Macroeconomic volatility, stock market expectations, internal pressure to deliver ROI: the magnifying glass is set on innovation in 2026. But there's not just one way to respond.
Joel Agard, Group Head of Innovation at Zurich Insurance, and Chantelle Murnaghan, Vice President of Product Innovation and Research at Lululemon, operate in different industries with different constraints.
Their survival strategies are nearly opposite. Joel looks for confirmed senior management sponsorship before starting any project. Chantelle serves the business with near-term wins to earn permission for upstream work the business doesn't yet know it needs.
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Path 1: Requiring Business Involvement
Joel’s team is part of the Strategy Group at Zurich Insurance, directly under the Group CEO. He manages an innovation community spanning 25 countries with roughly 70 people looking after innovation strategy and execution. Zurich is a highly decentralized organization. Only 7 to 8 percent of revenues come from the home market in Switzerland. Major markets include the US, UK, Australia, and Brazil, each operating with different go-to-market strategies, customer segments, products, and market positioning.
The Shift to Deliver Returns
2025 started with a directive from senior management: deliver returns. The environment was no longer about abstract exploration. It was about supporting group profit ambitions. "That was when we shifted the innovation pipeline, or at least the new projects that we started to support, more towards horizon one," Joel notes. "More on the innovations that are close to the core and should deliver short term incentives."
This shift to the core coincided with the explosion of agentic AI. In a data-driven industry like insurance, vendors, consultancies, and startups flooded the zone with promises of transformation. "There was a lot of excitement, but also a lot of snake oil," Joel observes. The result was managing two distinct tracks simultaneously: innovating close to the core for immediate impact while tapping into the unknowns of the new AI frontier.
Aligning the Decentralized Stars
For many years, Joel pursued an ambidextrous innovation strategy. Zurich runs 50 to 60 exploration projects with global scope year over year. The explore muscle is strong. The exploit side, moving toward transformation, is where improvement is needed.
The goal for 2026 is to stop the fragmentation. "I think my main goal, at least for the next six months, is to better align the stars, trying to find these common denominators, these common problems, these common opportunities, and then trying to find the best solutions," Joel says. This helps to eliminate the tendency to reinvent the wheel in almost every market. By identifying large-scale opportunities across major markets, leaders can double down on solutions with cross-market validity, using AI to accelerate time to validation and adoption.
No Lab Work, Only Business Co-Creation
Given that goal, Joel set a strict rule: "I only start new innovation projects when there is someone from the business involved.”
If there is no confirmed senior management involvement, they don't start. The possibility a project will fail or drag on forever and become a zombie project is too high. "I think we all need to be a bit more brutal in killing these zombies early," Joel advises. The time of isolated exploration in a lab is over.
Strategy-Level Positioning
Positioning innovation within the strategy function gives Joel specific advantages. He informs the board of directors about the art of the possible, past deliveries, and emerging capabilities. This typically shapes group strategy, and certain opportunities land with an innovation flavor.
He has made a habit of reporting back on outputs: product achievements, profit impact, customer outcomes. This demonstrates that innovation teams are not just doing “fancy” work, but actually shipping and delivering returns.
Path 2: Serve to Earn
Chantelle’s portfolio spans multiple horizons. Horizon 1 acts as the R to the product organization's D, focused on raising the water level within a constrained commercialization calendar. The upstream R&D team focuses on breaking convention, bringing novel technologies and methods of make to the table. The explore portfolio focuses on early-stage technologies and fueling the pipeline through global academic partnerships.
Last year brought unexpected macroeconomic pressures: tariffs, increased competition, and reduced spending in the US market, Lululemon's largest. The company is at a critical inflection point after years of strong growth fueled by the COVID trend cycle. As the growth curve lessens, stock market pressure on the company intensifies.
Given this pressure, Chantelle adopted a framework from Gina O'Connor regarding strategic innovation efforts. The strategy is to modulate effort levels rather than shut down long-term work when pressure mounts.
"One of the things that has been paramount in my thinking is the notion of never turning it off, but maybe turning it up and turning it down," Chantelle notes. "That's been a lot of my focus over the last year: maintaining the balance across my portfolio, but just adjusting the volume slightly in various areas."
This volume control method allows teams to service immediate business needs without severing the lifeline to the future. Chantelle's biggest fear was how to combine serving the business in the moment while not shutting off longer-term, more challenging or disruptive efforts.
Serving the Business to Earn Permission
Chantelle has a different stance from Joel when it comes to business sponsorship. Whilst Joel will not start a project without confirmed senior management involvement, Chantelle serves the business with her Horizon 1 portfolio to earn permission for upstream work that lacks business sponsors yet.
The Horizon 1 portfolio has strong business input. There is a category to grow, a product life cycle to inflect, a product improvement to drive, a new category like Pilates surging that demands quick response. These projects have tight connectivity to the business and strong business sponsorship.
Upstream projects typically do not have a perfect business sponsor early on. They are not the most urgent fires to put out. Many are born from the team's gut, asking what would you love people to love, then pulling in a collision of insights to validate the direction.
Creating New Channels for Innovation Output
Lululemon is a vertical organization. Every product must survive the entire commercialization process and sit on a shelf next to the core assortment, which demands connectivity. The goal for 2026 is to bypass this bottleneck by building new channels of output that distinguish between two types of deliverables: brand halo, which drives credibility and a perspective of innovativeness, and product platforms to scale, which connect to the broader assortment.
This allows teams to seed net-new innovations that may not be immediately scalable but are competitively differentiated.
The Collision of Insights
For upstream innovation, where the goal is to break convention, the customer cannot articulate what they want. "If it's new, no one's going to ask for it," Chantelle asserts. "And so the push for my team is, how do you find the collision of insights... when you're paying attention to consumer behaviors, you're seeing how an activity is shifting."
The collision of insights means finding convergent validity from different sources. Chantelle illustrates this with the shift in female empowerment in the gym. Her team identified a cultural move away from cardio and slimming toward strength training and taking up space.
These signals come from specific sources. Ambassador communities, movement practitioners, and studio owners provide firsthand perspectives. In contrast, Horizon 1 portfolios rely heavily on voice of consumer feedback, product life cycle data, and competitor analysis.
ROI Through Resourcefulness
Chantelle's financial strategy is unique. The Horizon 1 portfolio drives millions of dollars in savings per quarter by elevating product deliveries and putting the human at the center of the product creation process. The upstream work is subsidized through creative funding mechanisms.
The team leverages government funding for R&D efforts. Tax credits pay for a significant portion of team salaries and the work itself. A brand new lab is being built where 30 percent of capex costs for equipment will come back through government funding. Academic partnerships are structured with three full-time core people, while the rest of the work leverages industry-academic grants. This approach has enabled 200 projects at half the typical cost.
In some cases, this creates cost-neutral years without a single product delivery contributing to that cost. Anything delivered becomes incremental value above the baseline.
Two Paths, Same Pressure
Both Joel and Chantelle face the same external forces: macroeconomic volatility, stock market expectations, internal pressure to deliver ROI, and the magnifying glass set on innovation in 2026. But their responses reveal something larger.
There is no universal innovation operating system. Organizational structure, industry dynamics, and the relationship between innovation and the core business dictate which survival strategy will work.
