THE NOT-INVENTED-HERE (NIH) SYNDROME
One of the most dangerous flaws is a form of technical arrogance in which a company feels compelled to reengineer every part of a hardware or software system because it believes that it can do a better job than any of its potential suppliers. For a new venture, inventing every possible component in order to make an ultimate product (instead of buying everything possible in order to get to market rapidly with a good product at the lowest development cost) is often fatal.
The other effect of the NIH syndrome is the incompatible-product flaw (page 190). A company designs a new interface such as a programming language or a feature for an existing language, when an old one would have been just fine. In this case, NIH hurts the buyer, who has to change and adapt to something different. Needless innovations and changes that have the effect of rendering hardware, programs, and data incompatible are extremely costly for the whole computing enterprise.
The NIH syndrome is endemic among most engineers, especially in the United States, the United Kingdom, and France. NIH does not necessarily have anything to do with a team's competence, only its lack of business savvy, although the brightest teams are often the most unhappy about using less-than-perfect components. The NIH syndrome's effects on productivity and on profit and loss are devastating, and this syndrome may account for why Japanese engineers are at least twice as productive as American engineers in a field such as automotive engineering. NIH often triggers the formation of multiple companies in one, a type of business plan flaw that is described on page 50.
Even well-established and w ell-respected firms have exhibited this flaw. In the early 1960s, IBM found that every computer products group was building a computer based on each group's own logic circuits, requiring redundancy in design, manufacturing, and field spares. Gene Amdahl proposed that any group using components from another group be rewarded and given special recognition. One of his coworkers squelched the idea, claiming that "it's un-American."
THE MISSING COMPONENT
Every day that an organization depends on a risky part or a marginal vendor, it risks its life, because if a critical component (or process) fails to materialize as scheduled, the company may run out of time and, hence, out of money. Selecting poor vendors is a common and hard-to-avoid error. Only through experience will a start-up learn which firms can be trusted to meet their commitments.
Henry Burkhardt, CEO of Kendall Square Research, described the problems of selecting the right vendor by offering what might be called a "tale of three cities." In it,