Exploring the Rich Tapestry within the Three Horizon Framework

Posted on August 22, 2016 by @paul4innovating

https://paul4innovating.com/2016/08/22/exploring-the-rich-tapestry-within-the-three-horizon-framework/

Very interesting discussion on the Three Horizon model we deploy and teach on our Market Driven Growth process at Kellogg.

Within our ‘business as usual’ attitudes, there actually lies the seeds of destruction. Today there is a relentless pace; we are facing stagnation in many maturing markets if we don’t evolve.Yet we actually subvert the future to prolong the life of the existing. We need to frame our innovation needs differently for exploring and exploiting innovation across different time horizons to move beyond the usual.
 Commonality within innovation is becoming increasingly important. We need to build clear common languages of innovation, frameworks, methods and approaches.There is a pressing need to frame innovation in different ways, to meet change that lies in the future. We are in need to clarify our options and this requires multiple thinking horizons to work through to deliver a richer tapestry of innovation discovery.Innovation is constantly facing disruption; it is constantly going through life cycles and new waves of different activities and we begin decay faster today than ever. We run an increasing risk that we begin to lose any dominance or competitive position increasingly. We need to innovate to sustain ourselves and maintain our market positions in a rapidly evolving world. 

The key requires us to manage this transition, not let others manage it for us. We need a far more robust, well thought-through way to apply our innovation resources to meet and anticipate these changing events. It is how we manage this transition becomes so critical. 

The three horizon framework needs to become the innovation space for dialogues, planning, portfolio debates, differentiating the distinctions between the three time line perspectives and generally arguing for inclusion, the value and importance of the thinking and then applying the appropriate resources needed in the management of innovation across these three different timelines.The 3H framework is a powerful enabler.The value of the weak signals needs amplifyingWe need to exploit developing trends that are emerging in the different but future horizons and begin to tune in and discover the emerging possible options in the future.The discussions in any forecasting or futuristic planning often have conflicting views of the future, compared to the existing realities based on those products and services that are providing the returns for today’s business. Yet the future is also equally rooted in the present, often called ‘weak signals’I am a great follower of Dave Snowden’s thinking and work over at www.cognitive-edge.com on “making sense of complexity in order to act” which includes SenseMaker® and the Cynefin Framework, which I have written upon in its value, in this post “use of the Cynefin model for innovation” ,and within his work equally are clear views of managing change. 

Dave Snowden’s has a view that works for me in applying the thinking around the three horizons, this fits so well. He argues instead of trying to tackle the unknowable, as it is inherently unknowable, he rightly suggests 1) we fully explore the evolutionary potential of the present, 2) bring in as wide an engagement of views to find a more sustainable or resilient set of solutions to emerge and 3) in his view, and most probably the most important point, it is how you build the narrative and descriptors, as the danger becomes the more you attempt to predict and evaluate, the more you can close down options, some far too early. 

He suggests the more you can hold onto this descriptive level, the longer you have in widening the range of intervention points as more knowledge becomes available. You spend less time on (predicting) outcomes and more time on measuring vectors (velocity, acceleration, magnitude, force of direction) which for me, allows the progressive build of the right future capabilities, in more evolving and evolutionary ways of learning from exploring and experimenting, the key transition point of Horizon 2 (h2). 

Resisting the early decision.It is often the cases we can detect change but we consciously ignore it or dismiss it out of hand. This is often the place where the disruptor is presently at work, both existing or new competitors, exploring or exploiting different options, working at displacing your products and market positions. The combinations of new technologies, concepts and business models are constantly emerging and we need to be pioneers these as well as detect them as they emerge, anticipating the change these might bring and focus on building the capacity and capabilities to advance on your own curve of understanding.We need to separate and structure different mindsets to developing innovation capabilities to explore and prepare for the future, as well as deepen the exploration, to leverage the present. Structuring the approach, by looking across multiple horizons, allow you to evolve the entire innovation portfolio and begin to recognise the many gaps that exist within your thinking, within your capabilities and capacities to innovate.Separating the horizon lenses 

By looking at this through separate horizon lenses does equally assist you in allocating the appropriate but usually different resources that are needed to be applied, to each of the time horizons and challenges that are identified and lie within them.The three horizon framework has the clear intent to grow awareness and offer a better understanding of how innovation works and fits, with also its great value for clarifying the structuring and allocation of innovation’s management. It can be used for portfolio alignment, resource structuring and the mechanism for broad dialogue of explaining decisions and describing the growing consensus of the future direction.The three horizon framework  can offer a vital part within all the organisations thinking around working through its innovation ambitions, not just for the present but for the future and how these can transition, connecting the reality of the present with the concepts of the future.The need is we all should make the case that different types of innovation operate and evolve over different time horizons and need thinking through differently.The three horizon framework  goes well beyond simply a planning tool, it does provide a valuable evolutionary perspective that dialogues can be formed around, so decisions on where to focus and what resources need to be applied can be made for delivering a constantly evolving ‘state’ of innovation development. Dialogues that deliver that then get translated into more plausible and coherent set of activities, projected into the future, searching for emerging winners that can change and challenge your existing business.The three horizon framework is about having strategic conversations about the future, that feeds the discussions about your innovation direction, shaping the longer-term portfolio and capability understandings. It is increasingly vital to understand all of its ways to contribute to your innovation developments and needs.Its value – if well-managed – can offer a helpful way for a significant series of dialogues and tensions to surface, but through this engagement and respect for different positions, you can find mutual ways of connecting your innovation activities and resolve these different opinions, emerging over the different horizons and diverse thinking. You are managing uncertainty in better ways, as a team or organisation through this framing dialogue.If you would like to explore all the different ways that give the three horizons framework a much richer return in its value and use, then let me know.

Reflecting on our Innovation Practices

by Paul Hobcraft

http://innovationexcellence.com/blog/2018/03/13/reflecting-on-our-innovation-practices/

Very interesting article

Innovation has been rapidly changing and much of its basics have been swallowed up by some newly defining frameworks that have raced up to the top of the innovation agenda. They have driven much of our thinking and reacting. It is right that we all respond to these but we often forget much of the rest of what innovation needs to be built upon.

 Doesn’t the innovation needle keep shifting constantly?The basics of innovation still form around building the engagement, leadership, and involvement, in constructing a culture, the climate and environment needed, so as to allow innovation to evolve and thrive. Then there is that need for a constant investment in people, in our networks and relationships, that all need to come together. These are the foundation to build innovation capacities. 

Then, we have the investments in structures, systems, and governance, making sure these are flexible and robust enough to make what we work upon, as responsive, agile, adaptive, exploitative and exploratory. All coming together so we can end up with great new ideas, things and most importantly, in winning successful concepts that grow our business. The shifts taking place around innovation have been significant in their impact. The shifts taking place has been hugely shaped by how digital transformation continues to grow in its importance. how it is influencing much that is surrounding innovation, as it continues to disrupt in faster, demanding ways, where it deconstructs and then, it is forcing us to reconstruct our innovative thinking, so as to gain from all this transformation occurring all around us. The other real forces of innovation change in this relatively short period have come from a great explosion of Lean Management principles and practices and the incorporating of Design thinking  (embodied in MDG and our class at Kellogg) into our work. Both of these are being rapidly embraced by our organizations, large and small. How these are fully and successfully integrated remains a challenge for most to resolve today.

 

The raw power of knowledge needs harnessing and translating It is this ‘raw’ power of technology, pushing the flow of knowledge and exploiting the different social mediums that are swirling around us, with many suggested designs and frameworks that need deeper capture and translation, so as to extract new value.We all need to think through the value of the pivot, prototype, the constructing of minimal viable products and rapid experiment and design to increase in focus, so as to accelerate innovation discovery and delivery.We are learning faster, shutting down what does not work as we go, adapting faster than before with our innovative concepts, by being engaged and constantly informed by customer needs. 

LEARNING FROM THE PROS: KOHLER

Very interesting short video on how Kohler, a top of the line bathroom/kitchen fixture company created competitive separation in a "commodity" market.

https://www.americanexpress.com/us/small-business/openforum/videos/learning-pros-kohler/?extlink=sm-openf-emailshare

Definitely
worth listening to.

Bit by Bit, Whole Foods Gets an Amazon Touch

By Nick Wingfield
March 1, 2018
https://www.nytimes.com/2018/03/01/technology/bit-by-bit-whole-foods-gets-an-amazon-touch.html



I thought this was a fascinating story of M&A integration feeding organic growth—building the capability platform. Keep in mind, some major thrusts at Amazon are:
• Entering the fresh food market via delivery of groceries
• Offering peripheral services that build interest in their Amazon Prime which offers free shipping to those members for an annual fee and bolster Amazon sales on their site
Suggest watching this very brief video on Amazon’s strategy:
  https://www.youtube.com/watch?v=BZQn98ko29o

Some signs are subtle, like the “Whole Foods + Amazon” one near the bananas. Others are more obvious, like the kiosk with Amazon devices for sale. 

It has been six months since Amazon took over Whole Foods, a $13.4 billion deal that made the internet retailer a major player in the world of brick-and-mortar retailing. For the most part, the 470 stores are still the same upscale, expensive healthy food emporiums that they have always been. 

Amazon has grander ambitions as well. The company’s executives are busy devising ways to connect its Prime membership program, which offers benefits like fast and free shipping and video streaming, with the stores. 

The company has said that Prime will eventually become the Whole Foods customer rewards program. It recently took a baby step in the direction of weaving together Prime and Whole Foods by giving Prime members 5 percent back on Whole Foods purchases made with an Amazon-branded Visa card. Whole Foods has signs about the offer all over its checkout stands. 

Some of the changes Amazon has made are experiments limited to a few locations. Others, like price cuts on grocery staples, are widespread and a sign of more to come, its executives say. 

“We’re determined to make healthy and organic food affordable for everyone,” Jeff Wilke, the chief executive of Amazon’s worldwide consumer business, has said.Here are a handful of notable changes Amazon has made to Whole Foods so far.(WATCH: Mr. Wilke, speaking at The New York Times’s New Work Summit, explains his strategic vision for the retailing giant and the critical role Whole Foods will play.)

Home DeliveryLast month, Amazon allowed people to buy thousands of different items from Whole Foods and have them delivered by Prime Now, a speedy Amazon delivery service that uses contractor drivers in their personal cars. The service, available only for Amazon Prime members, offers free two-hour delivery of orders and one-hour delivery for $7.99 on orders over $35. (Driver tips are optional.) 

Amazon introduced Prime Now delivery for Whole Foods stores in Austin, Tex.; Cincinnati; Dallas; and Virginia Beach. The company said it would expand the service to the rest of the country in 2018. Inside the Austin store, Prime Now orders in brown paper bags wait on shelves and in refrigerators for drivers to come pick them up and spirit them to customers’ homes. A banner at the entrance to the store promotes the delivery service. 

(Some) Price CutsA few days before Amazon completed its acquisition of Whole Foods, it announced a series of price cuts on grocery items, a move to change the perception of the chain as “Whole Paycheck.” It slashed the price of a dozen Organic Valley large brown eggs by 27 percent and cut the cost of a 16 ounce jar of 365 brand crunch almond butter by 13 percent. For Thanksgiving, it made turkeys cheaper, and for Valentine’s Day, it dropped the price on roses.Still, much of the selection in Whole Foods stores still carries premium price tags. Studies by analysts have shown that overall prices on typical Whole Foods shopping expeditions have decreased only slightly. Whole Foods said there was more to come. “We’ve done quite a bit,” Brooke Buchanan, a spokeswoman for the market, said. “There’s still so much more we have planned.” 

GadgetsThe most conspicuous sign of Amazon’s agenda inside Whole Foods is the kiosks containing Amazon electronics that now lurk near store aisles. Not far from the Honeycrisp apples and bulk bins of granola, shoppers can now pick up an Echo, a Fire TV or a Kindle. 

In a handful of Whole Foods stores, including in Denver and Chicago, Amazon has opened big electronics stands called pop-up shops, which are staffed by Amazon employees who can answer questions about the devices. The pop-up shops, which are at dozens of shopping malls around the country, give shoppers an opportunity to try the devices in person, something they cannot do when they browse online. 

Amazon Order PickupFor years, Amazon has been installing banks of lockers inside and around supermarkets and other buildings, giving people who order items on Amazon a secure place to pick up their packages. The lockers can also be used to return items ordered on Amazon.Since the Whole Foods deal closed, Amazon has put its lockers inside all of the chain’s stores. In some stores, the lockers are smaller and tucked among the wine and other goods. The Austin store has a huge bank of lockers near a set of escalators. 

Bolstering Private Label FoodsSo far, much of the changes have gone in one direction: injecting a little Amazon into Whole Foods. But a little Whole Foods is being added to Amazon, too.Amazon has sought to bolster Whole Foods by making the chain’s private label products available through its various online outlets. Whole Paws, the grocer’s pet food brand, and 365 Everyday Value, its line of foods for budget shoppers, can now be purchased through Amazon.com and AmazonFresh, an existing grocery delivery service run by the internet retailer. 

Amazon even dedicated an area of its automated convenience store in Seattle, Amazon Go, to Whole Foods private label goods.