Large companies response to innovation

In the followup to the "Ten lies" blog by Guy Kawasaki, I found the following comment by Tim Almond:

"Large companies are often too slow to respond, too arrogant of their size, or miss threats before they are already upon them. They are often trying to hold back the tide, instead of going with the flow, and accepting that change has occurred."

That may be true of many, but not, IMO, of the most succesful large companies. When I interacted with IBM in the 70s, it did indeed strike me that, despite their claims, and despite their large investment in research, they rarely brought totally new ideas to market. Why should they? Their profits were maximised by amortizing their design and educational costs over as long a production run as possible. However, they were rarely caught out for long by a competitor's innovation, and I realised that they were usually able to respond to one that they regarded as a serious threat by producing their own version of it. It was typically announced as a great new idea sourced entirely within the company, and rarely called by the name introduced by the actual innovator, whose existence was never acknowledged. The first example of this behaviour that I noticed was "virtual memory", described as an important feature of the 370 series when it was launched in 1971. The presenters treated it as a new idea, even though IBM had first tried it on the 360/65 some five years earlier, but I was familiar with the concept from its use on the Ferranti Atlas of c.1960, where it was called "paging".

Innovators should beware of under-rating the flexibility of a large rival. They can often start later and overtake.