Investing in innovation isn’t just about sourcing new solutions or adopting the latest technology trends. A successful sports innovator understands the challenges facing their organization and has the foresight to identify the opportunities, capabilities, and technologies being shaped by evolving market dynamics, changing consumer habits, and shifts in the high-performance landscape; factors which could have significant implications for the future of their business.

By inviting new voices and fresh ideas into the conversation, organizations that foster a culture of entrepreneurial collaboration can either avoid disruptions to performance and productivity during periods of change or generate new revenue streams by leveraging innovation as a competitive advantage. Furthermore, those which sought outside counsel when it comes to innovation are more likely to become the industry’s disruptors, taking on the role of shaping the sporting landscape and deciding how the game should be played.

The pressure to adapt in the sports industry is palpable; rights holders globally recognize their innovation imperative – yet some do not own the relevant resources for producing sustainable innovation that delivers tangible growth. Sports properties are not the only ones facing this conundrum. In the UK, for example, research shows a decline in innovation rates of smaller companies across multiple sectors, whereas larger firms are twice as likely to seek external advice to better understand their innovation needs. 

Elsewhere, a survey of global executives, published by McKinsey in February 2025, cited an organization’s “ability to innovate” as its greatest asset for maintaining a competitive edge, with healthcare (61 percent), automotive (46 percent), energy (44 percent), and high-tech (41 percent) industries placing a higher emphasis on innovation as a strategic factor for generating growth, compared to other sectors.

One of the key barriers to innovation in sports lies in an organization’s readiness to innovate, which can manifest across several dimensions. Leadership may not fully understand which areas of the business require attention or lack clearly defined innovation responsibilities, while being overly focused on market trends can lead to innovating for innovation’s sake without first identifying the specific challenges that need to be addressed. 

Many organizations also lack the proper processes and structures to systematically source, evaluate, and adopt innovations effectively. In addition, the absence of clear strategies, stakeholder engagement, and internal momentum can prevent innovative actions from translating into tangible results and measurable impact. Finally, innovation initiatives often fail when the specific business units or departments affected are not actively involved in planning, execution, and adoption. Overcoming these barriers requires a coordinated approach across leadership, processes, strategy, and engagement to ensure that innovation delivers real, measurable value rather than isolated experiments.

Challenge-driven innovation (CDI) is an open innovation strategic approach that flips the script by enabling sports organizations to identify and assess the challenges standing in the way of their objectives, while also engaging with entrepreneurs and external stakeholders from the world’s fastest-moving markets who are best positioned to provide solutions.

Depending on the organization’s maturity stage and the specific challenges identified, CDI can involve different mechanisms, either separately or simultaneously. In early stages, this may include discovery programs such as hackathons, startup competitions, or other initiatives designed to broaden the organization’s search for expert solution providers, uncover promising technologies, and identify talent to address the challenges at hand. This multi-layered approach ensures that innovation efforts are both targeted and scalable, delivering tangible impact aligned with the organization’s strategy and objectives.

At later stages, where the focus shifts to testing, adopting, and ultimately scaling candidate solutions, sports organizations may leverage venture-client models. These involve engaging one or a consortium of companies to collaboratively address internal challenges. While hackathons are effective for generating a broad range of potential solutions through intensive creative exercises over a short period, serving as a divergence strategy, venture-client approaches emphasize convergence, enabling the organization to invest in and develop selected solutions.

By building and executing the right strategy, combining early-stage discovery programs with later-stage venture-client engagement, sports organizations can create a sustainable innovation pipeline that addresses immediate challenges while delivering solutions at the speed and scale required to generate a lasting competitive advantage.

“In today’s fast-paced world, sports properties need to innovate constantly to develop new knowledge and to maintain their competitiveness,” explains Jordi Ferré, N3XT Sports’ Innovation Senior Consultant. “Nowadays, challenge-driven innovation is one way to achieve this and begins with clearly identifying an issue or problem within an organization, before leveraging the best solutions provider on the market. 

“This is in contrast with older innovation models that relied solely on internal engineering resources,” Jordi goes on. “By re-writing the approach to innovation and encouraging sports properties to engage with broader industry, challenge-driven processes allow them to manage solutions simultaneously, while also turning their brand into a bona fide innovation platform for developing the next generation of technologies and frameworks that will transform the sector.”

Whereas sports properties were once considered to be closed books when it came to innovation, whereby rights holders kept innovation in-house and oftentimes confidential, by opening their doors to new innovation-led partnerships, they have found that consultation with external solutions providers helps diagnose a problem much more quickly and that collaboration is the cornerstone of building an innovation culture.

By way of example, the US Olympic and Paralympic Committee (USOPC) took a novel approach to innovation in the build-up to the Rio de Janeiro 2016 Olympic and Paralympic Games, which saw several of its national sports bodies seek new ways to improve athlete performance. Among them, USA Cycling invited a consortium of technology companies to contribute ideas to the federation’s dedicated vendor portal for developing a telemetric system capable of tracking athlete-training metrics in real-time and providing instantaneous feedback which would give them a competitive edge.

Leveraging its partnership with cloud and analytics technology provider IBM, the process helped the US Women’s Team Pursuit Cycling address its challenge of turning athlete data into a competitive advantage. By increasing the speed at which athlete data is made available to the team, and its ability to process information in real-time, coaches were able to provide feedback to riders immediately after training sessions, as part of a renewed performance-data strategy designed to optimize race tactics and maximize track times.

“Technological implementation, for example, requires different phases of testing, refinement, maturing, and then deployment in order to be successful,” Jordi says. “By engaging a consortium of vendors to give input on a specific problem, CDI of this kind provides a ‘win-win’ for all stakeholders, helping sports properties to onboard some of the brightest people in their field and provide a platform for entrepreneurs to leverage their brand and knowledge. 

“The structure of collaborations can be varied and creative, maximizing impact for all parties involved. This can range from value-in-kind (VIK) arrangements, where the organization provides access to assets such as athletes, facilities, employees, partners, or its brand, to value-in-media (VIM) agreements, which offer the solution provider access to brand and media assets. It can also include collaborative or joint developments to create specific intellectual property (IP), or acting as the organization’s first paying client through a venture-client model. These approaches can be applied across all business verticals, including athlete performance and recovery, data analysis, fan engagement, sponsorship, among others.”