There’s a lot to like about living in Silicon Valley, working in emerging tech, and engaging with brilliant thinkers at places like Stanford. I’m lucky enough to live the global intellectual nexus of technology and entrepreneurship. But…(and you knew there was a “but” coming) I’m choking on the sheer number of “strategic technology frameworks” getting churned out, and I have a bad feeling that most were created by academics who have never created an innovative product or built a new venture.
There are a few frameworks I do find incredibly useful as I go about my day job, helping “intrapreneurs” create tech-enabled new ventures for big companies. Let me share one, and please weigh in with your favorites. Look for a few more in future posts.
No Borders – Only Horizons
Kudos to Baghai, Coley, and White for publishing their Horizon framework in 2000, in ‘The Alchemy of Growth’. By creating a taxonomy of three horizons, they gave corporate execs a practical way to think about technology and make intelligent decisions about strategy and execution for tech innovation programs. Here are the three horizons that help decision-makers to deliver on tech-enabled challenges:
- Horizon 1: Extend Core Technologies, 1-2 years
- Companies use existing tech to improve their business models and maximize their value and effectiveness in the short-term.
- Big companies love Horizon 1, because they’re structured to deliver on core competencies and embrace incremental change.
- Horizon 2: Develop New Opportunities, 2-5 years
- Organizations invest in emerging technology to generate substantial value in the future, often around disruptive opportunities.
- These programs extend a company’s business model and its core capabilities to entirely new customers, new markets, or both.
- Horizon 3: Create Viable Future Visions, 5-10 years
- Research programs and academic collaboration lead to the creation of entirely new capabilities and new businesses.
- This is the realm of R&D labs in large organizations, and spooky organizations like DARPA.
So, why should you care about this? Because nearly all companies do a crappy job on Horizon 2, and tech-enabled Horizon 2 opportunities are key to your company’s survival. Have you noticed that certain initiatives in your organization, like implementing AI for predictive maintenance or adding IoT to your industrial processes, are always 2-4 years away, year after year? That’s because Horizon 2 programs defy corporate innovation processes and remain stubbornly out of reach for most organizations.
What processes work for successful Horizon 2 programs? I’ve been at this for 30 years and I’ve only seen one successful strategy for Horizon 2 programs: Create autonomous teams of entrepreneurial people, get them the hell out of the office, and lift corporate governance. In short, take a page from disruptive startups. None of these steps is easy, but Mach49 and other incubators area seeing remarkable results. In my career, external incubations are the first consistent path I’ve seen for huge organizations to create disruptive new ventures.
It’s been a pleasure to watch RWE, the massive German energy company, beat the odds and propel Horizon 2 initiatives forward through incubation. The leadership knew they could not keep pace with the market using internal processes, so they selected an entrepreneurially-minded employee, Sukhjinder Singh, to lead internal startup pear.ai. Thanks to Sukhjinder’s boundless energy and drive, Pear is embracing AI-enabled chatbots and natural language processing to extract value from energy data. RWE delivered a Horizon 2 program in record time, and had they employed their internal innovation methods, the new business would have been delivered…never.
Talk to me. Which tech innovation frameworks are helpful for you? I’ll share two more in future posts.
Credits and thank you to Baghai, Coley, and White for publishing their Horizon framework in 2000, in ‘The Alchemy of Growth‘