cloud to create new innovation in new ways. There's certainly a lot of positive momentum, but what about other factors to success? We must also recognize the challenges.

Often great promise can be undermined by factors that defy logical inspection. In the title of this post I give away what I argue is one of the most prevalent reasons why organizations fail to embrace transformative advancement. It is the "not invented here" dynamic.

"Not invented here" is not just symptomatic of cloud. I argue, though, that it becomes a critical issue to overcome because of the pace of cloud-based innovation. As this dynamic accelerates, so too does the risk to companies who cannot get out of their own way.

The words "not invented here," when uttered, sound more cynical than the concept actually plays out within large organizations. If only it were only singular egos to overcome.

On the contrary beyond what might be the internal dialogue of a few individuals, "not invented here" is engrained into organizational design. It is the result of the processes that play in organizations as they bring ideas to the market. As discussed in, Monetizing Intellectual Property, The Cloud Way, organizations can be teaming with ideas. However, faced with finite resources tough decision must be made.

To make these decisions, processes are developed to produce from the organization's demand chain those ideas that will result in the best chances for marketplace success. Like panning for gold, the goal as an organization is to sift through all of the available possibilities and invest the organization's resources in those ideas that hold the greatest probability of success.

One associated goal is bringing products to market through the most efficient allocation of the organization's scarce resources. As we have discussed in Monetizing Intellectual Property, some resources must always be wasted. We said, "Expenditures for prototyping, product testing, marketplace analysis and other significant costs are expended before ideas with lower potential are culled from the idea herd." The hope is that the processes surrounding the actualization of a product minimize that waste.

A side effect of these organizational processes becomes the memorialization of ideas. As the organization's demand chain churns and ideas deemed worthy of investment gain momentum, competing ideas fall by the wayside. The further down the road the process rolls, the more deeply invested the organization becomes in the chosen path.

As more of the organization's resources are contributed, the greater the reinforcement of the company's commitment to those ideas. The result is an institutionalization of the "not invented here" mentality.

It's not that there aren't checks and balances -- there certainly are. There are typically plenty of opportunities to say, "Time out," and perhaps rejuvenate a parked idea. It's just that the longer the process rolls, the more difficult it becomes to turn back.

Those of us old enough to remember the Challenger disaster can look back now and say to ourselves, "What was NASA thinking?" There were icicles in Florida. An enormously complicated machine loaded with hundreds of tons of high explosives stood encased in ice. Success depended upon parts engineered to work optimally in sub tropic temperatures. What would have been lost if NASA waited just a couple of days for the weather to warm up? Institutional momentum, unfortunately, pushed forward to what in hindsight was an avoidable tragedy.

So it is true in all organizations. Culture, politics, organizational design and numerous other factors add up to an organization compulsion to persist. On the personal level, if you are the proponent of an idea and you are the winner of the internal matches competing for resources in the drive towards the marketplace, you are going to be very resistant to efforts to get you to give up your hard fought wins. The more people you attract to your team, the greater the emphasis.

As you pass various gates of institutional commitment you develop increasing inertia. An institutional version of Newton's first law takes effect. The longer the processes play out, the more and more of the organization becomes invested in you. Your competitors move on to fight the battle for the next big thing.

Those are internal forces. Now getting back to our primary discussion points, consider the external innovator who seeks opportunity by exercising another organization's intellectual property to create something new. Not only does the external innovator need to overcome the barriers to innovation we've talked about in previous discussions including the significant resources required to, "access, interpret and utilize the exposed resources," they also face the institutional "not invented here." These external innovators face organizational impediments against partnering that are engrained in the fabric of the intellectual property owners' organizations.

For the intellectual property owners and for the cloud to fulfill the promise of creating an environment of unleashed innovative energies beyond their walls, three things must happen:

In the world where the cloud reigns, the new ways of innovation will become the primary prerogative. As we discussed in "Monetizing Intellectual Property, The Cloud Way," even in the largest of organizations resources are finite. On the other hand, cloud adept innovators will face far less constraint. The cloud makes it possible to transcend previous inhibitions to innovation.

Intellectual property exposed well will attract the benefit of almost unlimited capacity for innovation.

I hope you'll join in on the conversation by sharing your thoughts in the comments below. And if you've missed them, catch up on previous episodes of this series including: