Cognitive distance

You can simply be too close to see stuff (see the competition not grokking Canon’s innovation. That would be cognitive blindness, I suppose.

But Kasper’s very success in designing contact aligners was a major contributor to its inability to design a proximity aligner that could perform as successfully as Canon’s. Canon’s aligner was superficially very similar to Kasper’s. It incorporated the same components and performed the same functions, but it performed them much more effectively because it incorporated a much more sophisticated understanding of the technical interrelationships that are fundamental to successful proximity alignment. Kasper failed to develop the particular component knowledge that would have enabled it to match Canon’s design. More importantly, the architectural knowledge that Kasper had developed through its experience with the contact aligner had the effect of focusing its attention away from the new problems whose solution was critical to the design of a successful proximity aligner.
(Henderson and Clark, 1990: 25)

The Canon aligner was evaluated by a team at Kasper and pronounced to be a copy of a Kasper machine. Kasper evaluated it against the criteria that it used for evaluating its own aligners-criteria that had been developed during its experience with con-tact aligners. The technical features that made Canon’s aligner a significant advance, particularly the redesigned gap mechanism, were not observed because they were not considered important. The Canon aligner was pronounced to be “merely a copy” of the Kasper aligner.
(Henderson and Clark, 1990: 26)

And, for a more specific quote about cognitive distance–

“In order to deal with this question effectively, we propose to interpret resource heterogeneity in terms of the cognitive distance between the firms that hold these different resources. Here, cognition denotes a broad range of mental activity, including proprioception, perception, sense making, categorization, inference, value
judgments, emotions, and feelings, which all build on each other.
From the perspective that categories of cognition are constructed from action in the world, Nooteboom (1992, 2000) inferred that to the extent that people have developed along different life paths and in different environments, they interpret, understand and evaluate the world differently. This leads to the notion of cognitive distance between people. Next, the question is how this notion of cognitive distance applies to firms. For organizations to achieve a common purpose, people do not have to agree on personal goals, and in the cognitive division of labor in a firm they will have dissimilar knowledge. However, they need to share certain basic perceptions and values to sufficiently align their competencies and motives. This requires a certain shared ‘interpretation system’ (Weick, 1979, 1995), ‘system of shared meanings’ (Smircich, 1983) or organizational ‘focus’ (Nooteboom, 2000), established by means of shared fundamental categories of perception, interpretation and evaluation inculcated by organizational culture (Schein, 1985). Differences in such organizational focus yield cognitive distance between firms”

from  Nooteboom, B., Van Haverbeke, W.V., Guysters, G., Gilsing, V., Van de Oord, A., 2007. Optimal cognitive distance and absorptive capacity. Research Policy 36 (7), 1016–1034.