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).
