Building and Sustaining the Sources of INNOVATION: An interview with Dorothy Leonard

Why has innovation become such an important part of strategy development? D.L.: I believe there are several reasons. The first is that strategic planning has failed us in the current environment. We've begun to realize how difficult, if not impossible, it is to do strategic planning in the traditional sense. Companies can no longer plan five or ten years out because of the volatility of the environment, and so they have begun to look at their distinctive capabilities as important assets to be mined for new strategic directions. The concept of a firm having distinctive capabilities goes back a long way, but recently it has become more important to identify these capabilities and to build on them for future success.