To existing competitors, or to existing government requirements and acquisition systems, these new products/services look like minimum viable products - barely finished, iterative, and incremental prototypes. are all secondary to speed of deployment and asymmetry. Serviceability, maintainability, completeness, scale, etc. These rapid Horizon 3 deliverables emphasize disruption, asymmetry and most importantly speed, over any other characteristic. AirBnB, Uber, Lyft, Craigslist, SpaceX, and Tesla are examples of Horizon 3 disruptions using existing technologies and deployed in extremely short periods of time.
In the commercial space Uber took existing technology (smartphone app, drivers) but built a unique business model (gig economy disrupting taxis). To understand how quickly Horizon 3 products can come to market, consider some examples. In fact, it’s the speed of deployment of Horizon 3 products, strategies, and capabilities that are a devastating upset to the status quo. Today, disruptive Horizon 3 ideas can be delivered as fast as ideas for Horizon 1 in the existing product line.įor those who grew up with the notion that creative disruptive Horizon 3 products takes years are in for some unpleasant surprises. The three horizons are no longer bounded by time. While traditional analysis suggests that Horizon 3 disruptive innovations take years to develop, in today’s world this is no longer the case. That’s no longer true in the 21 st century - and leadership hasn’t gotten the memo.
This time-based definition made sense in the 20 th century when new disruptive ideas took years to research, engineer, and deliver. (When I say “business model” I don’t just mean private businesses, but also government agencies, nonprofits, and others who have a “mission model” instead.) For example, some organizations defined Horizon 1 as new features that could be delivered in the short term of three to 12 months, Horizon 2 as business model extensions that will be ready 24 to 36 months out, and Horizon 3 as creating new disruptive products or business models 36 to 72 months out. Here’s what’s changed: In the past we assigned relative delivery time to each of the Horizons. McKinsey suggested that to remain competitive in the long run, a company allocate its research and development dollars and resources across all three horizons. Horizon 3 is the creation of new capabilities and new business to take advantage of or respond to disruptive opportunities or to counter disruption.Įach horizon requires different focus, management, tools, and goals.Horizon 2 ideas extend a company’s existing business model and core capabilities to new customers, markets, or targets.Horizon 1 ideas provide continuous innovation to a company’s existing business model and core capabilities in the short-term.The model described innovation occurring on three time horizons:
The Three Horizons provided an incredibly useful taxonomy. However, in the 21 st century the Three Horizons model has a fatal flaw that risks making companies lag behind competitors - or even putting them out of business. The Three Horizons allowed senior management to visualize what an ambidextrous organization would look like - the idea that companies and government agencies need to execute existing business models while simultaneously creating new capabilities - and helped to prioritize innovation products and programs. Over the years, HBR articles have referenced the Three Horizons as a foundation of innovation strategy, here, here and here. When first articulated by Baghai, Coley, and White in 2000, in The Alchemy of Growth, the Three Horizons model was a breakthrough. I’m a big fan of McKinsey’s Three Horizons Model of innovation.
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