Inside the Strategy Room Investing in innovation: A pathway to resilient growth
Dec 17, 2025
In this discussion, Matt Banholzer, Senior Partner at McKinsey, underscores the critical importance of innovation during economic uncertainty. Tim Koller, a Partner at McKinsey, highlights how ownership structures influence long-term innovation strategies. Laura LaBerge, a Senior Expert at McKinsey, reveals that top performers tend to double down on innovation, driving continuous growth. They also explore innovative funding strategies, the pitfalls of poor resource allocation, and the need for bold aspirations in achieving substantial gains.
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Volatility Makes Innovation Essential
- Volatility raises the value of innovation because changing assumptions require new offerings and business models.
- Not acting in volatile times is the riskier choice long-term, not a safe one.
Startups And Shocks Spawn Winners
- Many successful companies began or rewired during recessions or shocks, like firms born in 2007–08 or 2020–21.
- Startups and corporates both often begin with small pilots and scale from there.
Stated Priority Vs. Actual Spending Gap
- Firms report innovation as a top growth driver yet ~60% freeze or cut innovation spending.
- Leading companies still increase spend and use tools like AI selectively to accelerate meaningful differentiation.