An increasingly turbulent environment suggests that the ability to innovate will grow in importance and complexity as innovations themselves become less durable. To overcome this paradox of innovation, boards will have to contend with a second conundrum, the paradox of innovative change, in which the organization's need for innovation is suppressed by those in the hierarchy who are threatened by it.

Central to any firm's survival and prosperity is its ability to adapt. Like any organism, organizations must continuously adapt to their environments or perish. Unlike biological organisms, however, organizational environments include complex social, cultural, economic, regulatory and technological conditions. Each of these conditions not only changes, but also interacts with each other—multiplying the complexity, speed, and volume of change confronting organizations. The result is not just a turbulent environment, but one in which the turbulence itself is accelerating. This acceleration is brought about by innumerable trends, among which globalization, deregulation, and IT are the most obvious ones. Added to these global forces are culturally-specific trends within home and host societies, be it changing expectations of employees and customers or growing inter-generational differences. Against this fast-moving backdrop, mangers are held responsible for results while managing the complexity of changing conditions.

In less turbulent times—with markets and cultures more thoroughly insulated from each other by time, space and differing expectations—reactive strategies to the management of innovation can emerge more leisurely. In today's `flat' and turbulent world, strategies based on reacting to external changes make failure all but inevitable—because reactive strategies (and their implementation) lag the reality of dynamic environments (McAuley, Duberley, Cohen, 2000).

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