Innovation Strategy at Stanley Black & Decker: Setting the Direction for Growth

On July 1, 2022, Don Allan was appointed Chief Executive Officer of Stanley Black & Decker (SBD). Although Allan had been with the firm for 23 years, most recently serving as President and Chief Financial Officer, he recognized that he was stepping into his new role as CEO at a time of turbulence and uncertainty. Allan and SBD had to grapple with the ongoing impact of the COVID-19 pandemic, supply chain disruptions, and runaway inflation, among other challenges. More broadly, there was the sense that these obstacles reflected a shifting paradigm. “There is no normal anymore,” Allan said. “The normal is change.” This case study documents how, over decades, SBD had developed a robust innovation ecosystem with three horizons: (1) Core Innovation—which the company defined as making incremental improvements to existing products or creating new offerings that would drive year-over-year revenue growth; (2) Breakthrough Innovation—creating products that were worth at least $100 million and would substantially transform their markets; and (3) Stanley X—leveraging cutting-edge technology (e.g., software and IoT) to pursue extreme innovation, which SBD defined as products that “reimagine how we operate in today’s technology-enabled, fast-paced world.” The case allows for a discussion of the complexities of managing and growing a large business; 2) the tensions between maintaining a sophisticated innovation capability and profitability; and 3) Don Allen’s decision about whether to pull back on the firm’s pursuit of ‘extreme’ innovation and the impact of doing so on employees, customers, and shareholders.