Three Horizons Framework
Map today's business, tomorrow's bets and the future you want to invent — on one page.
What it is
The Three Horizons Framework is a strategic planning model that assists organizations in visualizing and managing innovation and change over time. It categorizes initiatives into three distinct horizons, each representing a different stage of development and a different relationship to the core business. Horizon 1 focuses on optimizing and extending the current core business, Horizon 2 on developing emerging opportunities that will provide new sources of growth, and Horizon 3 on exploring disruptive ideas for the long-term future. This framework provides a structured approach to thinking about how to manage present operations while simultaneously investing in future capabilities and transformations, ensuring sustained relevance and growth.
When to use it
- Long-term strategic planning and visioning.
- Portfolio management across different innovation stages.
- Balancing current operational demands with future growth initiatives.
- Identifying and nurturing disruptive innovations.
- Communicating strategic priorities across an organization.
- Sense-making under uncertainty and stress-testing current strategy against multiple futures.
How to use it
- 1
Define Horizon 1
- 2
Explore Horizon 2
- 3
Envision Horizon 3
- 4
Allocate Resources
- 5
Iterate and Review
Key concepts
Horizon 1
Focuses on optimizing and defending the current core business, emphasizing efficiency, profitability, and extending the life of existing products and services.
Horizon 2
Deals with emerging opportunities that will generate new growth and value in the near to medium term. These often bridge the gap between the present and the long-term future.
Horizon 3
Involves exploring disruptive ideas and potential breakthroughs that could redefine the business or market in the long term, often requiring significant experimentation and learning.
Innovation Portfolio
The collection of initiatives across all three horizons, managed as a balanced portfolio to ensure sustainable growth and adaptation.
Ambidexterity
The organizational ability to simultaneously manage the existing core business (exploitation) and explore new opportunities (exploration) across the horizons.
Common pitfalls
- Neglecting Horizon 3, leading to long-term irrelevance or disruption by competitors.
- Over-investing in Horizon 1, hindering exploration of new growth areas.
- Treating the horizons as rigid, isolated silos rather than interconnected stages of growth.
- Lack of clear criteria for moving initiatives between horizons.
- Failing to allocate sufficient resources and leadership attention to emerging Horizon 2 and 3 initiatives.
Further reading
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