“Smart companies fail because they do everything right. They cater to high-profit-margin customers and ignore the low end of the market, where disruptive innovations emerge from.”
— Clayton M. Christensen
Innovation in established companies often begins with tension — the tension between what is known and what could be. As organizations scale and mature, they build up expertise, processes, and routines that deliver predictability. But launching something new — especially in times of fundamental change — requires letting go of some of that certainty in favor of exploration.
The Strategic Imperative for Incumbents
Most successful companies operate their core business near the top of the S-curve of adoption — a model that visualizes the lifecycle of a product or technology: slow early growth, rapid acceleration, and eventual maturity. Their structures, processes, and incentives are designed to optimize what already works, focusing on consistency, efficiency, and continuous improvements.
However, launching a new product, especially one that’s fundamentally different, often means returning to the starting point of a new S-curve. Efficiency gives way to exploration, and alignment gives way to ambiguity. Mature organizations can struggle to adapt, as the rules are different at this stage. What worked to scale the last success may offer an important springboard for what’s next, but it also comes with its unique set of challenges and internal contradictions.
The real challenge is that what made the company great in the first place — its strength in execution — can become a liability when flexibility and fast learning are needed. That’s why strategy isn’t just helpful here — it’s essential.
The Challenge of Internal Alignment
Introducing a new offering isn’t just a market or technology challenge; it’s an organizational one. Processes, metrics, resource allocation models, and decision-making structures are often wired to support the existing business — not the emerging one. As a result, new initiatives are forced to compete for mindshare, budget, and legitimacy in a system that may unintentionally reject them.
Without a clear, well-articulated strategy, even good ideas struggle. New efforts get pulled back toward the gravitational center of the core business. Instead of momentum, you get friction. Instead of progress, dilution.
It’s not that people are against innovation — far from it. But without clarity, alignment, and air cover from leadership, most people will default to what’s safe and known. That’s human. That’s why strategy must act as a bridge: between present and future, core and new, comfort and risk.
The Role of Clear Strategy
This is where strategy becomes essential. Not a plan. Not a roadmap. But a guiding narrative: one that aligns leadership, clarifies priorities, and creates space for something new to emerge. A strong strategy doesn’t just explain what’s happening; it explains why it matters. It makes assumptions explicit and shared, giving people a reason to act and a critical context for doing the important planning work that follows.
Think of strategy as scaffolding: it gives temporary structure and direction until the new initiative can stand on its own. Done right, it fosters trust, reduces friction, and speeds up decision-making — especially when the path forward is anything but obvious.
Key Considerations for Strategic Innovation
Every organization is different, but for those seeking to innovate meaningfully, a few recurring principles stand out:
- Separate, but connected: Create dedicated teams for new initiatives — with enough autonomy to move, but enough connection to benefit from the broader organization. Too much distance and they lose access; too much closeness and they lose focus.
- Measure what matters now: Traditional performance indicators may not apply in the context of the new. Redesigning metrics that reflect the stage, goals, and realities of the new effort is imperative. Early indicators of learning, customer validation, or speed can be more valuable than short-term financials.
- Leadership visibility: When leadership champions the strategy — consistently, visibly, inclusively — it sends a powerful signal. Not just to teams, but to the whole organization. It signals that the new matters, and that the company is serious about it.
- Cultural readiness: Encourage experimentation, tolerate the inevitable early stumbles, and reward learning. Strategic innovation depends as much on mindset as on execution. Culture is not a soft side issue — it’s the medium through which all strategy flows.
In Closing
Innovation inside established companies demands more than vision. It demands clarity. It’s not just about building something new — it’s about building the conditions in which new things can thrive. That’s what strategy does. It creates space for movement, alignment for action, and a path from complexity to conviction.
The future doesn’t arrive all at once. It sneaks in at the edges. Companies that recognize it early — and create the right strategy to nurture it — are the ones that shape what comes next.