Managing Innovation profitably- Xerox PARC?

Case in point- Innovation without Profit –XEROX PARC –Managing Innovation
PARC was established in 1970 as the research division of Xerox Corp. Its goal - to invent the technology of the future. Till it was incorporated as a Xerox subsidiary in 2002, it spanned over 30 years.

Notwithstanding its technical excellence, Xerox PARC failed to take competitive advantage with its innovations. PARC innovated on a number of products which transformed the computer industry like the PC prototype, LAN, GUI interface, mouse, page description languages, laser printers, etc. There was much commercial potential in most of its innovations. Reasons attributed for failure to capitalize on its innovations were the relaxed and flexible culture that prevailed at its Palo Alto Research Centre. Though flexibility is good, it made its employees to practice ventures of their interest with no alarm for commercial importance. Another reason attributed was the distance between PARC and its corporate headquarters. This remoteness cut it off from the competition of the corporate world. Another theory of thought was that there was a basic disparity between the goals and functioning methods of PARC researchers and the employees at the corporate/ management office.

By the beginning of the 21st century, PARC was spun-off as an autonomous subsidiary of Xerox. Xerox had also set up some subsidiaries to help commercialize the inventions that came out of PARC.

Point to note: Paradoxical structure and culture elements involved are essential to manage innovation profitably. Every organization needs to promote original thinking to foster innovative ideas and products, coupled with ensuring control to commercialize the ideas and products effectively.