Innovation Under Pressure: What High Performers Do Differently When Budgets Shrink

Summary:

• Strategic Management: High-performing organizations excel by strategically managing five core areas of innovation performance: strategy, governance, process, resources, and portfolio. They translate their ambitions into actionable investment logic and align their innovation efforts with financial targets.

• Governance and Accountability: Effective governance is key. High performers clarify roles and create accountability, ensuring faster and smarter decisions. They operate with a clearly defined innovation mandate and focus on business-relevant KPIs.

• Process Maturity: High performers use process maturity to build confidence rather than control. They validate assumptions, set clear expectations for project timelines, and make tough decisions quickly to avoid scope creep and ensure measurable outcomes.

• Resource Deployment: Innovation success is not driven by resources but by execution and discipline. High performers embrace metered funding, accelerate timelines when needed, and communicate changes quickly, ensuring efficient use of available resources.

Innovation’s New Reality

Innovation leaders are facing a new operating environment—one where ambitious talk of transformation now competes with tight operational budgets and renewed demands for tangible return on investment. In many organizations, the generous OPEX once earmarked for experimentation and exploration is being scrutinized, reduced, or even frozen altogether.

Yet, in this cost-conscious climate, some companies continue to outperform. They push forward with leaner teams, fewer resources, and sharper focus. How?

According to the newly released 2025 Innovation Performance Benchmark by ITONICS, the answer lies not in how much these organizations invest, but in how strategically and systematically they manage five core areas of innovation performance: strategy, governance, process, resources, and portfolio. The contrast between high and low performers in this benchmark offers a timely playbook for any leader wondering how to do more with less.

Strategy: Where Discipline Starts

The benchmark reveals a familiar yet striking gap: while most organizations have a reasonably clear view of what leadership expects from innovation, few have translated those expectations into actionable investment logic. Nearly three-quarters of respondents say they understand the financial targets innovation is expected to deliver. Yet only 29% can specify how much they should be investing across the three innovation horizons—H1 (core), H2 (adjacencies), and H3 (new business models).

This is where high performers stand apart. They don’t just state their ambition; they translate it into numbers. They use strategic return models to clarify how much to invest in each horizon and to guide portfolio decisions with precision. They also ensure that these models are not confined to innovation teams—they are shared with finance and business unit leaders, building alignment across the organization.

In contrast, low-performing organizations often operate in a fog of intent. Innovation is talked about in visionary terms, but actual investment is reactive or driven by pet projects. Without a quantified view of what success looks like, it’s difficult to commit, prioritize, or measure progress.

Governance: Clarity Over Complexity

Governance is often misunderstood in the innovation space. Too much of it, and innovation becomes bureaucratic; too little, and it becomes chaotic. The ITONICS data suggests that high-performing organizations manage to strike a balance—not by expanding governance layers, but by clarifying roles and creating accountability.

The strongest teams operate with a clearly defined innovation mandate. They know what kind of innovation they own, how it aligns with corporate ambition, and how it’s measured. Their governance structures—typically lean steering boards—meet on a regular cadence, focusing not on activity metrics, but on business-relevant KPIs.

This is in stark contrast to the majority of respondents in the benchmark, where 78% report gaps or overlaps in innovation accountability. In such environments, teams often duplicate effort, decisions are delayed or revisited, and innovation slows down under the weight of its own ambiguity.

High performers, by contrast, understand that clarity creates speed. With clear mandates and focused oversight, they enable faster, smarter decisions—even with fewer resources.

Process: Confidence, Not Complexity

One of the more nuanced findings in the report is the role of process maturity. Innovation teams often default to building overly complex stage-gate models or investing heavily in process frameworks that look impressive but fail to improve outcomes.

The benchmark suggests that high performers do something different. They use process as a means to build confidence, not control. They ensure that, at every stage of the journey—from idea to execution—their teams are increasing the evidence base, validating assumptions, and earning the right to invest further.

These organizations are also much more deliberate about pace. They set expectations for how long projects should take. They track benchmarks and use them to assess progress and identify lagging initiatives. They make tough decisions quickly, often killing or redirecting projects early rather than letting them linger indefinitely.

By contrast, low performers tend to operate on gut instinct. Only 32% of respondents say they make decisions based on collected evidence, and just 20% have established time benchmarks for their innovation projects. The result is predictable: projects drag on, scope creeps, and expected returns evaporate.

Resources: Redefining the Constraint

Perhaps the most surprising insight in the ITONICS report is that resources—long assumed to be the Achilles’ heel of innovation—are not a major performance driver. In fact, the resource dimension scores highest overall in the benchmark, and yet shows minimal correlation with innovation success.

The implication is powerful: innovation failure is not a resource problem. It’s an execution and discipline problem.

High-performing organizations are rigorous in how they deploy the resources they have. They embrace metered funding, releasing resources only when confidence thresholds are met. They accelerate timelines when needed, but without sacrificing scope or quality. And they communicate changes quickly, adjusting course based on real-time learning.

Low performers, by contrast, often rely on throwing more people or money at slow-moving projects. They rarely question whether additional input will change the outcome, and they often mistake resource allocation for progress. But as the data shows, more does not equal better—especially when processes and governance are weak.

Portfolio: The Silent Differentiator

Of all the performance dimensions assessed, portfolio management emerges as the most neglected—and yet, arguably, the most consequential. Only 14% of respondents say they realize the returns they expected from their innovation portfolios. More than 80% admit they miss their return targets, largely because they lack visibility into what’s actually in their pipeline.

High-performing organizations treat their innovation portfolio the way a venture capital firm treats its fund. They track the maturity, value, and risk of each opportunity. They monitor conversion rates along the funnel, from ideation through to scaling. And they use centralized dashboards to make that information available—not just to innovation teams, but to decision-makers across the business.

Low performers, in contrast, often operate blind. Only 3% report having a fully accessible, up-to-date innovation board. Without that visibility, it becomes nearly impossible to allocate capital effectively, prioritize opportunities, or intervene when projects stall.

What makes this particularly urgent in today’s climate is that portfolio clarity allows leaders to make the most of limited budgets. When you can see which opportunities are viable, scalable, and aligned to strategy, you can double down with confidence—or pull back with justification.

The Shift Actions Perspective

What this benchmark confirms—and what we see consistently in our work with corporate clients—is that high innovation performance is not about spending more. It’s about managing better.

It’s about translating vision into investment logic, clarifying roles and responsibilities, building confidence through evidence, using resources with discipline, and managing the portfolio with the transparency of a venture investor.

Organizations that embrace this model will not only survive under current constraints—they’ll outpace their peers. They’ll do more with less because they’ve built systems that turn ambition into action and action into measurable results.

Ready to Rethink Your Innovation Operating Model?

Shift Actions helps innovation and venturing leaders transition from cost centers to performance engines. Our structured approach to innovation strategy, governance design, and portfolio optimization is built for today’s resource-constrained environment.

If you’re looking to sharpen your focus, improve your ROI, and re-earn executive trust, we can help.

Let’s talk.