The Four Zones of Innovation Management

An effective framework for managing innovation within established enterprises comprises four distinct zones: performance, productivity, incubation, and transformation. The performance zone focuses on the core business, primarily measured through financial metrics, ensuring organizations deliver their primary value. Complementing this is the productivity zone, which encompasses essential support functions like finance and HR, typically utilizing a significant portion of the budget. The incubation zone, geared towards disruptive innovation, should be managed like a venture capital operation, ensuring that projects are funded based on milestones, while the transformation zone addresses the inevitable need for change when new innovations significantly alter the marketplace.