The Innovation Matrix

From the wheel to generative AI, innovation has always been the cornerstone of progress—propelling societies into new territories and new dimensions. To organizations, innovation means having an edge over the competition and increasing revenue while adapting quickly to a changing market.

While many leaders know that innovation matters for their company’s near-term performance and long-term success, few know how to build a company ready to innovate. And without this understanding, turning strategy into action becomes a guessing game. “Innovation is a critical driver of growth, especially in this post-pandemic, digital environment,” says David Ellis, Senior Vice President of Korn Ferry’s Global TA Transformation practice. “The first challenge organizations need to wrestle with is what innovation means, then they can start to tackle how to deliver it.”

Korn Ferry set out to define innovation, pinpoint the pillars for success, and provide the tools companies need to activate their innovation goals. Through surveys, academic research, and historical data, we have identified the key constants and variables that organizations must have to bring their innovation initiatives to life.

Introducing the Innovation Matrix

Based on our research, we developed Korn Ferry’s Innovation Matrix: a set of interconnected levers that support innovation success. For this success to stick, the four inner levers—leadership, people, infrastructure, and culture—must be combined and optimized according to the organization’s strategy, purpose, and business context, which form the outer ring. “By considering their environment, businesses should identify growth strategies and uncover opportunities to strike the right balance between incremental and transformative value,” says Harmen van Os, Associate Client Partner in Korn Ferry’s Consumer practice.

When paired with Korn Ferry’s Enterprise Success Framework and Enterprise Health Scan, the Innovation Matrix helps companies identify the most critical levers for unlocking innovation, compare their performance against industry benchmarks, and find the solutions that support their innovation goals.

The Outer Ring

Innovation does not happen in a vacuum—it exists to create value in the world. It is a way to achieve business objectives and should be aligned with a company’s business strategy, purpose, context—the three factors of the Innovation Matrix’s outer ring.

• Strategy: First, we consider the four types of innovation (transformational, marketplace, category, and operational) and their implications for leadership and talent management. By exploring these types, organizations can better leverage different approaches to innovation that address strategic challenges and achieve growth.
• Purpose: Next, we explore the role of purpose as a catalyst for innovation and its capacity to enhance intrinsic motivation and resilience. A narrow focus on profits can suppress creativity and imagination. By contrast, enabling employees to connect to a deeper purpose creates positive emotional experiences and expansive thinking that support innovation.
• Business Context: We highlight the importance of business context for every innovation initiative, recognizing that the fast-moving global landscape—including economic, environmental, technological, and geopolitical influences—is an inextricable backdrop to every company’s innovation goals.

Before starting an innovation journey, though, a company would need to consider its identity, the current global landscape, its objectives, and the reasons behind those objectives. “Successful leaders of innovation navigate complexity, balancing their company’s unique capabilities and objectives in sync with an ever-changing landscape,” says Jane Edison Stevenson, Global Vice Chair of Korn Ferry’s Board and CEO Services. “The ability to deliver on an innovation portfolio with distinct types of innovation—transformational, marketplace, category, and operational—with the leadership, capabilities, and culture for each, drives the sustainable growth that is essential for outsized results.”

The Inner Ring

Innovation requires a holistic approach. Even if one part of a company is ready to support an innovation initiative, it cannot succeed on its own. The inner ring identifies the components of the organizational ecosystem that must be optimized for innovation to succeed.

• Leadership: Leaders need to clarify the vision for innovation, align it with the organization’s core purpose, and make it understandable and actionable for teams across the business. This includes leveraging metrics, championing data-driven decisions, managing change, eliminating obstacles, and connecting the dots between the different functions vital to innovation.
• People: Diverse and inclusive teams drive innovation within organizations by improving a company’s ability to learn and adapt. Cognitive, cultural, and demographic diversity can maximize a group’s collective intelligence, supporting up to 19% higher innovation revenue compared to more homogenous organizations, according to research.
• Infrastructure: Companies with a strong organizational infrastructure can succeed by leveraging absorptive capacity, business analytics, and an early adopter mindset. In addition to data and technology, our research highlights the critical importance of cross-functional teams, both within and across organizational boundaries.
• Culture: Innovative thinking flourishes in cultures that promote and incentivize risk-taking, collaboration, and diversity. Innovative cultures are not just about creating psychologically safe environments for creative thinking and collaboration but also about how innovation is recognized and rewarded at the highest levels of the organization.

Activating the Innovation Matrix

 Sustainable growth depends on developing and aligning all components of the Innovation Matrix. We activate this through the Korn Ferry Enterprise Success Framework, which evaluates effectiveness across six essential dimensions: business context, purpose, strategy, organization, talent, and culture.

Korn Ferry’s Enterprise Health Scan measures how well an organization performs in these areas, identifying what supports or hinders their innovation progress. Based on the Enterprise Success Framework, the Enterprise Health Scan offers clear guidance on identifying the optimal structure, finding the right talent, and aligning their purpose with their culture. This enables organizations to focus their strategy and make smart investments in propelling innovation.

Bringing Innovation from Idea to Impact

Innovation creates value through new ideas, processes, and products, depending on effective leadership, supportive people, strong infrastructure, and a psychologically safe culture. Visionary leaders spark creativity and inspire teams, while data-driven insights offer a competitive edge. A well-designed infrastructure promotes teamwork and balances innovation responsibilities, and a culture that supports risk-taking and values diversity fuels innovative thinking.

But for innovation to be impactful, it needs to align with an organization’s strategy, purpose, and current business context. The Innovation Matrix offers a clear, research-based approach for building a foundation to achieve innovation goals and drive results. It helps organizations set objectives, allocate resources, and turn innovative ideas into action.

“Different kinds of innovation have different obstacles, but it’s always about an organization choosing to go down a different path,” says Mike Solomons, Lead of Korn Ferry’s Inclusive Innovation Solution. “Our job is to help organizations be ready to be on that new path, and that means having the right leadership, people, culture, and infrastructure in place.”