Innovation Horizons

According to Steve Coley (2009) the innovation work can be divided into three parallel Horizons, each one representing an S-Curve. The first Horizon 1 (H1) is about incremental innovation in today’s business, extending the existing S-Curve of the company. Horizon 2 (H2) is about expanding and building new business (the next S-Curve) through innovations. Horizon 3 (H3) is an explorative approach to future S-Curves, to be commercialized in H2, ending up in H1. Another source on the theme, O’Reilly III and Tushman (2004), talks about being able working ambidextrously with incremental and radical innovation at the same time

Horizon 1 Horizon 2 Horizon 3
Scope Core Business Growth business Future business
Strategic Focus Exploit and optimize existing business, incremental innovation Expanding existing and building new business, adjacent innovation Explore options, place small bets on emerging opportunities, radical innovation
Innovation Strategy1 Market Reader, Technology Drivers (incremental) Technology Drivers (partly radical) and Need Seeker Technology Drivers (Radical) and Need Seeker
Leadership Style2 Spiral Staircase Cauldron, Fertile Field, Pacman Explorer
Capabilities with strong correlation to strategy and leadership Clear Vision, Goal-Oriented Leadership, Core Focus, Market Insights Platform and Design thinking, Prototyping, Speed to market, Project Selection, Ideation External knowledge sharing, Co-Creation, Open Innovation, Anthropology, Technology Watch
Competencies Fully assembled To be acquired or developed Requirements uncertain
Metrics Return On Investment Net Present Value based on prototyping and hypothesis Strategic Option Value based on scenarios

Table A. Based on the work of Ralph-Christian Ohr and Kevin McFarthing. 1 Based on Jaruzelski & Dehoff (2010). 2 Based on Loewe, Williamson, Chapman Wood (2001)

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