How to Manage Innovation During a Crisis Using the Ambition Matrix
In times of disruption, leaders often ask me a critical question: How do we continue to innovate when everything around us feels uncertain?
During the pandemic, this question hit harder than ever. So many organizations instinctively pulled back, tightened budgets, and doubled down only on what was safe. But I believe moments of crisis aren’t the time to retreat, they're the time to rethink.
One of the most powerful tools I use with leaders and organizations is something called the Ambition Matrix. It’s a framework that helps companies strategically manage innovation priorities, especially when resources are tight and uncertainty is high.
What Is the Ambition Matrix?
The Ambition Matrix helps companies categorize their innovation initiatives into three bands:
Core Innovations
These are incremental improvements to existing products, services, or processes.
Small upgrades. Efficiency boosts. Optimization.
They typically generate a 5–10% lift, and organizations spend about 70% of their innovation energy here. It’s the safest zone improvements that customers expect and rely on.
Adjacent Innovations
Opportunities somewhat outside the core business but related enough to leverage current capabilities. These initiatives usually get around 20% of focus and act as a bridge between core improvements and transformative projects.
Transformational Innovations
These are the bold bets on the ideas that change industries, redefine categories, and reshape the future. Despite receiving only 10% of efforts, they generate 70% of the total innovation value. These initiatives feel risky and uncomfortable, but they are where exponential growth comes from. Investing in these initiatives enables companies to redefine markets and create breakthrough growth.
The framework encourages a portfolio mindset, helping organizations balance risk, reward, and resource allocation while visualizing innovation efforts as a “portfolio pie.”
Why the Ambition Matrix Matters During a Crisis
In moments like the pandemic, the natural instinct is to retreat entirely to core innovation to play safe, cut spending, and wait things out. But I believe that’s exactly when bold leaders can separate themselves.
If an organization has strong capital reserves and wants to capture market share, a crisis is actually the perfect time to increase investment in transformational innovation, even pushing that slice from 10% to 15–20% or more.
That decision can position a company not just to survive, but to emerge from a crisis stronger, faster, and ahead of everyone else who paused.
While competitors freeze, innovators build.
The Power of a Balanced Innovation Portfolio
Thinking in terms of a portfolio like a pie chart of innovation energy gives leaders clarity, structure, and agility.
Instead of betting everything on either incremental improvement or radical disruption, the Ambition Matrix encourages dynamic balance based on real-time conditions.
When conditions shift, the portfolio shifts:
If the world is stable → invest heavily in core and adjacent improvements.
If the world is volatile and you have capital → bet bigger on transformational opportunities.
This mindset enables organizations to stay resilient while unlocking new value and competitive advantage.
The Role of Adjacent Innovations
Adjacent initiatives explore opportunities that are slightly beyond the core business. By leveraging existing capabilities, organizations can pursue moderate growth and diversify without taking extreme risks. This category acts as a critical bridge, ensuring the company doesn’t stagnate while preparing for transformational change.
Transformational Innovations: Small Focus, Big Impact
Transformational initiatives are the most ambitious and disruptive. Even with limited investment, they deliver disproportionate value. During the pandemic, companies with strong capital reserves and aspirations for market growth should consider increasing transformational innovation efforts to 15-20% or more. This strategic shift positions businesses for accelerated post-crisis growth and long-term competitive advantage.
Pandemic as a Catalyst for Innovation Portfolio Rebalancing
Crises often tempt companies to retreat into cost-cutting and efficiency. However, research from Deloitte shows that organizations that balance core, adjacent, and transformational initiatives remain resilient and well-positioned for growth. The pandemic offers a unique opportunity to reassess priorities, adjust investments, and adopt bold, forward-looking strategies.
Dynamic Innovation Enables Growth and Resilience
A flexible innovation portfolio allows organizations to:
Maintain stability through core initiatives
Explore moderate growth with adjacent opportunities
Capture high-value breakthroughs with transformational projects
By continuously adjusting the balance across these bands, companies can adapt to disruptions, seize new opportunities, and drive long-term success.
Final Thoughts
The Ambition Matrix is more than a tool, it's a strategic framework for navigating uncertainty. By intentionally balancing core, adjacent, and transformational innovations, organizations can survive turbulent times, capture new opportunities, and emerge stronger.
In short: don’t just protect your business during a crisis, innovate strategically and boldly.
Frequently Asked Questions
Q1. What is innovation management?
Innovation management is the process of organizing and guiding new ideas, products, or processes. It helps companies stay competitive, balance risks, and ensure resources are used efficiently to generate value and growth.
Q2. Why is innovation important during a crisis?
During a crisis, innovation allows companies to adapt to uncertainty, discover new opportunities, and maintain growth. It ensures businesses don’t just survive but can emerge stronger by solving emerging customer and market challenges.
Q3. How do companies prioritize innovation projects?
Companies evaluate potential impact, risk, and resource requirements. They often use frameworks like the Ambition Matrix or portfolio approaches to allocate focus efficiently across incremental, adjacent, and transformational initiatives.
Q4. What are core, adjacent, and transformational innovations?
Core innovations improve existing products/services, adjacent innovations explore related new areas, and transformational innovations create groundbreaking, market-changing ideas. Together, they balance short-term stability with long-term growth.
Q5. How does research support innovation decisions?
Research and data help leaders understand which initiatives are likely to succeed. Studies, market insights, and benchmarking guide resource allocation, reduce guesswork, and improve the probability of delivering high-value outcomes.
Q6. How do businesses adapt innovation strategies during external disruptions?
Businesses monitor market changes, adjust resources across core, adjacent, and transformational projects, and embrace flexibility. Adaptive strategies ensure continuity while capturing new opportunities during uncertain conditions.
About the Author:
Shawn Kanungo is a globally recognized disruption strategist and keynote speaker who helps organizations adapt to change and leverage disruptive thinking. Named one of the "Best New Speakers" by the National Speakers Bureau, Shawn has spoken at some of the world's most innovative organizations, including IBM, Walmart, and 3M. His expertise in digital disruption strategies helps leaders navigate transformation and build resilience in an increasingly uncertain business environment.