Value of Managing Innovation Across Three Horizons

by Paul Hobcraft

Value of Managing Innovation across Three HorizonsThis is the second in a series on  the Three Horizon Approach. Previously I gave a short introduction, arguing that we should take a more evolutionary perspective across the entire innovation business portfolio by using this model.

Going beyond that initial introduction- a trilogy of blogs now follows to extend your understanding on this more than valuable approach.

I plan to explore in three simultaneous blogs the three horizon model more extensively, this is the first of these three blogs that builds on the initial one entitled “.

The three horizon framework is valuable to build into your thinking about strategy and innovation.  It places emphasis on where to tackle the different approaches to innovation (incremental, disruptive and radical) and place these within their different timing frames that are often need to manage these successfully across their development cycle. The three horizon framework also allows for greater organizational participation on taking out ‘future thinking’ with different mindsets to visualize a variety of challenges in these various horizons and that has a huge value to work through and frame the activity and resources they will need over different time periods.

The Three Horizons have different focal points of value.

Horizon 1 (H1) in brief

This is the existing business, the one you need to keep your real focus upon, it pays the bills, it gives you the possibilities for tomorrow. The emphasis here in this H1 is you invent, develop and deploy through a clear portfolio of products and services and (hopefully) a robust innovation process. Your aim is to keep extending and defending your core business and this is more though an incremental approach to improve on your existing business. This horizon is the one we are most familiar with.

Horizon 2 (H2) in brief

This horizon 2 ‘feeds’ from horizon 1-much of the core is still wrapped up in this but this is where you often face that ‘point of disruption, that famous innovators dilemma described by Clayton Christensen. It is a view of the things that are beginning to change, to threaten what you have as a core, it is the place where you begin to see change. It is the place were those disruptions can offer emerging new business, others will see, if you don’t.  You certainly need to view this horizon with different metrics of its value and investment as it is often still ‘emerging’ and you need to figure this out and what this means as an impact on your existing core business. The emphasis here in this H2 you need to research, demonstrate and disrupt. To do this you need to certainly ‘ring fence’ this emerging horizon to ensure you are actively working on it in different ways (piloting, prototyping, new business models) and can be ready with possible answers if it comes towards you faster than you initially expected.

Horizon 3 (H3)  in brief.

There are pockets of the future in the present; often these are what some people call ‘weak signals’. These positions will likely change the nature of your industry, they are potentially very radical. It is where there is real possibilities of completely new ways of doing things and this is where the mindset has to be more fluid and adaptable to seeing things in different ways. There will be competing ‘voices’ on these, offering differing values, perspectives and advocacy. This becomes a challenging horizon to manage. The emphasis here in this H3 is you envision, explore and embody. Often there may be no right or wrong to these different views and often they simply cannot be grounded in ‘hard’ evidence but clear scenarios that embrace these different perspectives needs broad discussion and eventually emerging consensus of where to explore and not.

The Three Horizons – visual summary.

The present recognition –a resistance to change – managing with different mindsets.

Langdon Morris has just written a book called “The Innovation Master Plan” and he talks of mindset as the hidden problem of innovation. He suggests most executives lack both experience with innovation and within this a innovation mindset. He views this as the brutal pace of change keeps organizations constantly on the defensive, concentrating on the short term and often they are just reacting and adapting to what comes towards them. The second is often as managers we are consistently working towards ‘managing the business today’, keeping it as best as we can by trying to run it smoothly and crank out what is needed to keep it simply ahead. The issue we need to face is often one that as Langdon mentions is Joseph Schumpter’s view, of ‘creative destruction’, that is happening at ever increasing pace all around us. Management must stop looking backwards to compare events, it must look towards different horizons to see where they need to go and this is a real mindshift to bring about this change. The rear view mirror only tells you who is coming up behind you, not what is ahead of you and that is where you need to focus, to antiscipate, react and respond.

Fixation, Bias and its Consequences

It is this intensive fixation on the incremental, this huge bias on the ‘here and now’ that is creating much of this ‘creative destruction’. You see different reports on C-level’s view that they lack the big breakthroughs and this leads to the innovation deficits that catches so many organizations unaware.

So as Langdon nicely puts this in his book, there are four devious mindset traps of 1) fixation on the status quo , 2) short term thinking dominates at the expense of longer term, 3) too much incremental innovation and 4) ignorance of the real meaning of change, its rate and impact.

Three Horizons can help shift the thinking to ‘seeing in multiple horizons’

The Three Horizons can often move those intractable and contentious points through viewing them in different ‘horizon’ mindsets. They can offer a level of traction that feeds into managements thinking the social shaping trends, the emerging patterns being detected and allow for these to be articulated enough in a coherent way to shift thinking.

The Three Horizons are needed to be seen as different.

Mahatma Gandhi commented “First they ignore you. Then they laugh at you.  Then they fight you. Then you win”. It is by seeing these three horizons differently and the managing of these challenges you can break down the issue to help you have that better chance to ‘win’ in antiscipating and delivering the future in a more structured way of different innovations.

image credit: strategies for managing

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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.

No comments

  1. nice read and liked the point of Mahatma Gandhi in the post that said First they ignore you. Then they laugh at you. Then they fight you. Then you win”

  2. Interested in a conversation re how your model applies to public service innovation. Su

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