The failure of Xerox to take advantage of the innovations developed at Xerox PARC, is a legendary example of management failure. A couple of books have been written on the subject that I hope to read sometime.
(p. 194) Beyond his efforts in VLSI design, Bert Sutherland had supported the work at Xerox PARC that led to the “windows” and the “mouse” on nearly every workstation and many personal computers, from Apple and Atari to Apollo and Sun. He formed the research department that made Ethernet the dominant small computer network and that conceived the “notebook” lap computer. Xerox’s lead in IC design gave the company the tools–if the firm had only understood them–to lend new special features to every copier and printer and even to create the kind of electronic “personal copiers” later pioneered by Canon.
Bert Sutherland was the hero of Xerox PARC: that is history. But that was not life. In real life, Xerox fired him in 1979. While he worked day and night on the novel projects in Palo Alto that were to give Xerox an indelible role in the history of computer technology, jealous rivals conspired against him at headquarters. They said that his research, which would fuel the industry for a decade, was irrelevant to the needs of the company. In corning years, the research leadership that replaced him would make the company nearly irrelevant to the needs of the world.
Gilder, George. Microcosm: The Quantum Revolution in Economics and Technology. Paperback ed. New York: Touchstone, 1990.