Budget cuts, executive pressure, and the rapid rise of AI have forced innovation leaders to get brutally clear about what actually drives results.
The old playbooks, originally designed for stable, long cycles, no longer work in an environment where every fifth company reinvents every 12 months or less.
Nadya Zhexembayeva, Founder at the Reinvention Academy, Rainer Struck, Global VP Innovation Transformation at Mars, and Brett Macfarlane, Leadership Advisor, address the necessity of reinventing innovation by tackling three critical failure points: legitimacy with leadership, resource allocation across horizons, and integration with finance.
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Why Reinvention is Paramount Now
Understanding the fundamental mismatch in how we work
Most corporate organizations were designed for a world that no longer exists.The median business model lifespan has dropped significantly. Research from the Reinvention Academy shows that every fifth company in the world is reinventing every 12 months or less, faster than the traditional budgetary cycle. In this environment of "meta-eruption"—a family of systemic, interdependent disruptions—innovation must combine short-term, measurable wins with long-term focus.
Nadya spent 13 years in mining and established an innovation function in a conservative industry in 2017. The difference between that reality and today is night and day: traditional innovation assumed stability; today's innovation operates in continuous flux.
Notably, the driving force for reinvention is legitimacy. Innovation leaders must earn the right to steer the organization's future through trust and results. Brett emphasizes that legitimacy comes from balancing technical processes with social processes. Functions that only focus on the technical side lack the "two legs" needed to stand. They must develop the ability to sense, diagnose, and respond psychodynamically to the gap between what they see in the world and how the organization sees them.
Rainer also emphasizes that reinvention must always be linked to strategy. If your strategy requires adaptability—and today, most do—then your capabilities must enable that. Innovation is the primary tool for adapting portfolios to the future needs of customers, regulators, NGOs, and users.
Core Concepts for the Renewed Innovation Function
Resource Allocation by Horizon: A Company-Wide Transformation
During his journey transforming the innovation function at Mars, Rainer separated different types of innovation based on horizons, adapting the classic three-horizon model into four:
Horizon 1: Efficiency innovation (running production lines faster) and sustainability targets (paper packaging).
Horizon 2: Nurturing the core (next variant of M&Ms, flavor votes, diagnostics tools).
Horizon 3: Entering existing markets where the company does not yet play.
Horizon 4: Creating entirely new business models (gamer brands, joint ventures).
Horizon 3 sounds easy because the market exists, but it requires different people with a different skill set than those managing horizons 1 and 2. On the other hand, Horizon 4 requires patience: a new business model cannot be big on day one.
"It's impossible that you give birth to an 18 year old," Rainer says. The structure must protect these teams, giving them the specific funding and capabilities they need.
Most organizations ‘work’ in horizons. However what makes this truly significant is how deeply this thinking has been embedded throughout the entire organization.
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 and plans and allocates resources in horizons. That has fundamentally changed the game.
Battles of Assumptions, Not ROI
Innovators often struggle to showcase ROI. As a mere concept, ROI suggests you can predict the future, an increasingly impossible task in today's fast-changing environment. Instead, Rainer advocates for "battles of assumptions." This reorients the conversation from guessing financial outcomes to validating the inputs that drive those outcomes. In practice, this means changing both how questions are asked and how evidence is gathered.
Ask "What makes you believe that is possible with this new thing?" rather than debating whether distribution will be 50% or 60%.
This approach removes emotion from the room and focuses the leadership team on validating the critical uncertainties of a project.
Build Organizational Discipline to Stop Unproductive Work
Reinvention might be more about stopping things that don’t work, than about trying new things.
As such, Nadya proposes a "Kill Coffee" ritual. Every Friday, she reviews her agenda and removes things that no longer make sense—an "organizational detox."
Organizations must run at least one "kill session" per quarter. You could even turn these sessions into a party—creating a fun atmosphere where teams debate what to save and what to stop, removing shame and blame from the process.
Rainer adds that killing projects must be made less subjective.
Break big assumptions down into smaller, testable hypotheses, and ask: "What evidence can we find tomorrow?"
"If it takes three weeks to find the evidence, most of the time you can rephrase your hypothesis into something where you can find out a bit more tomorrow. That can be a phone call or a conversation. Once you've got that evidence that kills it, kill it."
Make Finance Your Strongest Ally
Innovation must be deeply integrated with core business functions, particularly finance.
Rainer states that a CFO who understands how to balance long-term and short-term returns has the power to unlock magic in the organization. The innovation leader's job is to nurture this relationship, helping finance counterparts understand the business value of the portfolio.
Mars shifted from debating individual project ROI to presenting portfolio logic—showing different "planets" of work (margin, growth, capability building) and associated metrics, that roll up to enterprise value in the language the CFO speaks.
Develop Emotional Intelligence to Navigate Organizational Pressure
Brett compares innovation leaders to "Olympians of business" who deal with the highest pressure and uncertainty. Leaders need more than technical skills; they need "psychodynamic support."
This involves:
Role Switching: Developing the ability to switch "hats" or archetypes in the moment. A leader might need to be the "ideas person" in one meeting and a "process person" in the next.
Intentionality: Calling out this switch explicitly. "I know I'm the ideas person, but I have to now switch to the process." This builds trust and calms the team.
Empathy for Colleagues: Decision-makers often arrive at innovation reviews distracted by competing priorities or still processing previous meetings. Brett advises deploying customer empathy techniques to colleagues, and meet them where they are.
Use emotional capital, motivational interviewing, and fair process techniques to diagnose what's happening behind the scenes. Separate whether resistance stems from rational reasons or emotional ones. Is their sense of competence challenged? Understanding the behavioral drivers allows leaders to respond appropriately and achieve mutual outcomes.
Create Executive Sandboxes for Strategic Exploration
Brett uses the Bank for International Settlements (BIS) Innovation Hub as an example of an organization that created a "strategic sandbox" that allows executives to think.
This environment uses real experiment data—sometimes through digital twins or dedicated IT environments—to explore and answer key strategic questions. It creates a container for emergent, highly complex topics.
The executive team reviews findings quarterly, using real data to inform strategy in a parallel process.
Work In Progress
The innovation functions that survive 2026 will look fundamentally different from those designed in the 1990’s. They operate as integrated systems where finance becomes a strategic partner rather than a gatekeeper, where quarterly kill sessions remove zombie projects before they drain resources, and where leaders develop the behavioral flexibility to switch between technical execution and social navigation within the same meeting.
Portfolio logic replaces project-by-project ROI debates. Similarly, Horizon-based resource allocation protects experimental work from the gravitational pull of the core business, and failed experiments generate learning velocity instead of career risk.
The pressure compounds as reinvention cycles compress from years to months, but legitimacy for innovation flows from demonstrated results and the discipline to stop work that no longer serves the strategy.
