Within our ‘business as usual’ attitudes lie the seeds of destruction. Today there is a relentless pace; we are facing stagnation in many maturing markets.
We place a disproportionately high amount of our resources in the ‘here and now’ to defend what we have and what we know. A potential ‘big mistake’
We actually subvert the future to prolong the life of the existing. We constantly look to make it more efficient and more effective but this is in the majority of cases just incremental in what we do, both in innovation and our activities. These are often simply propping up the past success instead of shifting the resources into the investments of the future.
Spotting signs of innovating decay
Within the Three Horizon framework for innovation the horizon two is beginning to address some of the current decay arising from the core within the existing activities (or system). Here we have the highest tension point as it is the place for transformation to take shape and form.
We do need to challenge short-term thinking and balance this with this longer-term perspective and we do need to traverse into the future in clear thinking through steps (or horizons).
Our horizon one does begin to decay faster today than ever, it does not fully cover off the strategic fit we want and can begin to lose its dominance over time. We need to manage this transition, not let others manage it for us.
It is how we manage this transition becomes so critical.
We need to exploit developing trends that are emerging (h2) and begin to tune into possible options in the future (h3). Within these options will emerge the winners and become the more dominant systems or solutions that we should be moving towards, even from today. Some of these only have faint emerging signals but they need to be brought into the innovation portfolio activity to explore, often in novel ways.
The discussions that centre on often conflicting views of the future, compared to the existing realities and those providing the returns for today’s business. Often we can detect change but we consciously ignore it. This is the place where the disruptor’s are at work, existing or new competitors, working at displacing your products and market positions.
They look to be more agile, they might have greater entrepreneurial ways, they are ready to explore emerging practices far more than the established leaders, they look to leverage different business models and are certainly not handicapped with legacy and mindsets stuck in the past. Increasing competition is today’s certainty.
Horizon Two needs a totally different mindset.
You need to see H2 with different metrics, with different perspectives, with more open minds. This is not easy. This needs to become the meeting point or “the space for transition” where you begin to let go of just protecting your core and open up your thinking to experimentation, prototyping, exploring different business models and begin to figure out how these will impact your existing core, to become more agile and adaptive than you are in the existing system or structures
These horizon (h2) concepts being explored really do need ‘ring fencing,’ so you can protect these from all the ‘vested’ claims that your horizon one focus will continually demand to keep, so as to bring in the results in this calendar year.
It is a real fight, these ideas or nascent concepts ‘give off’ negative results, they are still a mix of the tangible and intangibles where you can’t get the ‘hard’ fix on the ROI, on their real market value or potential.
The risk of internal executive ‘attack’
Many executives ‘defending’ the core will ‘attack’ or hold back any release of their resources to help these emerging initiatives. It is a ‘hard-nosed’ reality. It needs a very high level and conscious set of decisions coming from the top to determine these new moves.
Do not believe that when most executives ‘just’ react and shrug their shoulders regarding h2 as a natural, everyday occurrence, it is far from not. Many have to come ‘kicking and screaming’ to supporting emerging activities. Far too much ‘invested’ interest comes into play. They see this more as a threat not an opportunity. It is not their sand box so why should they ‘play’.
The Collision Zone (h2) of the Three Horizon Approach
This is why the three horizon approach has real sustaining value because if we don’t have this longer-term, transformational perspective we are just prolonging the existing until it gets disrupted by others.
This is where the working across different horizons for ‘thinking’ through innovation does need different tools and mindsets and these should be based on (h1) see and operate, (h2) adjust your thinking frame and solutions, (h3) more evolutionary.
Each has different techniques to explore as I’ve previously outlined in my navigation guide to this approach.
The tensions are not just visible but played out in many subversive ways.
Just take performance metrics, if these are solely structured on the calendar year, are you realistically expecting a dilution of focus as their compensation is totally caught up in this.
Horizon two poses a real challenge within any management of our organizations. If it provides current small bases of volume, no real meaningful profit from the investments made it can be a hard sell across the organization.
Projects that focus on the future work mostly are based on ‘best’ assumptions. Sadly it is often executives expect to see the same ‘hard’ metrics being applied as the existing business. We ignore significant differences and this is a huge mistake.
Recognizing our present day thinking are at odds with future thinking
So you get these clear sense that many are sceptical or pay lip service to the products of the future as the thinking, judgement and value orientation are at such odds with the existing measures and metrics they apply to run today’s business and how they get judged.
We must move our thinking beyond the ‘here and now’ and push it into the future if we want to transform our innovation and that takes a very different mindset and where the three horizon framework can help significantly in balancing any innovation portfolio.