INTHEBLACK July 2026 - Magazine - Page 40
F E AT U R E
“[Organisations] fail because they lack measurement
architecture that will force decisions when push comes
to shove; where capital is reallocated, initiatives are
stopped and successful bets are scaled.”
KAUSHIKA JAYALATH CPA, ORACLE
But the time horizon for innovation now
has to be shorter,” he says.
When it comes to funding, more
is not always better. The right level
of innovation investment depends
on both industry segment and
market dynamics.
“A lot of organisations in
stagnant markets have a lower
percentage [of innovation
investment], which is
unfortunate. They are
trying to use innovation
to cut cost or increase
operational efficiency,”
Locandro says.
His advice
for finance
and business
leaders is
to broaden
their risk
appetite.
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40 INTHEBLACK July 2026
This means being willing to put real seed
capital into innovation and accept a high
failure rate as normal. “Some of the most
successful Fortune 500 companies, their
risk appetite allows for it, so if only one
in 10 ideas go through, that is fine.”
When considering the overall impact
of innovation efforts, it is necessary to look
beyond narrow financial risk.
“Strategic metrics are the ability of the
business to pivot and the ability to remain
competitive, which do not get taken into
account in a Net Present Value or Discounted
Cash Flow analysis,” Locandro says.
THE POTENTIAL OF AI
There is now another factor changing the
innovation equation: AI. Organisations are
seeing value from their AI investments,
but CFOs and CIOs often pull in different
directions, which creates gaps in enterprise
value, according to Deloitte’s 2025 Tech
Value Survey.
While AI has a lot of potential, a narrow
focus on ROI and short-term wins risks
a longer-term strategic advantage,
Deloitte warns.
Locandro agrees that AI offers speed,
tactical wins and lowers the barriers to entry
and cost of innovation activity, but he worries
about the trade-offs. AI could crowd out the
appetite and capacity for larger, long-horizon
transformational projects that need
significant capital and time, he says.
No matter how fantastic an innovation
program looks, Locandro says it should
ultimately be judged on what it has
delivered to the business.
“At the end of the year,
the question has to be: how
many initiatives were adopted
and what did it do to the
bottom line?” ■
