If business leaders want their companies to survive and thrive, they must change with the times. The late business consultant Peter Drucker was so convinced this was true that he coined the phrase, “Innovate or die.” To that end, most large companies have a process in place that helps them innovate to meet changing conditions. Having an institutionalized process is a good idea. It brings creative people, strategies, and funding together — all necessary ingredients for innovation to blossom. The most creative people, however, are open to surprises. Digital marketer John Valentine explains, “While many breakthroughs are the product of deliberate research and careful experimentation, serendipity plays a significant role in scientific and technological advancements. When researchers are open to the unexpected, they often stumble upon discoveries that revolutionize industries, technologies, and our understanding of the world.”[1]

Business consultant Martin Rudolf explains that too many people see innovation as an either/or proposition — “the result of either meticulous planning or sheer luck.”[2] He agrees with Valentine that serendipity has played a role in many breakthroughs. He argues, however, that most “happy accidents” occur when the right minds are placed in the right conditions to recognize eureka moments. He writes, “A prepared mind, open to recognizing new possibilities, is crucial for turning the unexpected into a breakthrough. In other words, serendipity emerges at the intersection of happenstance and readiness: although the spark may be accidental, the ability to see potential in that spark is what truly transforms it into innovation.”

Embracing Serendipity

Business strategist Jack Reynolds writes, “At its core, serendipity is the occurrence of events by chance in a happy or beneficial way.”[3] Marketing leader Andrea Cecilia Zuniga Calderon agrees with Rudolf that both chance and intellect play an important role in serendipity discoveries. She observes, “It's no surprise that serendipity — defined as an unexpected discovery or occurrence — is part of innovation. In fact, one could argue that it is a skill. That is why I personally prefer Samantha Coperland’s definition: ‘Serendipity is a category used to describe discoveries that occur at the intersection of chance and wisdom.’”[4]

Christian Busch, a business professor at the USC Marshall School of Business, explains that serendipity seems like a simple concept but how to apply that concept to the innovation process remains elusive. He explains, “Serendipity — the notion of making surprising and valuable discoveries — plays a major role in the success of individuals and organizations alike. Previous research has established the importance of serendipity and identified important individual- and organizational-level antecedents. However, the literature has been dispersed and the boundaries of the concept have been blurry, leading to a lack of conceptual clarity and structure, and thus limiting validity and managerial actionability.”[4] He believes there are three necessary conditions for serendipitous innovation to occur: agency, surprise, and value.

Busch defines agency as the ability of humans to act freely during the innovation process. He identifies a few important human actions, including: acting on existing entities; grasping possibilities; recombining any number of observations; having a prepared mind; exerting individual effort; making discoveries; and taking purposeful action. His definition of surprise includes words like: unintended, unexpected, accidental, chance, unanticipated, and unplanned. Finally, Busch warns, “‘Value’ tends to be in the eye of the beholder, and it can become apparent in the moment the connection is made, or at a later stage.” When it comes to creating value, I like the innovation formula, which is: innovation = new x valuable x realized. Remove any one of those variables and you don’t have a true innovation.

Business model innovator Claude Diderich offers another formula: Innovation = Serendipity + Strategy.[6] He explains, “Serendipity is responsible for the distinct, superior, and novel part of innovation, while strategy ensures that it creates value for its consumers.” Although he embraces serendipity as an important part of innovation, Diderich also understands that some formal processes must be in place. He explains, “Strategy, in the context of innovation, is a plan that transforms ideas into business opportunities. The goal of the strategy part in innovation is ensuring that the invention, typically resulting from serendipity, solves an existing or future problem that customers are faced with and for which they are willing to pay to get it solved. Addressing them requires satisfying a need, alleviating a pain, or creating a gain, and allowing the firm offering the solution to appropriate value.” He goes on to explain that an innovation strategy comprises four key aspects:

1. An existing or future problem or challenge to address, or job to be done that is aligned with the mission statement of the firm.

2. A process for creating, collecting, evaluating, and prioritizing ideas.

3. An organizational structure, including skills and resources, in which an innovation can grow into a successful product or service.

4. A framework for assessing value, both for the consumer and the firm.

Diderich’s thinking is line with that of the late Albert Einstein who once stated, “Innovation is not the product of logical thought, although the result is tied to logical structure.” Henry Doss, CEO of Advisor Controls, also believes that in order to capture value, some structure must exist. He explains, “Innovation is not linear, but harvesting the value created by innovation is.”[7] Doss also recognizes another truth about innovation processes: failures are inevitable. He writes, “In highly innovative ecosystems, failure is a commonplace because risk is high and transactions are frequent.” Nevertheless, he is not a big fan of “failing fast and failing often.” He explains, “The only thing that will certainly follow the tactic of more failure will be more failure. And failure is neither a goal nor a tactic for innovation.”

When failures do occur, however, failing to learn from them is a tragic mistake. Lee Green, an Assistant Vice President for Innovation at the National Association of Manufacturers, reports, “Members of the Innovation Research Interchange (IRI), the National Association of Manufacturers’ innovation division, conducted a study of failure and failed projects within research and development to better understand the benefits of failure. IRI members from Kimberly-Clark, Sonoco and others described brilliant failure as ‘a well-intended and prepared project … that does not achieve its original goal — failing because of something that was not knowable at the time, but providing incredible value to the organization through learning.”[8] “Brilliant failure” is obviously a traveling companion of serendipity.

Concluding Thoughts

One way to foster an environment in which chance and wisdom can operate and where serendipity and brilliant failure can thrive is to create a space that leverages artificial intelligence solutions, like Enterra Business WarGaming™. Business WarGaming enables organizations to leverage their data to make strategic decisions by anticipating the moves of their competitors and taking direct action to beat the competition, mitigate risk, navigate uncertainty, and maximize market opportunity. Part of Enterra Business WarGaming is the Enterra Global Insights and Decision Superiority System™ (EGIDS™) — powered by the Enterra Autonomous Decision Science™ platform — which can help business leaders rapidly explore a multitude of options and scenarios. Exploring numerous scenarios helps discover what works, what doesn’t, and what is surprising.

Footnotes

[1] John Valentine, “The Science of Serendipity: How Unplanned Discoveries Shape Innovation,” Medium, 3 February 2025.

[2] Martin Rudolf, “Serendipity vs. Strategy: Are Breakthrough Innovations Just Happy Accidents?” LinkedIn, 13 March 2025.

[3] Jack Reynolds, “The Role of Serendipity in Innovation,” MorningPools, 21 July 2025.

[4] Christian Busch, “Towards a Theory of Serendipity: A Systematic Review and Conceptualization,” Journal of Management Studies, 13 November 2022.

[5] Andrea Cecilia Zuniga Calderon, “What is the role of serendipity in innovation?” LinkedIn, 14 March 2022.

[6] Claude Diderich, “Innovation = Serendipity + Strategy,” innovate.d Insight, August 2022.

[7] Henry Doss, “Failure Happens: Innovation and Serendipity,” Forbes, 18 February 2013.

[8] Lee Green, “ ‘Brilliant Failure’: Cultivating a Healthy Approach to Risk,” IndustryWeek, 19 October 2025.