Innovation Ambition Matrix
The Innovation Ambition Matrix is a strategic tool designed to help teams map out their innovation initiatives across three levels: core, adjacent, and transformational. Use this method to clarify project ambitions, align team efforts, and ensure a balanced innovation strategy.
Facilitation script
- 1
Draw the graph on a large whiteboard: X-axis 'How to Win' (novelty of the product), Y-axis 'Where to Play' (novelty of the market). Draw the three curves dividing it into core, adjacent, and transformational bands, and define each band with one concrete example.
10 min - 2
Hand out sticky notes and pens. Each participant silently writes down the current initiatives they know of, one per note.
10 min - 3
Go around the room: each person places their notes on the matrix and explains each placement in one sentence.
15 min - 4
Open the discussion: challenge placements, move notes the group disagrees on, and merge duplicate or competing initiatives into single notes.
15 min - 5
Step back and read the shape of the portfolio together: where do initiatives cluster, and which band is empty? Use the 70-20-10 core/adjacent/transformational split as a reference point for the conversation, not a quota.
10 min - 6
Agree concrete follow-ups — initiatives to stop, merge, or start — and assign a named owner to each action before closing.
10 min
Tips
Ensure participants understand the definitions of core, adjacent, and transformational innovations before starting.
Encourage open discussion to surface different perspectives and eliminate competing initiatives.
Assign clear responsibilities to team members for follow-up actions.
Common pitfalls
Skipping the definitions of core, adjacent, and transformational up front — the group spends the placement round arguing about band boundaries instead of initiatives
Everything lands in the core band and the group concludes 'we're balanced enough' instead of confronting the empty transformational space
Treating the 70-20-10 reference ratio as a target and mechanically reshuffling notes to hit it, rather than debating what mix the strategy actually needs
Letting each initiative's sponsor defend its placement — notes get positioned to flatter the project rather than describe it; have someone else place contested items
Ending at the finished map with no owners or follow-up actions, so the poster becomes wall art and the portfolio stays exactly as it was
Variations
This method can be adapted for remote teams using digital tools like Miro or Mural to create the matrix online. You can also use this approach for long-term strategic planning by focusing on future innovation ambitions.
Where it fits
When to use it
A quarterly or annual portfolio review where leadership suspects the innovation pipeline has drifted toward purely incremental work
A leadership team needs one shared picture of every running initiative before setting strategy or allocating budget
Several teams are running overlapping or competing initiatives and the duplication needs to be surfaced and consolidated
After an ideation round, to see where new concepts land relative to the existing business before committing resources
Preparing a long-term strategic plan and you want to debate future innovation ambitions, not just current projects
When not to use it
You need to evaluate a single initiative in depth — a Business Model Canvas gives you the detail the matrix deliberately strips away
The group cannot list its current initiatives from memory — compile a project inventory first, or the map will be built on guesses
You are still generating ideas — the matrix classifies initiatives, it does not create them; run a brainstorming method first
The people with authority to stop, merge, or fund initiatives are not in the room — mapping without a mandate to rebalance breeds cynicism
The group is much larger than 8 — placement discussions stall; split into parallel groups and merge the maps afterwards
Frequently asked questions
What is the Innovation Ambition Matrix?▾
The Innovation Ambition Matrix is a strategic mapping tool that plots a company's innovation initiatives on two axes — 'Where to Play' (novelty of the market) and 'How to Win' (novelty of the product) — dividing the portfolio into three ambition levels: core, adjacent, and transformational. Popularized by Bansi Nagji and Geoff Tuff in a 2012 Harvard Business Review article, it is used in workshops to reveal whether an innovation portfolio is balanced or skewed toward incremental work.
What do core, adjacent, and transformational innovation mean?▾
Core innovation optimizes existing products for existing customers — incremental improvements close to today's business. Adjacent innovation expands into markets or offerings that are new to the company but not new to the world. Transformational innovation creates breakthrough offerings for markets that do not yet exist. On the matrix, initiatives move from core to transformational as both market and product novelty increase.
What is the ideal balance between core, adjacent, and transformational innovation?▾
Nagji and Tuff's research found that high-performing companies allocated roughly 70% of innovation investment to core, 20% to adjacent, and 10% to transformational initiatives — while returns tended to follow the inverse pattern, with transformational bets driving an outsized share. Treat 70-20-10 as a reference point for discussion, not a quota: the right mix depends on your industry, competitive position, and appetite for risk.
How do you run an Innovation Ambition Matrix workshop?▾
With 5-8 people and about 60-90 minutes: draw the two-axis graph ('How to Win' vs 'Where to Play'), divide it into core, adjacent, and transformational bands, and define each band. Participants write current initiatives on sticky notes and place them on the matrix, then the group discusses placements, merges competing initiatives, reads the overall balance, and agrees follow-up actions with named owners.
How is the Innovation Ambition Matrix different from the Three Horizons model?▾
The Innovation Ambition Matrix classifies initiatives by degree of novelty today — how new the market and the product are relative to the existing business. The McKinsey Three Horizons model organizes growth by time and maturity: defending the current business, building emerging businesses, and seeding future options. Use the Ambition Matrix to audit portfolio balance in a workshop; use Three Horizons to sequence investment over time.
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