Three Horizons Model
Balance your innovation portfolio across current performance, emerging opportunities, and future options
Managing Innovation Across Time Horizons
The Three Horizons Model helps organizations balance their innovation portfolio to ensure both current profitability and future growth through strategic resource allocation.
Horizon 1
0-3 years
Core Business
Mature businesses that generate the majority of profits and cash flow
Key Activities:
- Optimize existing products
- Improve operational efficiency
- Incremental innovation
- Market share defense
Horizon 2
2-5 years
Emerging Opportunities
Emerging businesses with high growth potential
Key Activities:
- Scale new ventures
- Enter adjacent markets
- Build new capabilities
- Strategic partnerships
Horizon 3
5-10 years
Future Options
Seeds for future growth through research and pilots
Key Activities:
- Research & development
- Venture investments
- Explore new technologies
- Test radical concepts
Portfolio Balancing Factors
Resource Allocation
70-20-10 rule for optimal portfolio balance
Risk Management
Diversify risk across different time horizons
Leadership Focus
Different management styles for each horizon
Performance Metrics
Tailored KPIs for each horizon's objectives
Implementation Roadmap
Follow these steps to implement the Three Horizons Model in your organization
Map Current Portfolio
Assess all initiatives across three horizons
Identify Gaps
Find imbalances in horizon distribution
Set Targets
Define ideal resource allocation
Reallocate Resources
Shift investments to achieve balance
Build Capabilities
Develop skills for each horizon
Monitor & Adjust
Track progress and rebalance regularly
Common Pitfalls to Avoid
Over-investing in Horizon 1
Focusing too much on current business at the expense of future growth
Premature Scaling
Moving Horizon 3 initiatives to Horizon 2 too quickly
One-Size-Fits-All Management
Applying the same processes and metrics across all horizons
Lack of Migration Path
Not planning how initiatives move between horizons
Commercify AI-Powered Portfolio Analysis
Our AI analyzes your innovation portfolio and provides recommendations for optimal horizon balance
AI Portfolio Assessment
- Initiative Classification
Automatically categorize projects into appropriate horizons
- Resource Optimization
Identify resource allocation imbalances and suggest adjustments
- Risk Analysis
Evaluate portfolio risk distribution across horizons
- Transition Planning
Map progression paths from Horizon 3 to Horizon 1
Dynamic Insights & Recommendations
- Performance Tracking
Monitor horizon-specific KPIs and success metrics
- Opportunity Identification
Discover gaps and opportunities in each horizon
- Market Alignment
Align horizons with market trends and disruptions
- Capability Mapping
Identify skills needed for each horizon
Why Use the Three Horizons Model?
Sustainable Growth
Balance current profitability with future growth opportunities
Risk Diversification
Spread risk across different time horizons and maturity levels
Innovation Pipeline
Create a continuous flow of innovations from concept to market
Ready to Balance Your Innovation Portfolio?
Use Commercify AI to analyze and optimize your Three Horizons strategy