Three Horizons Framework Example

Copyright Cody Clark, Creative Commons License, 20111

The Three Horizons Innovation Framework

1

2 4

Horizon 1Present (0-2 yrs)

Horizon 2Next

(2-5 yrs)

Horizon 3Future(5+ yrs)Suppliers/

Vendors

Customers

Enabling Technologies

WorkforceCompetitors

Security Environment

New Missions/ Programs

Scanning:Anticipate and track change drivers emerging from the transactional environment

Framing:Mission, CSFsGoals, ObjectivesStrengths/WeaknessesProduct Cycle TimeRisk Posture

Environment

Assessment:Opportunity and/or Threat?Power of ImpactScope of ImpactProbability

Velocity

3

Assign items from scanning to one of the three horizons as they are assessed

Budget/ Economy

5Portfolio Management:Separate prioritization schemes for each horizon

Tech PlanningProjects

Concept Development,

Prototypes

Monitoring, Research


Framing the Three Horizons for MOD

Mission, CSFs – What do you do and how do you measure success?

Goals, Objectives – Current vision and strategy

Strengths/Weaknesses – Necessary to understand sensitivity to change

Product Cycle Time – How much time do you need to react?

Risk Posture – Where do you want to be on the tech adoption curve?

Transactional Environment – Define the entities in the environment that are relevant sources of external change

Rogers Diffusion of Innovations Curve

Innovator?

Mainstream?

Risk Averse?

Gartner Hype Curve


Horizon 1Present

Horizon 2Next

Horizon 3Future

Who Participates? Standard project governance

MSRB with SRWG in support? SRWG facilitates process for all of MOD

Horizon Length(based on product cycle and dynamic nature of the environment)

0-2 Years 2-5 years 5+ years

Est. Percent of Budget(rule of thumb based on risk posture, etc.)

70% for Early Adopter~93% Late Majority



Prioritization Criteria

Typical project portfolio management.

Impact assessment matrix. Horizon 3 impact assessment with business case/ROI considerations

Objective assessment of drivers themselves -- impact, probability, velocity…Subjective assessment of drivers against goals, strengths, weaknesses…

Tools/Activities Legacy tech planning process

Prototypes, trade studies, white papers, roadmaps

Scenarios, Relevance Trees, Cross-impact analysis, Delphi, Signposts , Vision networks…

Three Horizons in Detail


Appendix: Background on Potentially Relevant Foresight Concepts

Compiled and Created by Cody Clark


Characterizing Change Sources

- Incoming: Change we experience- Outgoing: Change we create

Location- Internal- External

Change Rates- Continuous: Trends, Cycles- Discontinuous: Events, wildcards

S-Curve Punctuated Equilibrium S-CurveS-Curve

Era

Era

EraTransition

Transition

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3


Rogers’ Diffusion of Innovations Curve

Web Beyond…Offline Web, Internet Of Things, Biological Web,

???

Web 3.0Connecting Programs/

Intelligence

Web 2.0Connecting

People

Web 1.0Connecting Information


Cumulative Distribution of the Rogers Curve is the “S- Curve” of change

S-CurveS-Curve

12

3

Also called the “Issues Management Curve”


Anticipating ChangeAnticipating Change

• Disruptive Change is not completely unforeseeable

• Evidence of the future is always available in the present (Horizon 1)

Era

Era

EraTransition

Transition

Era

Era

Transition1

2

3Anticipatory

Proactive

Reactive

Anticipate and Act Early


Cone of Plausibility

Present

Past

More Risk, More Strategic

Advantage

Less Risk, Less Strategic

Advantage

Vision: Preferable Baseline: Probable

Alternatives: Plausible, Possible

1-3 yr horizon

5-10 yr horizon

20+ yr horizon

Futures

There is inherent risk that comes with anticipation


Technology AssessmentAnalyze Timing

Current State• Technology Readiness

Level • Awareness Level, Gartner’s

“Hype Curve”• Technology Adoption Level

“Velocity” – Timing of past states relative to present

Future States• Time to Market• Time to Awareness

Technology Readiness Level

Technology Diffusions Curve

Technology Adoption Curve


Estimate Probability of ImpactAnticipate Scope/Reach

• limited specialty/sub domain impacted• entire domain/market impacted• multiple domains/markets impacted• universal social impact

Anticipate Disruptiveness• Power – personal level of impact• Which key domain constraints, assumptions may

be overturned?• Leverage on System Dynamics

• System Dynamics Leverage Modeling, or• Donella Meadows’ 12 Systemic Leverage

Points• Vulnerability -- Consider client ability to respond

(flexibility, capability, etc.)

Technology AssessmentPotential Impact

EraEra

EraTransition

Transition

How Disruptive?

Power: What level of personal need might it affect?

How much Systemic

Leverage?


Futures Wheel (Relevance Tree)

Developed by RAND in the 1960’sUsed for exploring impacts of trends, events, plans, and emerging technologies


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VisioningVisioning

Strategic Actions

Strategic Actions

ForecastingForecasting

Futures Method Overview

What is likely to happen:

Probable, Possible Futures

What we want to happen:

Preferable Futures

What we do to close the gap:

Planned Futures


Scenario Generation Approaches

From University Futures, (http://www.universityfutures.org/prospective_methods)


Incasting Method of exploring alternative futures Activities

- Input: Given a scenario logic/description as input (e.g. from scenario generation exercise)

- Accept the scenario as basis of exercise. (Not allowed to question the scenario)- Explore the scenario using STEEP and some “Day in the life” type questions,

such as…. Who are the winners and losers in this scenario? What challenges does this scenario present to leadership? What new roles or professions exist in this scenario? Which existing ones have disappeared? How would our strategy have to change for us to survive or thrive in this scenario?

- Output: More fully developed scenario and more internalized “sense” of each alternative future


Backcasting

Method of identifying intermediate future states from a longer-term future (or a preferable future vision)

Steps- Input: Given a scenario logic/description as input (e.g. from scenario

generation exercise)- Accept the scenario as basis of exercise. (Not allowed to question the

scenario)- Explore briefly the scenario using STEEP - Identify the prerequisite states needed to enable the scenario- Recursively identify the prerequisite states for each intermediate state, all

the way back to present conditions- Good for “Gap” analysis between a vision and a current change

framework. Input for strategic planning.- Output: A “path forward” and “vision network” for a given future

Three Horizons Framework Example

Technology

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