Innovation isn’t just a competitive advantage—it’s a survival skill. But who should be in charge of transforming organizations into thriving innovation hubs? 

I spoke with Dr. Alex Osterwalder, the renowned inventor of the Business Model Canvas and Value Proposition Design and CEO of Strategyzer, who shared a compelling vision for fostering innovation within organizations and how HR can overcome challenges to lead the charge.

Alex is one of the world’s most influential strategy and innovation experts. A leading author, entrepreneur, and in-demand speaker, his work has changed how established companies do business and how new ventures start. 

Ranked among the top 10 leading 50 management thinkers worldwide and a visiting professor at IMD, he is known for simplifying the strategy development process and turning complex concepts into digestible visual models. 

Why Innovation in Companies is Crucial, Now More Than Ever

“Innovation is no longer a competitive advantage; it’s a survival skill,” Alex asserts when discussing the evolving demands on modern companies. 

He highlights that the rapid pace of technological change, market disruptions, and shifting customer expectations leave no room for complacency. What’s getting in the way of rethinking business models isn’t the tools or frameworks—it’s the ingrained habits of organizations resistant to change.

In a world where two-thirds of CEOs say their business is significantly disrupted, Alex believes innovation is the only way to stay ahead​. He stresses the need for companies to balance exploiting their current strengths with exploring new opportunities.

And it’s not completely against the nature of companies, even though it seems like that. 

Every large company used to be a startup; they’ve just forgotten how to think like one. By embedding innovation into the core of their strategy and dedicating leadership time to it, companies can not only adapt but thrive in an unpredictable future​.

Ultimately, Alex argues that companies that fail to innovate will inevitably face irrelevance. It’s not about avoiding disruption but creating it on your terms.

Innovation Isn’t a Department or Function

But, Alex says, “Innovation is not just a department or a function—it’s the engine that drives long-term growth and resilience.” He believes companies must view innovation as a strategic necessity rather than an optional initiative. 

This is about creating new value, not just tweaking the old. 

Alex says the best starting point is clarity: identifying where innovation can have the highest impact. This is why companies should “Start small, but start smart” and use tools like the Business Model Canvas to map out opportunities and focus on quick, iterative experiments to learn what works. 

Without a deliberate and structured approach, innovation becomes a buzzword instead of a driver of transformation.

He also highlights the importance of the CEO being 100% behind any innovation effort. True innovation requires time, resources, and other investments, that the business needs to explicitly choose to invest.

How HR Can’t – and Can – Drive Innovation 

This also means bad news for HR.

As the founder of Strategyzer points out, true innovation rarely emerges from HR unless it has the direct sponsorship of the CEO. 

While many of our readers are highly innovative HR leaders, many HR departments are still focused on keeping the existing business running, not on innovation. 

He stresses that HR teams need to shift from operational roles to strategic enablers by piloting innovation projects within their own departments. “You can't expect the organization to transform if HR isn't modeling the behavior itself.”

One role Alex does see for HR is in helping an inspired CEO create the culture needed for innovation. Culture is the operating system of an organization, and strategy is the app—it won't run without alignment. 

For HR leaders, he suggests ensuring cultural initiatives resonate with the broader organizational goals. Start small, and find the blockers in the culture that prevent innovation, and address those with pilot projects that make change tangible.

HR Leaders: Build Capabilities to Disrupt Before Getting Disrupted

Innovative HR leaders should take the opportunity that the disruptions like AI and hybrid work of 2025 provide.

HR needs to be more than a support function; it should be the driver of transformation with dedicated roles for innovation. 

Speaking to Alex reminds me that the future of HR is about building capabilities that make organizations invincible.