The Real Reason Most Innovation Fails? It’s Nowhere in the Strategy

You don’t have an innovation problem—you have a strategy problem

Innovation today is like those New Year’s gym memberships: eagerly bought, loudly proclaimed, and quietly abandoned by February. We fall in love with the idea. We hold brainstorming sessions with Post-its, Sharpies, maybe even a squishy toys if budget allows. Teams get assembled, slogans get printed, and visions get declared. And yet the outcome is often depressingly familiar: a flurry of activity that ends in well-funded drift.

In past lives, I’ve compared innovation inside large organizations to close-quarters combat. It’s tight, messy, and highly personal. Progress is measured in inches, not miles—and frequently, your toughest opponents aren’t out in the market; they’re buried somewhere in your own org chart. I’ve watched brilliant grassroots innovators pour their energy into bold ideas, only to be quietly outmaneuvered by PowerPoint politics and “this-is-how-we-do-it” inertia.

That’s why real innovation (scalable, durable, repeatable innovation) must come from the top. Not just in spirit, but in structure. It must be baked into the organization’s core logic for how it plans to win. Otherwise, you’re just dressing a hobby in a hoodie and hoping it turns into strategy.

Section I: Innovation Defined – More Than Ideas, It’s the Engine of Strategic Advantage

To avoid debate on the meaning of innovation, I root my definition in the thinking of three foundational voices: Peter Drucker, Joseph Schumpeter, and Clayton Christensen.

Peter Drucker: “Innovation is the effort to create purposeful, focused change in an enterprise’s economic or social potential.”
— Innovation and Entrepreneurship (1985)

Drucker understood that innovation wasn’t a flash of genius; it was the deliberate act of unlocking new value. Not every invention qualifies. If it doesn’t create economic or social value, it’s not innovation.

“Inventions do not translate to innovation if they are not creating new social or economic value.”

Take the story of Xerox. In the 1960s and ’70s, they had both the computer mouse and the graphical user interface sitting in their labs at PARC. But it was Steve Jobs, in a brief visit, who recognized their potential and translated them into a business model—the Macintosh—that created economic value for millions. That was innovation.

Joseph Schumpeter: “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumer goods, the new methods of production or transportation, the new markets… all these are created by the entrepreneur.”
— Capitalism, Socialism and Democracy (1942)

Schumpeter framed innovation as the disruptive force that “breaks the circular flow” of industry. Entrepreneurs drive it, not to improve efficiency, but to create new value systems that redefine competition.

Clayton Christensen: “The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model make them good at the existing business… but poor at competing for disruption.”
— The Innovator’s Dilemma (1997)

Christensen contributed the crucial insight that innovation is not merely about new products, but about building new business models, new value-generating structures that align with emerging customer jobs-to-be-done. The dilemma? The same systems that make companies successful today often render them unable to adapt tomorrow, unless innovation is strategically embedded. In an exponential world where change is accelerating faster than a Taylor Swift concert selling out, “dabbling” in innovation is a good way to blind yourself to extinction.

A Working Definition of Innovation

Innovation involves seeking out new value for both customers and the business. It is the process of continually searching, discovering, and scaling new value sources and value-creating structures that sustain competitive advantage. It doesn’t necessarily mean a change in corporate vision, but it must be part of the “how to win” in a specific playing field. Otherwise, it becomes misaligned activity, or worse, innovation theater.

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Section II: Methodology for Measuring Innovation that Delivers an Enduring Edge

For decades, companies have been told to “innovate or die,” which sounds dramatic until you realize how often they choose the latter. Most innovation efforts fall short not because people aren’t trying, but because those efforts are marooned on Innovation Island—untethered from the mainland of corporate strategy.

Here’s our simple thesis: innovation only delivers sustained value when it is structurally and strategically embedded into how an organization plans to win. Not when it’s a pet project, not when it’s a PR campaign, but when it’s the connective tissue between vision and execution.

From Innovation Noise to Strategic Signal: Strategy-Led Innovation Scorecard

To move beyond anecdotes and into actual accountability, we built the Strategy-Led Innovation Scorecard—a diagnostic tool that turns strategic vagueness into visible gaps and measurable steps. It doesn’t care how many Post-its you used last quarter. It cares how innovation shows up in your strategy documents, budget priorities, decision-making systems, and actual customer outcomes.

This logic unfolds in four interconnected stages:

1. Strategic Logic (Q1–Q3)
   Is innovation just in your marketing deck or is it embedded in your "how to win" logic? If it's not shaping competition choices, capital allocations, and your board’s attention span, it’s background noise.

2. Execution System (Q4–Q6)
   Innovation doesn’t execute itself. This stage asks whether your teams have repeatable systems to discover, test, and scale new ideas—or whether you’re relying on occasional flashes of brilliance and caffeine-fueled hackathons.

3. Value Delivered (Q7–Q9)
   If a pilot program launches in the forest and no customer pays for it, did it make a sound? We track real impact: new revenue, margin improvements, customer breakthroughs. Not buzz. Not busywork.

4. Strategic Edge Enablers (Q10–Q13)
   Finally, can your organization keep winning when the rules change? This section stress-tests resilience: cultural enablers, systems flexibility, and whether your teams can challenge the status quo without triggering immune responses from the core business.

The Scorecard: A Self-Diagnostic for Executives

The diagnostic includes 13 questions, grouped into the four stages above. Each one is scored from 1 to 5 on a customized Likert scale calibrated to the question. This isn’t a feel-good quiz. It’s a mirror—and sometimes, the mirror isn’t flattering.

Each score tells a story:

• 1 = Not at all true. No evidence or structure.

• 2 = Minimally true. Ad hoc or isolated attempts.

• 3 = Partially true. Some alignment, not systematic.

• 4 = Mostly true. Structured, but not yet central.

• 5 = Fully true. Embedded in strategy, operations, and culture.

A sample of three of the thirteen scorecard questions is provided below. For full access, connect with me directly and I’ll walk you through the unvarnished truth about your innovation maturity.

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Section III: Evidence from High and Low Scoring Organizations

When we applied the Strategy-Led Innovation Scorecard across a mix of 23 commercial organizations—spanning global giants, industry rebels, ambitious scale-ups, and weathered legacies—the signal was clear: innovation is only as strong as the system that supports it.

High Performers: Where Strategy Fuels the Engine

These were not dabblers. These were architects. Companies like Apple, Intuit, and Tesla didn’t just tinker. They baked innovation into their market logic, capital flows, and team charters.

• Apple links its chip development to strategic control. Annual reports read like manifestos of market reinvention.

• Intuit turned its "Design for Delight" framework into a full-body organizational workout. Innovation isn’t a department—it’s the DNA.

• Amazon remains a paradox: execution excellence with world-class mechanisms like "Working Backwards," but a curious reluctance to explicitly position innovation in filings. Still, the machinery hums.

• Tesla? The innovation playbook is strong, but personality-driven. Systems? Less so. But when Musk is the system, chaos becomes a feature.

Low Scorers: Busy, Not Better

And then there are the others. Organizations where innovation is busywork at the edges. Nice decks, flashy pilots, and very little to show when the next earnings call hits.

• GE dabbled with FastWorks. But once Immelt exited, so did the program. If innovation depends on one leader, it’s not a system. It’s a personality cult.

• BlackBerry tried cybersecurity. Kind of. But filings suggest a lack of strategy, coherence, and spine.

• Kodak wandered from film to blockchain to pharma—a desperate swipe-right on reinvention that never quite turned into a second date.

Section IV: Public Sector – Innovation as National Survival Strategy

In government, innovation isn’t about quarterly growth. It’s about mission success. And sometimes, survival. Here too, we applied the Scorecard to organizations like Army Futures Command (AFC), Defense Innovation Unit (DIU), and Ukraine’s Armed Forces.

*Average reflects only the questions with verifiable publicly available information.

Key Insights:

• AFC has aligned innovation with doctrine—but legacy systems still put the brakes on.

• DIU gets kudos for speed and commercial linkage. But value delivery? Spotty.

• OSC shows promise but is still in early innings.

• Ukraine? They turned innovation into the doctrine. Real-time AI drones, DIY swarm warfare, and an industrial mobilization that’s as gritty as it is ingenious. In Ukraine, innovation isn’t a program. It’s existential.

“In Ukraine, innovation is not a program—it is the strategy.”

— NATO ACT report on Adaptive Warfighting, 2024

Section V: Final Takeaways and Executive Implications

Let’s make this plain: innovation that isn’t tied to strategy is just a hobby. And strategy that doesn’t evolve with innovation? That’s just a museum exhibit waiting to happen.

The data is unambiguous: out performers treat innovation as infrastructure. Not a pet project. Not a slide in the earnings deck. It shapes how they compete, how they fund, how they lead, and how they adapt.

This is the line between innovation theater and innovation that delivers. One disappears in a downturn. The other rewrites the playbook.

So, ask yourself:

• Is innovation a line item, or a lifeline?

• Is it embedded in how we decide, invest, and adapt?

• Can we scale what works—or are we endlessly piloting?

Because in a world of AI disruption, geopolitical whiplash, and climate chaos, the only thing more dangerous than change is pretending it won’t happen to you.

The Strategy-Led Innovation Scorecard is not just a tool. It’s a challenge. To see clearly. To lead decisively. And to embed innovation not as theater, but as the plot.

Innovation, when embedded into strategy, doesn’t just help you win. It helps you keep winning—long after the headlines fade and the Post-its dry up. Lets discuss further how to integrate innovation into your strategy.

Sources:

1. Drucker, P. F. (1985). Innovation and Entrepreneurship. Harper & Row.

   Available online: https://archive.org/details/innovationentrep0000druc_i2c5

2. Schumpeter, J. A. (1942). Capitalism, Socialism and Democracy. Harper & Brothers.

   Referenced concept: Entrepreneurial disruption and creative destruction.

3. Christensen, C. M. (1997). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business Review Press.

   Summary: https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

4. Wired Editors. (1999). Customize or Die. Wired.

   Retrieved from https://www.wired.com/1999/07/customize-or-die

5. Lepore, J. (2014). The Disruption Machine: What the gospel of innovation gets wrong. The New Yorker.

   Retrieved from https://www.newyorker.com/magazine/2014/06/23/the-disruption-machine

6. Schlender, B. (2013). Clayton Christensen’s Radical Idea: Transform Capitalism. Wired.

   Retrieved from https://www.wired.com/2013/02/mf-clayton-christensen-wants-to-transform-capitalism

7. Xerox PARC & Steve Jobs Story – referenced via secondary reports in innovation literature and tech history.

8. Apple Inc. (2023). Annual Report (Form 10-K).

9. Intuit Inc. (2023). Annual Report (Form 10-K).

10. Amazon.com, Inc. (2023). Annual Report (Form 10-K).

11. Tesla, Inc. (2023). Annual Report (Form 10-K).

12. General Electric Company (2023). Annual Report (Form 10-K).

13. BlackBerry Limited (2023). Annual Report.

14. Eastman Kodak Company (2023). Investor Filings.

15. U.S. Department of the Army. (2023). Army Modernization Strategy.

16. U.S. Department of Defense. (2024). FY25 RDT&E Budget Justification.

17. Defense Innovation Unit. (2023). Annual Report.

18. U.S. Government Accountability Office. (2024). GAO-24-106181.

19. Office of Strategic Capital. (2024). Founding Strategy Memo & FY25 Budget Request.

20. NATO Allied Command Transformation. (2024). Adaptive Warfighting Reports.

21. Ministry of Defense of Ukraine (2024). Operational Innovation Reports & Updates.