No CEO, in my experience, has ever questioned the need to innovate. The development of new ideas, products, services, and ways of doing business is, after all, an engine of renewal and competitive advantage. What often does go unchallenged, though, are the compromises that come with innovation: cost, delay, and high failure rates.

The question CEOs must ask, therefore, is not whether they need to innovate—but how they can conquer the traditional tradeoffs they’ve come to accept as the price of innovation.

That question is growing more pressing by the day. With aggregate growth rates trending down and capital dearer, experimentation is no longer a free lunch. And with volatility and uncertainty continuing to intensify, new scenarios can take shape overnight that rapidly erode the base case for an innovation project. At the same time, digital and AI technologies are making it much easier for competitors to imitate a winning product or service, adding greater urgency to innovate not just quickly and frequently, but efficiently.

Together, these forces compel CEOs to innovate faster and smarter, but in a business environment that is more difficult and fraught with risk.

Fortunately, leaders can take a better approach to innovation—one that not only addresses the traditional tradeoffs but also unlocks a wealth of benefits for their company and their customers. Here’s how.