The landscape in 2026 reveals an innovation function under siege, after another cycle of enthusiasm, erosion and elimination.
Innovation units face relevance measured by growth delivery, not activity metrics. The pattern repeats across industries, in companies of all shapes and sizes.
Zombie initiatives drain budgets. Standalone innovation teams that test ideas and hand them over to core business watch those handovers fail. Corporate antibodies reject anything that looks different. Talent burns out from exhaustion and mourning killed projects, then leaves the company.
Yet beneath this crisis lies opportunity. The skills innovation teams possess—managing uncertainty, testing assumptions, portfolio thinking—are precisely what leaders desperately need but cannot articulate.
Understanding how to succeed despite the challenges determines whether innovation functions survive or disappear. The path forward requires honest assessment of current realities, brutal clarity about what must change, and practical frameworks for rebuilding innovation as a strategic capability rather than a discretionary expense.
The change begins with acknowledging that the innovation playbooks designed in the 1990s no longer work in a world where companies reinvent every twelve months or less.
Companies face continuous flux rather than occasional disruption. This flux causes a family of systemic, interdependent disruptions that traditional innovation frameworks cannot handle.
Innovation functions fail at three critical points: legitimacy with leadership, resource allocation across horizons, and integration with finance. Without legitimacy, innovation teams operate in permanent vulnerability. Without proper resource allocation, experimental work gets strangled by the gravitational pull of the core business. Without financial integration, innovation remains a cost center rather than a strategic partner.
Nadya Zhexembayeva emphasizes that "the driving force for reinvention is legitimacy. Innovation leaders must earn the right to steer the organization's future through trust and results."
Brett Macfarlane adds that legitimacy requires balancing technical processes with social processes. Leaders need psychodynamic support, which involves role switching—developing the ability to change "hats" or archetypes in the moment. Brett advises deploying customer empathy techniques to colleagues: "Meet them where they are. Use emotional capital, motivational interviewing, and fair process techniques to diagnose what's happening behind the scenes."
After years of effort, horizons-based thinking is now implemented in all executive objective settings across the company. Every executive at Mars, not just those in innovation, now thinks, plans and allocates resources in horizons. That has fundamentally changed the game.
Understanding that reinvention is paramount leads to an uncomfortable realization: many innovation leaders don't notice their relevance is eroding until it's too late.
Frank Mattes has been observing that the rules have changed quietly, with innovation units now facing relevance measured by growth delivery, not activity metrics. Growth, therefore, will be the keyword for all innovation teams moving forward.
Frank notes that "money is not cheap anymore”. With institutional investors earning four to five percent returns on secure government bonds, the tolerance for experimentation has evaporated. "CXOs want predictable growth to be delivered by the heads of the business units" without the "overhead" of detached innovation units.
Frank identifies four early warning signals that relevance is fading: late involvement (being looped in after decisions are made), low pull (creating work proactively rather than responding to genuine demand), silenced reporting (outcomes no longer reported upstairs), and negotiable budgets (the innovation unit is no longer missed when absent). "Many peers do not notice that the shift is happening because their calendars are full. They actually increase activity, and they're still visible on the org chart, but the ground under them is shifting."
Recognizing the relevance crisis forces a return to main practical frameworks, helping us understand the core distinction between running the business and building the future.
Many organizations struggle with the tension between delivering immediate results and building the future. This challenge intensifies when innovation moves into decentralized business units.
Alex Osterwalder, CEO of Strategyzer, argues this reflects a fundamental misunderstanding of how to manage uncertainty. The solution requires evidence-based resource allocation, based on a rigorous distinction between "exploit" and "explore”.
Central leadership plays a critical role—not in picking ideas, but in creating the conditions for learning:
Clear processes
Explicit decision rules
And, crucially, a fast, evidence-based way to kill (or “retire”) ideas
The explore versus exploit framework becomes even clearer when you understand what innovation teams are actually optimized to produce: knowledge, not wealth.
Elliott Parker notes that innovation teams help corporations endure by gathering knowledge, not by creating wealth.
The operating business generates wealth through capital-efficient operations. While it is very good at gathering knowledge about the world as it exists right now, it is not as good at gathering knowledge about the future. This fundamental separation—core business optimized for wealth, innovation teams optimized for knowledge—requires completely different metrics, incentives, and leadership expectations.
Elliott proposes a specific metric: "The very best metric for an innovation team is the extent to which external corporations and venture capitalists are clamoring to invest in the things you're building." This connects to Peter Thiel's concept of "secrets"—every good startup has uncovered a secret about the future. "If external investors—who are purely profit-motivated—want to put their capital into what your team has built, it validates that you have discovered a secret."
He demonstrates ongoing evolution using the Amazon forest metaphor. The Amazon is extraordinarily resilient because it innovates through mutation at the level of cells and organisms. Innovation teams should take from the Amazon forest example. The goal for the innovation team is to run as many experiments as possible at the lowest possible cost per experiment. Experiment at the margins. Don't centralize.
The distinction between how the core business and innovation teams view mistakes is outlined through two contrasting theories: the magnitude of correctness versus the frequency of correctness. In traditional operational systems, executives learn never to be wrong—they are promoted based on frequency of correctness. Innovation teams operate differently. They should have permission to be wrong a lot, as long as when they are right, the outcomes are spectacular.
Being wrong a lot helps create futureproof data, which in return provides innovation teams with the knowledge they need. There is no data about the future. The only data that we can find about the future is the data that we create. Action creates data about the future.
Understanding the wealth versus knowledge distinction reveals why innovation teams need fundamentally different governance, starting with formal authority that removes internal ambiguity before tackling external uncertainty.
For Stephen Parkins it’s clear. You can't innovate without a formal mandate—a contract between senior management and innovation professionals that delegates authority to pursue innovation within defined parameters.
Stephen identifies two root problems for lack of innovation impact: ambiguity and asymmetry. Ambiguity refers to things inside the company that are not clear, not explicit, or left to chance. Asymmetry represents the disconnect between expectations and reality.
The solution draws inspiration from derivatives trading, where traders operate under explicit trading mandates. Implementing a mandate addresses the three most common ailments in corporate innovation: misalignment, funding instability, and cultural resistance.
Often, systemic issues go deeper, requiring fundamental changes to decision structures, talent practices, and organizational design.
Businesses are designed to be very good at operations, driving efficiency and maximizing return on capital. The systemic issues emerge when leadership transfers that same mindset to transformation and adjacent markets. In these spaces, you don't know what you don't know, argues Daniel Benitez.
Christoph Raethke extends this by identifying a structural void—the lack of entrepreneurship practice in corporate innovation. At Chemovator (BASF's venture building unit), important decisions were made by a "council of entrepreneurs" who were still active in the market—not consultants or retired executives. This setup allowed for true access, ruthless prioritization, and external investment.
Yet even with the right governance model, a structural barrier remains. Peter Roeber highlights the critical gap: Corporate ventures require dedicated C-suite mindspace and partnership to succeed. Leadership teams primarily focused on core business lack the depth of understanding required to make confident and timely decisions on when ventures need investment. This results in "waiting for clarity”, without creating it.
Peter's solution lies in Acceptance and Adaptation. Accept that this paradox is "the natural result of the current system." Instead of trying to transform everything, use "small nudges." Peter created a lightweight leadership governance structure that included external experts to fill experience gaps.
Fixing systemic issues requires leadership that can navigate both the technical mechanics of innovation and the deeply human dynamics of organizational change.
Jayshree Seth introduces the "Chief Lens Officer" framework, emphasizing that innovation leaders must track how context shapes value, not just generate ideas. She introduces five lenses innovation leaders need: the telescope and microscope (traditional direction and detail), the periscope (seeing around corners), the stethoscope (leading with heart), and the horoscope (vulnerability).
Jayshree also identifies four critical communication sequences essential for gaining leadership support: acceptance before excitement (acknowledge challenges before asking for enthusiasm), acknowledgement before appreciation (identify specific sacrifices before offering generic gratitude), assurance before reassurance (provide concrete plans before empty comfort), and alignment before accountability (when done right, accountability becomes a natural byproduct of true alignment).
She also introduces the WWW framework: “Why this? Why now? What's in it for me?” The answer must speak to stakeholders' specific needs, not leadership priorities. She emphasizes shifting from "puzzle" thinking to "mosaic" thinking. "You have to make them think of a mosaic instead of a puzzle”. A mosaic is composed of tiles of information—organic, allowing a picture to emerge.
Maintaining support requires converting static endorsement into active momentum through visible results and growing engagement.
Tendayi Viki's framework strips momentum to its physics: momentum equals mass x velocity (p=mv). Velocity represents consistent actions and mass represents weight behind initiatives, drawing a critical comparison: "a big truck moving slowly is an innovation program with CEO endorsement but middle management resistance" while "a small car moving fast is a person working with early adopters and producing visible results."
The momentum flywheel creates its own energy through a self-reinforcing cycle: Consistent Action → Visible Results → Growing Engagement → More Capacity → Bigger Results. If you start having visible impact on the company with small, consistent actions, you get more and more people to join the movement. And that unlocks the capacity to work on cooler, more interesting things.
This requires identifying the path of least resistance. You cannot move heavy objects with sheer willpower. Your leverage point is early adopters.
Tendayi also introduces "idiosyncrasy credits"—a psychological currency that grants permission to deviate from group norms. You accumulate idiosyncrasy credits the more things you do that are in support of the group.
His stakeholder matrix maps people on two dimensions: positive evaluation and active participation, creating four personas: Opponents, Prisoners, Supporters (endorse but won't help—the danger zone), and Champions (buy in and actively contribute). Tendayi emphasizes: "Lead with narrative, not facts or data. Facts or data don't win. The person with the best story wins."
Building momentum requires clarity about what type of innovation team the organization actually needs. Even if you don’t lead the function yourself, there is a lot you can do within your team.
Susie Braam applies the Jobs to Be Done theory to organizational design, revealing that teams serve three distinct types of jobs: functional (practical outcomes like sharing data), emotional (how leadership needs to feel—confident, safe, relevant), and social (how the organization wants to be perceived by investors or the public).
Innovation teams typically serve one of three primary functions based on organizational maturity. Builders create new ventures, products, or business models when the organization needs tangible output. Enablers develop capabilities, frameworks, and skills when the organization needs infrastructure. Architects design systems and governance when the organization needs strategic direction.
Susie's own experience demonstrates an evolution. She inherited a team of builders but diagnosed that organizational maturity was low. She made a deliberate strategic pivot, shifting the team's primary function from building to enabling. She created a brand new role: head of profession for entrepreneurship, developing skills frameworks and training programs. Eighteen months later, as maturity rose, the team evolved again. "You must constantly assess: What is the primary function of my team today? Is that the right focus given our current maturity? And do we have the right skills to execute that specific function?"
On this, Susie introduces the Innovation Orientation Matrix based on two factors: Organizational Readiness and Focus of Change. "You need to meet the organization where it is, not where you want it to be."
Finally, sustaining innovation work over time requires remembering why this struggle matters—and recognizing the patterns that history reveals about navigating uncertainty.
History teaches us that we've been disrupting—just not this fast, argues Scott D. Anthony. In 1620, Sir Francis Bacon identified three things that changed the state and appearance of the entire world: the printing press, the compass, and gunpowder. These three shifts stretched across 2,000 years. Today, we face many simultaneous shifts. Scott uses the metaphor of "the fog" to describe this environment. In a world that is facing persistent, disruptive change, the right answers aren't clear. The data are unclear. By the time it becomes clear, it's too late to do anything about it.
Constantinople in 1453 had been safe for 1,000 years, protected by the Theodosian walls that had never fallen. But gunpowder changed everything. By 1452, a figure named Orban offered to cast a cannon for the Byzantines, but they passed. He brought that technology to the Ottoman Empire. The city fell in 50 days. Scott asks: "What are the defenses you have now that you built for yesterday that are powerless in the face of disruptions of today?"
Yet he also dismantles the myth that innovation requires superheroes. Florence Nightingale succeeded as the "triple disruptor" in healthcare through four learnable behaviors: curiosity (understand root causes using data), customer obsession (focus entirely on the patient), collaboration (work with statisticians and government), and persistence through ambiguity (handle setbacks and keep pushing).
In hindsight, disruption rewards patience, often over very long periods of time. Scott demonstrates this through the iPhone's origin story. The story begins in 1952 with Don Stuckey at Corning who made a mistake creating material 14 times stronger than glass. Corning tried to find a market for "Project Chemcor" for two decades, shelved it in 1971, and it wasn't until 2007 when Steve Jobs demanded a glass screen that this became Gorilla Glass.
The above insights deconstruct the reality of gaining and keeping leadership support in 2026. The path requires five foundational elements working in harmony:
acknowledging that traditional playbooks no longer work in a world of continuous flux, where companies must reinvent every twelve months or less, and being brutal honesty about relevance;
recognizing the four warning signals before budgets evaporate and influence disappears;
distinguishing between explore and exploit work with fundamentally different metrics where innovation teams optimize for knowledge gathering while core business optimizes for wealth generation;
establishing formal mandates and fixing systemic issues through clear delegation of authority, proper governance, and entrepreneurial talent with skin in the game;
building momentum through the right leadership, the right team orientation, and visible results that convert skeptics into champions.
Innovation leaders that master these elements position their functions as indispensable partners in navigating unknown futures — strategic capabilities that reduce the very uncertainty threatening the core business.
The warnings are in place both for leaders and innovation teams. The walls we built for yesterday won't protect us from the disruptions of today. History shows us that disruption rewards patience, persistence, and the courage to make the right bets even when the fog makes clarity impossible.
What Corporate Innovation Teams Need to Do to Succeed in 2026
Advice from Expert members of the Community
Frank Mattes, Founder at Lean Scaleup
Most innovation teams are working harder than ever. What has changed, often unnoticed, is how relevance is decided.
Today, the value of innovation units is increasingly evaluated not during innovation portfolio reviews or demo days, but in business conversations about growth, short-term results, and predictability.
This shift is pressure-driven, since business units are under pressure to deliver near-term results. That changes the role that innovation is expected to play.
What the companies actually need is growth. However, growth initiatives fail because uncertainty is ignored. This is where corporate innovation matters; it serves as the function that helps the business deal with uncertainty early on. They can bridge isolation and re-connect with the business, albeit in a new role.
Even if this identity shift isn’t easy, it’s clarifying, since relevance stops being abstract and becomes concrete. As we look ahead to 2026, the question isn't whether innovation still matters. The real question is whether your business units would notice if you weren't there.
Sandra Nešić, External Advisor and Senior Innovation Consultant at ICT Hub
Exploring the unknown while operating inside organizations optimized for control continues to be expected from corporate innovation teams. In a BANI world, this tension is no longer manageable through separation. It has to be actively designed for.
In a traditional context, innovation reduces uncertainty before handing outcomes over to strategy and operations. In a BANI context, this model breaks down: innovation no longer hands over into certainty, but into a different, uncertain system. This is why reconnecting innovation strategy and innovation operations becomes critical in 2026.
While the advent of AI, automation, and low-code tools has reduced the cost and time needed for experimentation, it has also introduced a new risk: speed without coherence. In this context, speed itself becomes a liability if it is not aligned with strategy and operational capacity. Innovation teams must therefore shift their focus from producing more experiments to enabling better decisions.
Overall, corporate innovation teams in 2026 must pace innovation deliberately, reconnect strategy and operations, and design governance that supports learning rather than control.
Dennis Böcker, Innovation Management Consultant
Sustainable success in 2026 requires organizations to move beyond disconnected programs toward a systemic, integrated approach—what the ISO 56000 family calls an Innovation Management System.
Moreover, corporate innovation teams must recognize that success lies in establishing the right management system. This means connecting strategy, portfolio, governance, processes, resources, and culture into a coherent whole.
The path forward requires clear governance structures, integrated processes that guide initiatives from discovery through validation to scaling and the development of a systematic portfolio management that balances, besides other aspects, efficiency, sustaining, and transformational innovation.
Standardized approaches that can be repeated, measured, and improved will also define successful organizations in 2026, replacing creative ideas as a key to victory.
Finally, the competitive advantage goes to organizations that recognize innovation management as a professional discipline requiring systematic approaches, not ad-hoc activities. Those who build robust Innovation Management Systems will thrive.
Gina Colarelli O'Connor, Professor of Innovation Management at Babson College
Each year, there are familiar pressures within innovation teams. These are: the difficulty to prove investment worth, the pressure to innovate close to core business and, more generally, an existential threat.
In 2026, two new pressures amplify these challenges: AI Adoption to improve current business practices and geopolitical volatility. Based on our research and experience, the below actions stand out for survival:
Initially, review your team’s mandate. Make sure that any new purpose is not duplicating other teams' efforts and that you're equipped to handle the new purpose. Mandates will creep toward incremental innovation in 2026, calling for tighter timelines and faster ROI. If you find that expectations are moving you in either of these directions, call it out to your leaders. They can help clarify your group's unique contribution to the company's innovation ambitions.
Additionally, if your mandate has evolved, so should your metrics. Metrics for activities in the realm of higher uncertainty differ dramatically from traditional new product development metrics. You should also track progress against your metrics. Assign responsibility for tracking progress against your stated OKRs (Objectives and Key Results). In the case of Strategic Innovation, metrics can come in the form of storytelling/cases/milestone accomplishments.
Dagmar Boettger, Team Performance Coach and Leadership Coach for Innovators at Ignition Global
2026 is a stress test. Innovation teams are no longer protected by long-term narratives, but are judged on near-term contribution. The mandate is clear: make innovation visible, relevant, and value-adding under pressure through distinct approaches.
Adopting a teamwork KPI in 2026 is the first approach. Among others, make learning and progress visible, not just outcomes. If confidence erodes in your teams, innovation output collapses before budgets do. So, monitor team confidence.
When it comes to automation, start with processes that affect customers or margins, design automation initiatives as test–learn–iterate loops and track impact in business metrics. Automation gives innovation teams quick wins, political capital, and time for bigger bets.
On experimentation specifically, make sure that these are tied to real operational and market conditions, keeping them small, failure-friendly and decision-focused. Exploration should be protected but strategically embedded; therefore, embed your innovation teams with commercial and operational units.
In 2026, innovation survives through contribution.
