"When first articulated by Baghai, Coley, and White in 2000, in The Alchemy of Growth, the Three Horizons model was a breakthrough. Over the years, HBR articles have referenced the Three Horizons as a foundation of innovation strategy, here, here and here."
Steve Blank HBR Feb 1 2029
Bank goes on to show how the model has been turned upside down by agile systems and true iterative development. Self-service configuration by the business without the need for coding, IT involvement or vendor's consultants has further tipped the balance.
Constant improvement, a "fail-fast and apply learnings" approach to innovation is the hallmark of the agile enterprise in a fast changing world. The waterfall approach to development is no longer valid.
A reminder of the Three Horizon's model:
- Horizon 1 ideas provide continuous innovation to a company’s existing business model and core capabilities in the short-term.
- Horizon 2 ideas extend a company’s existing business model and core capabilities to new customers, markets, or targets.
- Horizon 3 is the creation of new capabilities and new business to take advantage of or respond to disruptive opportunities or to counter disruption.
Enterprises used to spend up to 36 months on Horizon 3. Now they must achieve that in months. Otherwise a nimble competitor will hurdle over you like Netflix has incumbents.
Choose technology partners that embrace the inverted Three Horizon's Model.
Here’s what’s changed: In the past we assigned relative delivery time to each of the Horizons. 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. (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.) This time-based definition made sense in the 20th century when new disruptive ideas took years to research, engineer, and deliver. That’s no longer true in the 21st century — and leadership hasn’t gotten the memo.