This paper proposes that strategy activity is the most necessary form of and foundation for innovation. It is also the real context for any innovation effort that is intended to create competitive advantage, especially in response to three key strategic issues construction industry; changing client demands for value, partnering, and supply integration. Innovation is the profitable exploitation of ideas. Clearly, this requires two things a source of ideas that can lend themselves to profitable exploitation and a goal in pursuit which to exploit the ideas. Those goals are established and met by strategic innovation. The right strategy tools can motivate ideas and insight. However, elements of normal industry practice constitute strong demotivators to profitable strategic innovation, hence the presence of strategy activities noted in the industry. This paper discusses the development of the strategic management discourse and to identify tools for use in construction industry innovation that relate to its strategic challenges; the Value Chain, Game Theory and Delphi Technique. The paper also identifies the process of “Bricolage”, potentially a fourth tool, or process, which could be a source hard to imitate advantage in developing strategic innovation practices which act catalyst for participation and the means to profitably exploit new ideas. With strategically‐oriented innovation, a firm can identify and create new value for its customers and integrate its supply chains. Without it, innovation is at best blind, at worst, will never happen; there no goal to exploit the idea in pursuit of. Without strategy, there is no motivation to innovate.
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