How To Balance Innovation With Core Business Strategy

When feeling the urgent pressure of new technologies, disruptive change and fast-moving markets, inspirational leaders focus on a surprising question: why does our organization even exist? It’s easy to get caught up in the whirlwind of the latest tech or what the competition is doing, but deeply understanding your core purpose can cut away distractions, focus you on what matters and create a vision for what’s next. 1/ Start by looking at the very nature of your organization and strip away the packaging, pricing and delivery. Ask yourself: what unique role does this organization play in the world? Why do we exist, and what about that has remained consistent across our past and our present, and should inevitably drive our future? 2/ Craft a vision for the future that is disrupted by change but grounded in purpose, envisioning how the world will continue to rely on our existence, as needs are timeless. Resist picking specific technologies, products, packages or solutions that this value is embedded in, because these are not timeless. 3/ Engage your organization in using this purpose to inspire what might be next. Ask yourselves, what are other ways that we may fulfill our purpose beyond what we’re doing today? What are the different shapes, business models, packages or delivery vehicles that might look different but magnify our purpose? Which of these might help us not just survive, but thrive in a future shaped by disruption and new technologies? Look closely at organizations that have thrived through previous disruptions to recognize how this successful pattern of returning to their purpose has fueled success. Take Disney - an organization that has embedded magical family experiences through immersive storytelling into everything it does (its purpose), whether it’s hand drawn animation, theme parks or CGI. The core idea here is to resist simply reacting to markets or chasing trends, but rather to follow purpose-driven innovation: getting inspiration from how we reimagine ourselves to reinforce our reason for existing, not distract from it. #LIPostingDayMay

"Disrupt or be disrupted" has become the battle cry of business gurus everywhere. But what if the obsession with radical reinvention is actually holding your company back? The surprising truth many businesses discover too late: strategic evolution often outperforms high-risk transformation when it comes to sustainable growth and profitability—especially for small and medium-sized businesses with limited resources. Breakthrough Innovation ✅ Opens entirely new markets ✅ Can position you as an industry leader ✅ Potential for exponential growth ❌ High failure rate (most attempts fail) ❌ Requires significant resource investment ❌ Often conflicts with existing business priorities. Evolutionary Innovation ✅ Builds on existing strengths ✅ Lower risk profile ✅ Faster implementation and ROI ✅ Aligns with current customer relationships ❌ Smaller growth increments ❌ Less protection from disruptive competitors. So, where to focus your innovation efforts? Before starting a "disruption journey," consider: 👉 Understand the current stage of your business. Are you at the beginning of the journey, or is your business already consolidated? This determines which innovations will gain traction and which will struggle. 👉 Innovate within your model first. A local bakery can expand into online ordering and subscription boxes without changing its core product expertise. What's your equivalent opportunity? 👉 Create separate spaces for breakthrough innovation. When testing radically different approaches, establish separate teams with different metrics. 👉 Focus on the job, not just the product. Businesses should ask, "What problem are we really solving?" rather than "How can we improve our product?" 👉 Evaluate innovation fit with two questions: Does this innovation serve a similar customer job? Is it compatible with our profit formula (margins, resources, processes)? The strongest businesses aren't constantly reinventing themselves—they're strategically balancing evolution and revolution. Your business doesn't need to transform completely to innovate meaningfully. Understanding your model's natural evolution might be the most powerful innovation insight of all.

Here’s a new, highly-timely way to classify innovations: FLEXIBLE vs. INFLEXIBLE. When chaos abounds, prioritize the FLEXIBLE. Yet companies usually spend most money and time on what’s INFLEXIBLE. Six ways to change the balance are: 1️⃣ Map your innovation portfolio How have you spread your bets along axes such as time horizon, type of risk taken, and ability to change course? Know where your portfolio is currently at, and what profile you wish to move toward. 2️⃣ Create options What are inexpensive bets you can place on ways your world might shift? Consider, for instance, low-cost products that might be embraced by customers feeling acute economic pressures. Perhaps these bets have a relatively large probability of not paying off – that’s OK if they’re taken inexpensively, keeping your financial risk small. 3️⃣ Think platforms, not products Platforms create flexibility to change what you offer customers, while retaining a sticky customer relationship. They often have a software component, even in the world of physical goods. 4️⃣ Stay focused on your customers’ constants We can be certain that today’s chaotic environment won’t settle down soon. But your customers’ Jobs to be Done stay fairly constant. Know those very well and concentrate on them. 5️⃣ Prioritize business model and service innovations Product innovation often takes time and multi-year planning. Business model and service innovations are much more flexible (and cheaper), yet oftentimes companies lack clear mechanisms to pursue these. Fix that. 6️⃣ Pursue Costovation You can concentrate some of the less flexible portions of your portfolio on cost innovation (Costovation), because your costs are often more controllable than your revenues. Use the tools of innovation to radically re-think your costs. The innovation literature has many classifications: disruptive vs. sustaining, existing vs. new market, etc. But it’s been rare to classify flexible vs. inflexible. Now’s the time to change that. When everything seems to be swirling, focus on what’s FLEXIBLE.

When I was head coach for Satya Nadella’s innovation team, I helped leaders think in two modes: 1️⃣ 𝗥𝘂𝗻 𝘁𝗵𝗲 𝗕𝘂𝘀𝗶𝗻𝗲𝘀s – Sustain and optimize today’s success. 2️⃣ 𝗖𝗵𝗮𝗻𝗴𝗲 𝘁𝗵𝗲 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 – Disrupt, innovate, and build tomorrow. I call this 𝗧𝘄𝗼-𝗧𝗿𝗮𝗰𝗸 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 (or 𝗕𝗶𝗺𝗼𝗱𝗮𝗹 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀). It’s a simple but powerful mental model that unlocks innovation while keeping the core business strong. Without this mindset, 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗳𝗲𝗲𝗹𝘀 𝗹𝗶𝗸𝗲 𝗮 𝗳𝗶𝗴𝗵𝘁—a tug-of-war between what works now and what’s needed for the future. But when leaders get this right, 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗴𝗲𝘁𝘀 𝗲𝗮𝘀𝗶𝗲r. 🔹 𝗧𝗿𝗮𝗰𝗸 #1: 𝗖𝘂𝗿𝗿𝗲𝗻𝘁 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 (𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗶𝗻𝗴) 👉 Current customers, business models, products, talent, and KPIs 🔹 𝗧𝗿𝗮𝗰𝗸 #2: 𝗙𝘂𝘁𝘂𝗿𝗲 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗡𝗼𝘄 (𝗗𝗶𝘀𝗿𝘂𝗽𝘁𝗶𝘃𝗲) 👉 Future customers, new business models, emerging talent, and fresh KPIs The key? Working backward from 𝗯𝗼𝗹𝗱, 𝗳𝘂𝘁𝘂𝗿𝗲-𝘀𝘁𝗮𝘁𝗲 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼𝘀 while taking action today. You run small 𝗲𝘅𝗽𝗲𝗿𝗶𝗺𝗲𝗻𝘁𝘀, 𝘃𝗮𝗹𝗶𝗱𝗮𝘁𝗲 new value, and 𝗱𝗶𝘀𝗿𝘂𝗽𝘁 𝘆𝗼𝘂𝗿𝘀𝗲𝗹𝗳 before the market does it for you. 🔹 This approach helped Fortune 500 leaders reimagine their industries. 🔹 It helped teams unlock billion-dollar breakthroughs. 🔹 And it made “innovation” a system, not a slogan. Leaders who master this approach 𝘄𝗶𝗻 𝘁𝗼𝗱𝗮𝘆 𝗮𝗻𝗱 𝘀𝘁𝗮𝘆 𝗿𝗲𝗹𝗲𝘃𝗮𝗻𝘁 𝘁𝗼𝗺𝗼𝗿𝗿𝗼𝘄. Are you running your business AND changing it at the same time? #innovation  #leadership