Horizons of innovation

The 3 horizons of innovation still seems a valid model when it comes to thinking about innovation and roadmap planning. It connects uncertainty (risk) with distance (time). Horizon 1 is what we do now, making sure the current business keeps running. Horizon 2 is preparing for tomorrow, keeping up with the changes continuously around us. Horizon 3 is what we do next week. Might be something completely different. We do not know yet.

McKinsey’s 3 Horizons of Innovation/Growth

Blank suggests the model is good, but outdated . That we have outgrown it and should stop assigning “relative delivery time to each of the Horizons”. Companies apparently used the models in a front side back sort of manner. If you can deliver only in e.g. 5 years, independent of what it is that you are delivering, it must be 3rd horizon innovation. Yes, that is wrong, bordering almost on – eh – silly.

The horizons is only a metaphor. 3rd horizon innovation is highly risky but also highly disruptive. But 3rd can be here next week, probably by a young start-up not limited by current market thinking, or the red-tape of a large company.

An other more conservative alternative is the Innovation Ambition Matrix mapping products/capabilities against known/unknown markets. What I like about such an approach is that it puts investments in the future in context of what you have/are capable of now. New capabilities to address new markets (3rd horizon) is risky/transformational development.

What helps me is the overview below, probably from intent similar to Claes approach to look at markets and business models. In the overview below. the current business/technology is in the lower left quadrant. If you do not do anything, it will disappear. So what can you do? You can try to address the same market with new business models or technology (continuous new development and improvement), or you can try to address new markets with the same business model/technology (branching out). Of course you can do a combination, but that gives more uncertainty and therefore is more risky (the famous 3rd horizon). Why I like this? Because is shows a path forward/opportunities in context of where you are now.

What do you think?

Leave a Reply

Your email address will not be published. Required fields are marked *

AlphaOmega Captcha Classica  –  Enter Security Code