The grass is (not) always greener on the other side: Biased assessments of external ideas in innovation

• Applicant: Professorin Dr. Christina Raasch
• Subject Area: Management and Marketing
• Term: since 2026
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 577766334

Virtually all companies draw upon ideas and solutions that come from outside their own walls. They may incorporate external knowledge on a very large scale, such as in mergers & acquisitions, or on a much smaller scale, such as in collaborations with suppliers, user innovators, or crowds. “Open innovation” encapsulates the notion that firms should leverage external as well as internal knowledge to accelerate and enhance their innovation outcomes. Selecting and implementing the best new ideas increases companies’ efficiency, competitiveness, and resilience. The many merits and successes of these approaches notwithstanding, both anecdotal and some scientific evidence suggests that the anticipated benefits of external ideas may not always materialize. Reportedly, almost half of the mergers and acquisitions fail to meet the companies’ prior expectations; and many consulting and open innovation programs stay behind their goals. First studies suggest that decision-makers may systematically overvalue external knowledge and ideas. Such a bias may divert resources to the implementation of mediocre ideas at the expense of superior ones. So far, most studies focus on the bias against external ideas, which has been conceptualized as the Not-Invented-Here (NIH) syndrome. The NIH syndrome is defined as an attitudinal bias whereby evaluators hold negative attitudes towards external ideas and unduly favor internally generated ideas. By contrast, only a few scattered papers find a bias favoring external ideas. This research project aims to broaden and balance out the scientific debate by proposing the umbrella concept of source-based biases in idea evaluation, which encompass both the well-known NIH syndrome and its opposite, which we call the Better-Found-Elsewhere (BFE) syndrome. In our view, this is an important topic as, according to our industry contacts, such biases among employees lead to defeatism (“our ideas are never good enough”, “all the best ideas come from Silicon Valley”), dependency, and wasted potential. This proposal comprises three distinct projects. In project 1, we take an inductive approach and conduct interviews with innovation decision-makers, including evaluators and their managers to examine how attitudes towards external ideas shape evaluators’ preferences. Using Grounded Theory, we intend to embed the findings in an overarching theory that explains source-based biases and their contingencies. The second project derives hypotheses from the propositions formulated in project 1 and tests them using a very big set of observational data that we collected from a large company’s idea management system. In project 3 we run a series of experiments to show how the evaluation of external ideas changes across the different stages of the innovation process. Understanding source-based biases in idea evaluation helps us make sense of patterns in the use of proximate vs. distant knowledge – a very topical area of inquiry.

• DFG Programme: Research Grants