Business Knowledge

Innovation Strategy: Applied Frameworks

Three Horizons of Growth: Balancing Now and Next

Don’t let today’s success blind you to tomorrow’s opportunities.

1. Horizon 1: Protect & Optimize Your Core (The Present)

  • Focus: Making your current business as good and profitable as possible. (80% of your effort)
  • Actions: [ ] Incremental improvements, cost reduction, efficiency gains.
  • Goal: Maximize current profits.

2. Horizon 2: Nurture Emerging Opportunities (The Near Future)

  • Focus: Scaling up new ideas that have already shown promise. (15% of your effort)
  • Actions: [ ] Pilots, new features, new market segments.
  • Goal: Build new revenue streams.

3. Horizon 3: Create Viable Options (The Distant Future)

  • Focus: Making small, experimental bets on radical new ideas. (5% of your effort)
  • Actions: [ ] Research, prototypes, moonshots.
  • Goal: Discover future breakthroughs.

Your Innovation Portfolio:

  • Do you have projects in all three horizons?
  • Are you allocating resources (time, money, talent) appropriately to each?
  • Pitfall: Over-investing in H1 and ignoring H3 leads to long-term decline.

The Business Model Canvas (for New Ideas):

  • Use this to quickly sketch out H2 and H3 ideas.
  • Forces you to think about customers, value, revenue, costs, etc.
  • Golden Rule: Innovation is a continuous process, not a one-off event. It requires discipline and a balanced portfolio.