INNOVATION FRAMEWORK
Building
Sustainable
Growth
A strategic approach to innovation that balances efficiency, sustainability, and transformative growth for long-term competitive advantage.
Of executives say innovation is a top three priority at their companies.
Report that their companies are ready to innovate at scale.
Closing the Innovation Gap
Most organizations aspire to innovate, but few have the systems, culture, and portfolio management needed to succeed consistently.
Three Types of Innovation
Understanding the distinction between efficiency, sustaining, and transformative innovation is critical for portfolio balance and long-term success.
Efficiency
Short-term optimization
Streamlines operations and reduces costs without changing the business model. Improves what you already do.
Examples
Process improvements, automation, marketing optimization
Sustaining
Mid-term growth
Enhances existing offerings for current customers. New products, features, or markets that build on core strengths.
Examples
Product updates, geographic expansion, channel growth
Transformative
Long-term breakthrough
Creates entirely new business models and markets. Radical opportunities that drive substantial growth and competitive advantage.
Examples
New business models, market creation, disruptive technology
Key Insight
A healthy innovation portfolio balances all three types: efficiency for today, sustaining for tomorrow, and transformative for the future.
Three Pillars of Innovation
Success requires three interconnected elements working together: a balanced portfolio, effective programs, and an innovation-ready culture.
Portfolio
A diversified mix of innovation projects systematically managed to balance risk and reward across efficiency, sustaining, and transformative initiatives.
Programs
Strategically integrated activities and investments optimized to collaborate across the organization and produce measurable results.
Culture
An environment that encourages experimentation, tolerates failure, and empowers teams to take calculated risks in pursuit of growth.
These three pillars must work in harmony. A great portfolio without the right culture fails. Strong culture without strategic programs lacks direction. Programs without portfolio discipline waste resources.
Portfolio Balance Matters
Strong portfolios allocate resources across all three innovation types to balance short-term performance with long-term growth.
Weak Portfolio
Over-focused on short-term efficiency with minimal investment in future growth
Strong Portfolio
Balanced allocation that maintains today's business while investing in tomorrow's growth
Explore vs Exploit
Successful organizations balance exploiting current capabilities with exploring new opportunities.
Exploit
Maximizing returns from existing business models, markets, and capabilities. Improving efficiency and sustaining current advantages.
- →Optimize core operations
- →Enhance existing products
- →Serve current customers better
- →Lower risk, predictable returns
Explore
Discovering new business models, markets, and capabilities. Experimenting with radical ideas and building future competitive advantages.
- →Discover new opportunities
- →Test new business models
- →Reach new customer segments
- →Higher risk, breakthrough potential
The most resilient organizations maintain a dynamic balance—exploiting today's opportunities while exploring tomorrow's possibilities.
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