Exploitation Across Different Innovation Horizons

by Paul Hobcraft

This is the fifth and final blog within the Three Horizon series.

Nobody said innovation was easy and I was certainly reminded of that recently. Innovation can be, without doubt, fairly complicated in larger organizations to manage. What must not be forgotten is that we must manage the innovation activities across all the three horizons of innovation and that may on first glance make you believe this adds even more complexity. It doesn’t, it is the opposite.

When you have to handle all the conflicting, competing demands placed within the innovation system by different ‘fractions’ it can sometimes become impossible. This framework helps reduce complexity and focused management attention on the places that need resolving. For the innovation teams involved in these multiple tasks, getting this balance right and also trying to justify further support to keep all the activities progressing on time, is tough, very tough. Using the three horizons as the communicating tool will help focus attention on where the possible issues lie.

Adopting the framework across the organizations offers a roadmap approach

Adopting the three horizon approach helps. Each of the innovation horizons can demand different management’s attention for allocation, response and focus.  We have discussed in the series of previous blogs the many differences within the Three Horizons. H1 represents the company’s core businesses today; H2 includes the rising stars of the company that will, over time, become new core businesses, whereas H3 consists of nascent business ideas and opportunities that could be future growth engines. The framework can become the innovation roadmap taking you from the present into the future.

If you have missed the previous blogs on the three horizon frameowkr then do go back into the series for a deeper explanation of its emerging value.

Dual needs are often conflicting

How often do you face the real difficulties of striking the right balance between those dual needs of meeting what is important to service in today’s business, for short-term performance and targets, along with the other critical aspect of pushing the future performance if innovation concepts into the next horizons of innovation? Those future horizons that offer the stepping stones for the new concepts and ideas that eventually lay down the expected foundations for your continued growth.

What we have to remind ourselves is that each Horizon needs different mindsets. H3 is really different to how we are managing innovation in the current system and has often very different people participating within its construct. For example H3 is more motivated by vision, value and beliefs (think Steve Jobs here on how this pushed him and Apple). The H2 mindset is more an entrepreneurial mindset, attempting to anticipate changing values, detect shifts in the market place and as these become clearer they can lead you into the H3 world.

Managing the different tensions, adjusting the mindsets

There are real tensions often found within teams as they grapple with the different three horizons becomes apparent. Even though H1 is managing the today, different members of the team has different views but in sometimes drawn out discussions a prevailing view emerges. The H2 discussions have far more of a need to be adaptive, you are shifting as new information emerges and this gives new values and opportunities if you remain open to it. This is the toughest zone to manage as it brings out greater uncertainly and conflict. This has been called the ‘space of transition’ where you get clashes within teams on the suitable paths.

H3 you can say is sometimes regarded as marginal in its positioning as seen today but these are creating the viable future. You are not being resolved it in the present time but you are beginning to have a necessary focus and allocate resources. Often if it is not immediate to your needs that can be hard for some to relate too. H3 does need as much leadership engagement to focus upon but needs different ‘shaping’ techniques to begin to ‘see’ the possible future. Then as thinking ‘connects’ you allow specialised resources to then explore and gather deeper insights and understanding. This work becomes very much more future-orientated and often the engineers, scientists and designers can initially struggle here as it is not tangible, lacks ‘hard’ data and still to incoherent to them. To help on this some storyboard of different views of the future, so they can ‘step in’ and relate better can be immensely helpful in the necessary connecting and relating.

Managing across the different horizons really places a complexity for constantly juggling and balancing out different sets of high-yielding performances, often from the same team searching for future yielding activities alongside current work. To help we need to have a much clearer understanding on the aspects that make up the different thinking through activities within innovation management to reduce unnecessary tensions and bringing a one set mindset and trying to  apply this across the different horizons.

Grouping the necessary activities

Here I’ve attempted to group into what I feel are the four critical focal attributes and their activities that are needed to be managed, planned out and pursue across the innovation three horizon mix to deliver on the innovation expected . These need a fairly advanced organization structure to be managed effectively.

There are four critical activities to balance out across the three innovation time horizons.

  1. Strategic planning, portfolio management to manage the growth management pressures so you can allocate the resources appropriately to the tasks and needs. You need to look at this ‘working through’ as more evolutionary as knowledge changes, so you have to adjust accordingly.
  2. Project productivity, execution and disciplines to drive the system to each of the different horizons goals are different to achieve a robust framework.
  3. Managing relationships, increasing more through connecting to external sources for open innovation. Becoming more comfortable with working and sharing on different emerging new platform requires management techniques and collaborations that might be different. Using the three horizons can provide a great place to base the conversations around.
  4. Securing, anchoring and developing the talent to deliver the innovation needed in each of the horizons needs a real mix of contributions. Execution is clearly different from exploration, discovery or working through detailed, systematic investigations.

These four activities are not so easy to work on simultaneously, it needs some deeper thinking through and management skills to balance the many conflicting pressures found within the innovation system to fit your circumstances.

Here I just discuss the concepts and activities within each to trigger your thinking. These need to be thought through individually by each organization to balance out which is not an easy task, often not as well-considered by external observers or advisors as they should be.

  • Strategic planning, portfolio management

The balances here are focused more on evaluating emerging opportunities; ensuring portfolio consistency and demonstrating where the portfolio returns lie. Then strategically and tactically working to exploit and combine any cross-over projects, updating on a constant on-going prioritization the impact of the different growth platforms, and finally monitoring the activities that are working themselves through the innovation system for communicating their changing value.

  • Project productivity and execution

Here the focus is far more on the disciplines within the system. The optimization and appropriate allocation of the necessary resources for embedding project management disciplines, demonstrating constantly the validity of what you are doing, reducing rework, demonstrating the value of the activity to meet the required end result going through the innovation pipeline.

There is a growing need is to build up clear prototyping and scaling techniques, plan to ‘inject’ dedicated specialists into projects to drive and offer appropriate advise where needed and be constantly ready to show viability from the work progressing through the pipeline . Finally, there is the need to find the right balance between customization and standardization techniques to provide the optimum yield from these activities.

  • Management across external and internal relationships is complex.

More and more open innovation seen as accelerating the innovation activities is placing a real increase on the demands for exploiting and promoting different collaborations platforms. As there is an increasing need to attract different partners for working across often very diverse platforms this is placing increasing demand in the management of a complex set of dynamics across new and ever-changing relationships with outside parties.

There is a need to explore different techniques here that involve discovery syndicates, venture networks, deployment of absorption teams and seeking out a range of idea and technology sourcing networks to feed into the internal organizations process and systems. Each plays its part in providing focus and exploring new yields to accelerate the innovation activities.

  • Managing the talent needed for innovation

Firstly securing, then anchoring and developing the diverse range of skills required to manage in a complex innovation system is increasing hard to complete. Not only do you have to map out workforce supply and demand, analysis and account for many different career preferences to meet personal circumstances, you have to leverage the skills across different needs and these three horizons. The growing importance of sharing knowledge, both tacit and explicit, that can be fully absorbed and exploited requires an absorptive capacity structure http://tinyurl.com/crtdv86 needs consistent attention and re-fuelling.

Four aspects  of ‘knowledge growing’ that offer increasing value are: a) developing up a system for assessing the impact analysis of where resources can offer the best return, b) exploring where you can work to improving faster cycle times, c) building technology and knowledge libraries, and finally d) exploring different portfolio scenarios These all are in need to be simultaneously developed and exploited for growing and managing knowledge.

Lastly in this section, the structuring of effective teams always needs that consistent attention. We need the ability to constantly build up the competencies and capacity for more ‘responsive’ and deepening of innovation skills. These different skill sets are increasingly required to meet the changing innovation activities that are expected over the complete innovation development life cycle, where fresh discoveries are always occurring and you can reposition resources to capitalize on these ‘breaking’ opportunities.

How are you managing across these four? If not, should you?

Each of these four critical attributes is certainly placing increased demand on those that are managing within the innovation system. It requires for some advanced planning and attention within the management of innovation. Of course this grows in complexity by the size of organizations innovation activities and need.

Recognizing each of these four and being able to balance the often conflicting demands across different innovation horizons and competing for scarce resources within organizations is far from easy. It needs dedicated focus within innovation management.

Focusing on higher-yielding innovation

How are you tackling this complex need for different high-yielding management within innovation? This is not an easy task and sometimes we external commentators forget when we keep layering on more ’timely’ advice and poking around with our innovation sticks. It is always very different when you are in the ‘eye of the storm’ than being the observer.

Certainly a ‘tip of the hat’ to those that manage within this complexity, it is not easy to balance out all the competing, often relentless demands placed on innovation’s exploitation needed across the three different horizons.

Managing innovation requires an awful lot of dedicated work to do well. It is complex but to frame your innovation activities across the Three Horizon Framework helps unite often opposing views and allows for more mature, reflective thinking in the area that offers the future ‘wealth’ of the organization. It needs managing as well as we can.

You need to exploit innovation across all options and avenues open to you and it needs an evolutionary way to manage this.

Thanks to the Research & Technology Executive Council for their past benchmarking in these suggested activity areas.

image credit: abduzeedo.com

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Paul HobcraftPaul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.