Inside nearly every corporation, there’s a team tasked with "innovation." They’re charged with finding the future: exploring new business models, technologies, and customer needs that could drive the next wave of growth.

But talk to innovation leaders, and a familiar pattern emerges:

A cycle of hope, confusion, pressure, and collapse.

The corporate innovation function, it turns out, has a lifecycle. And while the timing varies (some last five years, some less), the arc is remarkably consistent. Let’s break it down.

The Innovation Lifecycle

The Beginning: A Mandate for the New

Innovation efforts often begin with a change in leadership or a refreshed corporate strategy:

• A new CEO arrives with a mandate for transformation.
• "Growth beyond the core" becomes the rallying cry.
• An innovation team is born — sometimes inside strategy, sometimes as a standalone function.

But from the start, the mission is often murky:

• Where should they look for innovation?
• Who decides what’s in or out of scope?
• Who owns the work when it’s done?

In the absence of clear answers, the innovation team spins up a broad set of explorations.

They have lots of energy but little traction.

The Middle: The Squeeze

After a year or two, the pressure mounts. Business leaders ask, "What have you actually built?"

Budgets are scrutinized. The team chases quick wins, hoping for something that looks like progress — but internal resistance grows. Core business units are skeptical. Strategy and Corp Dev teams become distant.

The team becomes reactive. The portfolio gets thinner. And morale dips.

This stage is mired by cynicism — which is heartbreaking, when you remember the mission of the innovation team is rooted in growth and improvement. People are doing their jobs to the best of their abilities, but it is insufficient to overcome strategic and structural disadvantages.

The End: Absorption and Attrition

Eventually, there's a cost-cutting moment — a tough quarter, an activist investor, a leadership change. The innovation team gets de-prioritized. Staff are reassigned to business units. Projects are quietly shelved.

Leaders start to leave. The flame goes out.

It feels like so many innovation teams are in this stage of the lifecycle right now. Macro forces are compounding the already difficult position they have been in.

During this stage, it can feel like all hope is lost.

And Then … Rebirth

A year or two later, a new executive arrives with a familiar question: "Where’s our next growth engine?"

And the cycle begins again. Corporate innovation, after all, is too important to disappear. It just doesn’t always know how to live inside the organization that needs it most.

How to Build an Innovation Function That Lasts

This cycle is not inevitable. But it requires a shift — from treating innovation as a "creative silo," to managing innovation as a strategic, cross-functional capability.

Here's how the most resilient corporate innovation functions are starting to operate:

1) Anchor Innovation to Strategy

Innovation teams should not float free.

Their priorities must be directly tied to corporate strategy — and often sit as a sub-function of the strategy team itself. Think of innovation as the portfolio of bets that explore what's next for the company.

Every project should trace back to a strategic theme, a future customer need, or a market shift the company has decided to pursue. And that portfolio must be managed: initiatives at different stages, with different risk profiles and different paths to scale.

2) Build Bridges Across the Org

An isolated innovation team is a dead innovation team.

To survive, innovation needs champions inside the business. Each initiative should have a senior sponsor who can advocate, challenge, and eventually help absorb or scale the effort. Likewise, clear touchpoints with Corp Dev, Product/R&D, and Strategy functions ensure continuity and relevance.

Don’t be afraid to define boundaries. For example:

"Innovation owns early exploration for innovation directly linked to existing products or services; the business unit owns actual implementation."

Clarity beats control, and focus is not the enemy of innovation.

I go into depth on this a little more in a recent Advantaged podcast episode:

3) Define Clear Lanes and Limits

One of the biggest sources of confusion? Innovation teams trying to do everything:

• Are you making incremental improvements to core offerings?
• Exploring entirely new revenue models?
• Experimenting in white space?

The answer can’t be yes to all three. Define where your team plays — and where it doesn’t. Your success depends on knowing the difference between improving the core and building the future.

4) Partner Where Capabilities Are Thin

No innovation team can (or should) do it all alone. Whether you're missing technical depth, external market reach, or entrepreneurial capacity, know when to partner.

That’s where a venture builder like Alloy Partners come in.

We're not a silver bullet. But we are designed to help innovation and strategy teams take on the hard stuff: building new companies, in new markets, with real speed.

We help teams go from a strategic problem to a live, independently operating startup, purpose-built to create value for the company and the market. It’s a complement, not a replacement.

And it’s often the difference between ideas that stall in committee and ventures that make it to market.

Innovation Is a System — Design It Like One

Innovation isn’t dead. But, in many companies, it’s not fully alive either. It drifts. It stalls.

It survives until the next reorg.

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At my previous firm, Innosight, we would talk about innovation's "zombie projects": internal efforts that stumbled along, barely alive, but not quite dead.

What is even worse is a "zombie function": an entire team of well-intentioned, eager innovators trying their best to help their company with few advocates.

The good news? That’s changing. The next wave of innovation teams are behaving differently.

They’re tighter to strategy, closer to business units, clearer on their scope, and bolder in their partnerships. They know the lifecycle and are designing for durability.

The phoenix always rises. But what if, this time, it didn’t have to burn first?