Page 258 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Appendix B 243

aration in the first place. Hans Brechbühl of the Tuck School of
Business noted in 2006 that typical problems for new business
concepts include different performance metrics, different cost
structures, and cannibalization of existing products, which
presents problems when the new concept is sold through exist-
ing sales forces. The IBM PC group, for instance, broke a sacro-
sanct IBM tradition by selling through retailers rather than
exclusively through IBM’s vaunted sales organization. Saturn
eschewed GM’s product development processes and, most vis-
ibly to the public, its dealership sales practices.
To this day, a great deal of research suggests that using a sep-
arate organization is typically the most effective way for a large
company to develop innovations and bring them to market in
situations where the capabilities necessary for the innovation
to succeed are significantly different from the company’s capa-
bilities, its dominant processes, or its core values. When a des-
ignated group is assigned this task on an ongoing basis,
however, the separation can make it difficult for the company
to recognize and exploit the opportunities. Xerox’s failure to
capitalize on numerous revolutionary innovations from its Palo
Alto Research Center is one of the most poignant examples.
PARC invented or incubated laser printing, Ethernet, the mod-
ern personal computer graphical user interface of windows
and icons, and the modern computer text editor, among many
other things. Other companies, most famously 3Com and
Apple Computer, garnered the lion’s share of profit from suc-
cessfully commercializing these inventions. But Xerox was cer-
tainly not the only company to underestimate the value of
emerging computation technologies. Hewlett-Packard lost the
first-mover advantage in this space as well. Steven Wozniak
presented his idea for a microcomputer to his Hewlett-Packard
bosses in 1975, but they declined to do anything with it, so he
left and started Apple with Steven Jobs.