The Three Horizons framework, widely known for strategic foresight and planning, provides a structured way for organizations to navigate the complexities of innovation across different timeframes.
[1] Designed to help companies balance their current operations while preparing for future disruptions, the framework divides innovation into three distinct horizons: Horizon 1, which involves continuous improvement within the current business model; Horizon 2, which extends existing business models into new markets; and Horizon 3, which focuses on creating new capabilities in response to disruptive opportunities. However, despite its widespread adoption, the model has significant limitations that can misguide organizational strategies, especially in a fast-paced and unpredictable environment.
THE MISCONCEPTION OF LINEAR PROGRESSIONA primary critique of the Three Horizons model comes from Steve Blank, who, in his influential article in the Harvard Business Review, challenges the assumption of linear progression that the model often implies (Blank, 2019). Initially formulated by Baghai, Coley, and White (1999), the framework was designed to help senior managers balance the need to execute current business models while simultaneously developing new capabilities. (See Fig.4.) The model delineates innovation into the following horizons:
Horizon 1: Continuous innovation within the current business model.
Horizon 2: Expanding existing business models to new markets.
Horizon 3: Developing new capabilities to respond to or counteract disruptive opportunities.
In the past, each horizon was associated with specific delivery times: Horizon 1 innovations within 3-12 months, Horizon 2 innovations within 24-36 months, and Horizon 3 disruptions taking 36-72 months to develop (McGrath & MacMillan, 2009). This temporal framework was relevant when disruptive innovations took years to research and implement. However, in the 21st century, technological advancements have significantly altered this timeline. Disruptions, particularly those within Horizon 3, can emerge as quickly as those in Horizon 1. Uber, Airbnb, and Tesla have rapidly deployed Horizon 3 technologies and business models, effectively upending entire industries in months (Christensen et al., 2015).
The rapid deployment of Horizon 3 disruptions highlights a critical flaw in the traditional understanding of the framework. Today’s disruptions prioritize speed, scalability, and adaptability over incremental improvements, often manifesting as minimum viable products (MVPs). These MVPs are rapidly launched, iterated upon, and disruptive by design (Curry & Hodgson, 2008). Once they gain traction, they challenge incumbent firms that rely on slower, more methodical innovation processes. The new entrants—unencumbered by legacy systems—are often best positioned to leverage Horizon 3 disruptions, leaving established companies scrambling to catch up.
To combat these rapid disruptions, incumbent firms can adopt several strategic responses:
1. Incentivizing external innovation through competitions or contracts to quickly align external resources with their objectives.
2. Acquiring innovative startups that operate at the pace of disruptors, integrating new capabilities without the burden of legacy systems.
[3]3. Emulating disruptive innovations quickly by leveraging their existing market dominance to outpace newer entrants (Curry & Hodgson, 2008).
4. Out-innovating disruptors, although overcoming internal cultural and structural barriers, is a challenging yet essential task (Christensen, 1997).
SHORTCOMINGS OF THE THREE HORIZONS MODELDespite its strategic value, the Three Horizons framework has several significant areas for improvement, which can limit its effectiveness in fostering long-term innovation in a rapidly evolving business landscape.
Overemphasis on CategorizationOne of the main criticisms of the model is its rigid categorization of innovation into distinct time horizons. While this categorization helps clarify different stages of innovation, it risks oversimplifying technological progress’s fluid and interconnected nature. Innovations often need to fit more neatly into the horizon-based timeframes outlined by the model. Forcing projects into fixed horizons can stifle creativity and flexibility, preventing organizations from adopting more integrated approaches to innovation (O'Reilly & Tushman, 2016). This rigid structure may encourage organizations to view Horizon 1 as focused solely on incremental improvements, while Horizon 3 becomes the realm of radical innovations. However, the reality is much more complex, as innovations often blur the lines between these categories (Pisano, 2019).
Disregard of InterdependenciesAnother significant limitation of the Three Horizons model is its failure to recognize the interdependencies between different horizons. By treating each horizon as relatively independent, the model overlooks how innovations in Horizon 3 can fundamentally reshape the landscape for Horizon 1 and Horizon 2 initiatives (Govindarajan & Trimble, 2010). For example, disruptive technology in Horizon 3—such as artificial intelligence—can dramatically alter projects' viability or strategic direction in other horizons. Despite this, the model treats each horizon separately, ignoring these crucial interactions.
Organizations that rely too heavily on the framework may need to pay more attention to how Horizon 3 disruptions could render Horizon 1 projects obsolete. Without accounting for these interdependencies, businesses risk misallocating resources or pursuing strategies that are no longer relevant in the face of emerging disruptions.
Inadequate Handling of Disruptive ChangeWhile Horizon 3 is intended to focus on disruptive innovation, the framework does not inherently prepare organizations to handle the chaotic and unpredictable nature of disruptive change. By their nature, disruptions defy linear progression and are often unforeseen and abrupt. The Three Horizons model may create a false sense of security, encouraging organizations to believe they can manage disruption through structured planning. Disruptive forces often arise unexpectedly, outpacing the timeframes and assumptions built into the model (Markides, 2006).
Disruptions such as the rise of the smartphone industry, the emergence of electric vehicles, or the sudden dominance of streaming services show how unpredictable these shifts can be. In industries experiencing rapid technological advancements, the traditional timeframes associated with each horizon can become misleading (Schmidt & Druehl, 2008). As a result, organizations that rely too heavily on long-term planning may be caught off-guard when disruptive technologies emerge much faster than anticipated.
[4]Resource Allocation ChallengesAnother challenge the Three Horizons model presents is allocating resources effectively across all three horizons. While the model encourages a balanced distribution of resources, organizations often need help determining how much investment to commit to each horizon. In practice, short-term pressures, such as the need to meet quarterly financial targets, can lead to a disproportionate allocation of resources toward Horizon 1 initiatives. This can result in Horizon 3 projects needing more funding or addressed, limiting the organization's ability to foster long-term innovation (Kaplan & Norton, 2008). Without proper investment in Horizon 3, companies may be ill-prepared for future disruptions and unable to sustain their competitive edge.
Cultural and Operational FitImplementing the Three Horizons framework requires an organizational culture that supports long-term thinking and embraces uncertainty. However, many organizations, especially those in highly regulated industries or those driven by short-term financial goals, struggle to adopt this forward-looking approach. The cultural and operational barriers that prevent organizations from embracing Horizon 3 innovation can be significant, and the framework does little to address these challenges. Without the proper cultural and operational support, the framework may not deliver the intended benefits (Edmondson & McManus, 2007).
Scalability and FlexibilityThe simplicity of the Three Horizons framework can become a limitation as organizations grow and scale. Larger companies with more complex operations may find the model too simplistic to capture the full breadth of their innovation efforts. The linear approach to innovation may not be flexible enough to account for rapid technological shifts or consumer behaviour, particularly in industries where innovation cycles are increasingly compressed (Moore, 2004).
THE LINEAR MYTH: THE ILLUSION OF PREDICTABILITY [5]At its core, the Three Horizons model suggests that innovation progresses linearly and predictably. However, this assumption overlooks the inherent unpredictability of disruptive innovation (Christensen, 1997). Disruptions are characterized by sudden, unforeseen changes that dramatically alter the landscape. For instance, the iPhone's introduction in 2007 revolutionized the mobile technology sector, transforming communication, photography, internet access, and software distribution (Isaacson, 2011). Many analysts initially predicted the iPhone’s failure due to its high price point and lack of a physical keyboard (Gans, 2016). However, Apple redefined the market by integrating multiple functionalities into one device, rendering previous mobile technology innovations obsolete.
The iPhone’s success exemplifies how disruption can defy traditional models of linear progression. Rather than incrementally improving existing technologies, the iPhone introduced a new paradigm that disrupted the entire mobile phone industry. This case demonstrates how the Three Horizons framework may fail to predict and manage such abrupt, radical shifts.
[6]EXAMPLES OF THE MODEL'S LIMITATIONSThe Smartphone RevolutionAs mentioned above, introducing the iPhone in 2007 is a quintessential example of how the Three Horizons model fails to account for rapid and unpredictable disruptions. Traditional mobile phone manufacturers like Nokia and BlackBerry were focused on Horizon 1 innovations, making incremental improvements such as enhancing camera quality and extending battery life (Doz & Kosonen, 2010). These companies adhered to the linear progression outlined by the Three Horizons framework, expecting gradual market evolution and technological enhancements. However, Apple bypassed this linear trajectory entirely by reimagining the phone as a multifunctional device, combining the internet, music, and communication into a single unit. The iPhone was not merely a better phone but a new category that disrupted the entire industry (Manu, 2022). This leap was a Horizon 3 disruption delivered far more rapidly than the model anticipated, illustrating the limitations of using the Three Horizons framework in fast-evolving sectors.
The Media Industry DisruptionNetflix's media industry disruption offers another prominent example of the Three Horizons model's shortcomings. Adhering to the model, traditional television networks and cable companies focused on Horizon 1 and Horizon 2 innovations—improving content delivery and gradually embracing digital platforms (Johnson, 2010). Their efforts were largely incremental, aimed at enhancing existing business models rather than rethinking them entirely. However, Netflix introduced a Horizon 3 disruption by pioneering a streaming model that fundamentally altered media consumption. Instead of following a predictable, linear path of evolution, Netflix leapfrogged traditional content distribution systems, shifting consumer behaviour and introducing a radically different business model (Yoffie & Baldwin, 2016). Incumbent media companies, anchored by their incremental advancements, were slow to respond to this disruptive innovation, which drastically redefined the entire industry (Kumar & Robertson, 2018).
Artificial IntelligenceThe rapid advancements in artificial intelligence (AI) further exemplify the shortcomings of the Three Horizons model. Many companies categorized AI as a Horizon 3 technology, expecting it to follow a slow, methodical development trajectory over decades (Russell & Norvig, 2010). However, the swift emergence of AI-driven innovations by companies such as OpenAI and DeepMind disproved this assumption, revealing that disruption could happen far more quickly than anticipated. By harnessing the power of deep learning, neural networks, and vast computational resources, these companies achieved breakthroughs that moved AI from theoretical research to transformative applications almost overnight (Sutton, 2019). This Horizon 3 disruption bypassed the traditional linear path expected by many industries, leaving businesses scrambling to catch up with the rapid pace of AI development (Mnih et al., 2015).
The Convergence of TechnologiesThe convergence of multiple disruptive technologies presents another challenge to the traditional Three Horizons framework, further exposing its limitations. The rise of electric vehicles provides a compelling illustration of this phenomenon. Established automotive companies adhered to the Three Horizons model by focusing on Horizon 1 innovations, such as improving internal combustion engines, while experimenting with Horizon 2 hybrid technologies. However, the advent of companies like Tesla disrupted this incremental approach. Tesla's success did not follow the traditional Horizon 3 scenario of gradual, predictable development. Instead, it resulted from converging several advanced technologies, including battery advancements, renewable energy integration, and autonomous driving capabilities (Thiel, 2014).
This convergence of technologies created a perfect storm of disruption that rapidly accelerated the pace of change, fundamentally altering the automotive landscape in ways traditional companies were unprepared to address.
[7]A MORE FLEXIBLE APPROACHWhile the Three Horizons framework offers a helpful structure for organizations attempting to balance short-term and long-term strategies, its limitations in today’s rapidly evolving business environment are evident. Its rigid categorizations, overemphasis on linear progression, and failure to adequately account for the unpredictability of disruptive innovation make it increasingly insufficient for guiding organizations through periods of rapid change.
Disruption, by its very nature, defies the orderly progression suggested by the Three Horizons framework. The rapid emergence of Horizon 3 disruptions—exemplified by innovations like the iPhone, Netflix’s streaming model, and AI—illustrates that organizations cannot rely solely on the traditional timelines and strategies prescribed by the model. In a world where disruptive technologies can emerge and scale at unprecedented speeds, businesses must adopt a more flexible, agile approach to innovation that recognizes the fluidity and interconnectedness of different horizons.
Additionally, organizations must acknowledge the limitations of linear forecasting and embrace a mindset that anticipates rapid, unpredictable change. Companies must foster a culture of agility, innovation, and resilience to remain competitive in the face of disruption. This involves investing in Horizon 1 and Horizon 2 projects and being prepared to pivot quickly when Horizon 3 disruptions arise. The future of innovation lies not in rigid planning but in the ability to adapt to an increasingly volatile and interconnected world, where disruptive technologies can emerge and reshape industries in ways that are difficult to predict. To thrive in an era of rapid technological change, organizations must move beyond the constraints of traditional models and embrace a more integrated, agile approach to innovation that recognizes the unpredictability and complexity of disruption.
DISRUPTION AND THE QUESTION: BUT WHAT IF THE PROBLEM IS NOT KNOWN?In emergent technologies, we often encounter scenarios where the problem we must solve is unclear. Unlike the incremental improvements typically seen in product redesigns, like enhancing an existing espresso maker or refining a ketchup bottle’s design, the real challenge is to create something entirely new—akin to inventing the espresso method itself. This strategic foresight innovation requires a fundamentally different approach from traditional frameworks, as the solution does not yet exist and must be discovered through exploration and creative problem-solving (Manu, 2007).
When dealing with known problems, the typical method usually involves analyzing existing parameters and working within well-established constraints. For example, companies often use traditional economic models to study market trends, focusing on metrics like market expansion potential, social impact, and financial value. These models help businesses detect patterns and draw conclusions based on past and current data (Christensen & Raynor, 2003). Questions like "What is the future of mobile communications?" or "What is the future of advertising on the web?" are frequently addressed by projecting future outcomes from existing trends.
However, we face a scenario where no such precedent exists to frame the question logically when it comes to emergent technologies. The interaction with these technologies reveals latent behaviours that do not fit within any existing model, making traditional analytical approaches inadequate. These approaches rely on rigid frameworks that analyze fluid, complex variables. However, defining and measuring these variables becomes extremely tricky in environments where conditions are rapidly changing. In fact, at this granular level, the investigation itself can influence outcomes (Schmidt & Druehl, 2008). As a result, these systems demand an adaptive learning process rather than a linear, left-brain approach to thinking and analysis.
[8] The Inadequacy of Traditional Models in Addressing Unknown ProblemsDisruption is characterized by an unprecedented increase in technological and social diversity, creating an environment constantly in flux. Each new group of interactions introduces complexity that defies traditional sequential analysis. These emerging micro-signals—small but meaningful shifts in behaviour and technology—are dynamic and often resistant to objective analysis. They require a flexible and adaptive approach that embraces uncertainty and fosters innovation through an ongoing process of exploration and learning (Pisano, 2019). The shift away from rigid models is critical for navigating this unpredictable technological landscape (Manu, 2007).
As discussed earlier in this chapter, while providing a structured method for managing incremental change, the Three Horizons Model falls short of addressing disruptive innovations that arise unexpectedly and alter entire industries. Such disruptions are characterized by nonlinear and often exponential development (Christensen & Raynor, 2003).
DETAILING THE FORESIGHT INNOVATION CYCLE (FIC)To address the challenges of innovation in a world where the problems are not always clear or defined, the Foresight Innovation Cycle (FIC) provides an alternative approach. First introduced in my work “The Imagination Challenge” (Manu, 2007), the FIC framework encourages organizations to move beyond problem-solving based on current challenges and instead embrace exploration of the unknown. In contrast to traditional models that focus on refining existing systems, the FIC emphasizes the need to create entirely new approaches—similar to how the invention of the espresso method revolutionized coffee brewing.
While tactical innovations address immediate needs and provide incremental improvements, true strategic innovation requires a different mindset. It shifts the focus away from enhancing what already exists and toward creating something fundamentally different. The FIC framework encourages organizations to foster collaboration, collective intelligence, and diverse perspectives to drive these groundbreaking innovations. The FIC provides a more adaptive and flexible approach where linear models fail to address unpredictable disruptions. By encouraging organizations to look beyond immediate market needs and cultivate creativity and foresight, the FIC helps ensure businesses remain agile and responsive to continuous and unpredictable changes. The framework emphasizes the importance of collective imagination and collaborative creativity, creating an open-ended, participatory process that brings together diverse perspectives to generate shared visions of the future (Manu, 2022).
The strength of the FIC lies in its ability to harness a group's collective intelligence, creating an environment where unconventional ideas flourish and innovative solutions arise naturally. By integrating various experiences and viewpoints, the FIC encourages participants to push beyond conventional thinking, fostering a space for radical innovation. Its focus on dialogue, co-creation, and collaborative exploration ensures that the futures envisioned are imaginative and deeply reflective of the group’s collective aspirations and concerns (Manu, 2007).
COMPARING THE FIC AND THE THREE HORIZONS FRAMEWORKThe differences between the FIC and the Three Horizons Framework (3H Framework) are noticeable. While the FIC thrives on creativity, disruption, and imaginative exploration, encouraging nonlinear thinking and unexpected outcomes (Manu, 2007), the 3H Framework takes a more linear and analytical perspective. It focuses on managing future evolution in well-defined stages. The 3H Framework values structure and continuity, ensuring the path to future change is grounded in present-day realities (Curry & Hodgson, 2008).
Despite their differences, the FIC and the Three Horizons Framework can be complementary. The FIC injects creative energy into the 3H Framework by introducing visionary, open-ended scenarios into what is otherwise a structured process. At the same time, the 3H Framework provides a solid foundation for ideas generated within the FIC, ensuring that even the most disruptive concepts have a realistic path to implementation. Together, these approaches offer a powerful toolkit for strategic foresight, with the FIC encouraging creative disruption and the 3H Framework ensuring that those innovations can be realized through structured planning. This synergy creates a more holistic and robust approach to exploring future possibilities (Manu, 2007).
BENEFITS OF THE FIC OVER THE THREE HORIZONS FRAMEWORKThe Foresight Innovation Cycle provides a more adaptable and creative approach to foresight than the Three Horizons Framework. As organizations navigate increasingly complex technological and societal landscapes, the FIC offers several key advantages:
1. Holistic and Dynamic Exploration vs. Linear Categorization The FIC begins with signal discovery, allowing for a flexible and nonlinear investigation of potential disruptions and innovations as they emerge (Manu, 2007). In contrast, the Three Horizons Framework relies on linear progression through predefined phases, which can limit its adaptability to the rapid pace of change (Curry & Hodgson, 2008).
2. Imagination and Creativity at the Core The FIC emphasizes imaginative scenario-building, encouraging organizations to ask bold questions and envision future possibilities that push beyond current realities (Manu, 2022). While the Three Horizons Framework acknowledges the need for innovation, it lacks a structured approach to fostering the creativity necessary for transformative innovation (Curry & Hodgson, 2008).
3. Interconnected Process vs. Compartmentalization The FIC operates as an interconnected and iterative process, allowing ideas to continuously evolve and refine as new information is discovered (Manu, 2007). In contrast, the Three Horizons Framework’s compartmentalized approach can miss opportunities to integrate short-term innovations with long-term disruptive possibilities (Curry & Hodgson, 2008).
4. Thorough Opportunity Analysis The FIC rigorously evaluates opportunities from multiple perspectives, ensuring that innovations are creatively envisioned and grounded in practical feasibility (Manu, 2007). The Three Horizons Framework often struggles with resource allocation, leading to overemphasizing short-term projects at the expense of long-term innovation (Curry & Hodgson, 2008).
5. Cultural and Operational Integration The FIC fosters a culture of creativity and long-term thinking, integrating foresight into the organization’s operations more organically (Manu, 2022). In contrast, the Three Horizons Framework often requires significant organizational shifts that can be difficult to implement (Curry & Hodgson, 2008).
6. Adaptability to Rapid Change The FIC’s flexible approach allows it to respond more effectively to rapid technological and market changes (Manu, 2022). With its fixed timeframes, the Three Horizons Framework can struggle to adapt to the fast-paced shifts in today’s innovation landscape (Curry & Hodgson, 2008).
The Foresight Innovation Circle offers a more adaptable, dynamic, and creative approach to strategic foresight than the Three Horizons Framework. By placing imagination and collaboration at its core, the FIC encourages organizations to actively shape the future through exploration and innovation rather than simply preparing for it. The FIC’s emphasis on flexibility and creativity makes it a valuable tool for navigating the rapidly changing technological and societal landscape. It offers a more effective alternative to traditional foresight models' rigid, linear structures (Manu, 2022).
[9]A BLUEPRINT FOR DISCOVERY, IMAGINATION, AND TRANSFORMATIONThe Foresight Innovation Cycle is a framework that combines creativity and structured foresight to help organizations navigate the complexities of an ever-evolving technological landscape. Emphasizing collective discovery and imaginative thinking, the FIC provides a pathway for innovators to transcend existing limitations and actively shape the future. By integrating trend analysis and diverse insights, this method encourages visionary thinking, helping participants actively shape emerging industries and technologies (see Fig.5).
Discovery as the Catalyst for InnovationAt the heart of the FIC is discovery, the starting point for innovation. Discovery is more than just identifying existing problems; it involves actively exploring emerging concepts that can potentially create new industries. The rise of the creator economy—fueled by platforms such as TikTok and YouTube—is an excellent example of this. What was once an unimaginable idea—monetizing personal content—has now transformed into a multibillion-dollar industry.
Through technological advancements and cultural shifts, individuals have become content creators, reshaping economic models and offering new paradigms for engagement and monetization. This kind of innovation exemplifies how the FIC enables organizations to discover untapped opportunities that can radically alter the economic landscape.
Imagination as the Key to TransformationOnce potential opportunities are uncovered, the FIC focuses on imagination, encouraging participants to explore the most far-reaching possibilities. Imagination is crucial in transforming emerging trends into actionable innovations, but this process is not purely speculative. The FIC employs an iterative approach that balances creativity with pragmatism, ensuring that visionary ideas are eventually narrowed into feasible, real-world applications. This balance is essential for creating innovations that are not only revolutionary but also practical and scalable. The iterative cycle of experimentation, refinement, and adaptation allows innovators to test bold ideas without fear of failure, enabling them to evolve their solutions continuously.
The Role of the Behaviour EconomyA significant aspect of the FIC is its attention to the behaviour economy, which emphasizes how platforms like Facebook, YouTube, Amazon, TikTok and Uber have fundamentally changed how people engage with technology. Rather than being passive consumers, users are now active participants, engaging in dynamic two-way interactions with digital platforms. This shift underscores the need for foresight innovation that tracks these emerging behavioural patterns and translates strategic visions into marketable products and services.
[11] By continuously monitoring these signals, the FIC helps organizations anticipate and adapt to shifts in human behaviour, crafting narratives that align with new market demands and societal changes.
Crafting New Narratives Through Experience MappingA core component of the FIC’s approach to strategic foresight is the construction of new narratives through experience mapping. This involves asking critical “what could be possible” and "what if" questions to explore the potential of emerging technologies. For example, what if innovative health diagnostics could be integrated into everyday interactions in the household environment? This simple question could lead to transformative innovations in personal wellness, creating new healthcare models that are more proactive and personalized. Understanding human motivation is central to this process, as it guides the development of experience maps that align new technologies with the needs and desires of users. By staying attuned to these emerging signals, the FIC helps organizations stay ahead of the curve, ready to implement technologies that resonate with the behaviours and expectations of future consumers.
Viability, Platformability, and ImaginationThe FIC’s process of moving from discovery to application involves a critical evaluation of the viability and scalability of new concepts. Take telemedicine and wearable health devices as prime examples. These technologies were once considered novel, yet they have become essential to modern healthcare. Their adaptability to existing systems allowed them to transition from innovative ideas into scalable solutions that improve access to healthcare services. The FIC fosters this kind of iterative innovation, encouraging organizations to experiment, learn from failures, and ultimately bring to market products and services that not only address current needs but are also future-proof.
A New Era of Leadership in Digital TransformationThe FIC also calls for a new kind of leadership—one that is capable of guiding organizations through continuous adaptation and cognitive transformation. In this new digital transformation era, leaders must cultivate an agile culture that embraces uncertainty, challenges established norms and fosters creative thinking. Organizations that adopt this foresight-driven approach are better positioned to react to technological disruption and actively shape their future. By embracing discovery, imagination, and creativity while maintaining a structured approach to innovation, the FIC enables organizations to create meaningful value at both personal and societal levels.
CLOSING THOUGHTS The Foresight Innovation Cycle offers a framework that goes beyond conventional problem-solving. It equips organizations with the tools to anticipate and shape the future rather than merely react to it. The FIC encourages bold thinking by fostering a culture of possibility. These envisioning scenarios are far removed from the present but achievable through collective creativity and innovation. The FIC provides a blueprint for discovery, imagination, and transformation in a world where problems are often undefined. As industries evolve and new technologies emerge at an unprecedented pace, organizations can no longer afford to rely on traditional, linear innovation models. The FIC invites organizations to embrace the unknown, fostering a mindset of curiosity, flexibility, and adaptability. It encourages leaders to cultivate environments where failure is seen as part of the learning process and creativity and visionary thinking are central to the innovation strategy.
The power of the FIC lies in its ability to combine structured foresight with imaginative thinking. This allows organizations to navigate the complexities of the modern world while staying grounded in practical, real-world solutions. By leveraging the insights gained through discovery, imagination, and collaborative exploration, the FIC ensures that the future is not left to chance but is actively shaped by those with the courage and foresight to dream beyond the present. Ultimately, the Foresight Innovation Cycle offers not just a framework for innovation but a new way of thinking that emphasizes the importance of foresight, adaptability, and the collective power of imagination in driving transformative change. This approach allows organizations to create innovations that meet today's challenges and anticipate tomorrow's opportunities, ensuring their relevance and success in an unpredictable future.
[1] The Three Horizons Mapping method, developed by Bill Sharpe and detailed in H3Uni's facilitation guide, is a strategic foresight tool designed to help groups and organizations address complex, evolving issues by envisioning transformative actions (Sharpe, 2019). This method encourages participants to explore the future through three distinct perspectives, or "horizons." Horizon 1 represents the dominant current system, often characterized by structures and practices that may be becoming less relevant in the face of emerging challenges. Horizon 2 reflects innovations that are beginning to surface, responding to pressures for change and potentially disrupting the status quo. Finally, Horizon 3 embodies long-term aspirations, where systemic change takes place, driven by new values and models that could eventually replace the first horizon (Sharpe, 2019). In a typical Three Horizons Mapping session, participants collaborate to map out these horizons, using colored sticky notes to represent different ideas and initiatives across the time scale. The goal is to move from a narrow, present-focused mindset toward a broader future consciousness. Facilitators play a crucial role in guiding participants through this process, helping them recognize both the failures and the opportunities within Horizon 1, while simultaneously identifying early signs of Horizon 3 within Horizon 2 innovations (H3Uni, 2019). This process is divided into two stages: the initial stage focuses on sense-making, allowing participants to map out their insights and explore systemic changes, while the second stage, typically conducted separately, is dedicated to action planning. In some cases, a third phase involving multi-actor mapping may be introduced to broaden understanding by incorporating perspectives from other stakeholders (Sharpe, 2019). The method's strength lies in its ability to help participants not only forecast potential futures but also identify concrete steps they can take toward innovation and transformation in the present.
[2] Adapted from (Baghai, Coley & White, 1999), (Terwiesch & Ulrich, 2009), (Nagji & Tuff, 2012) Gartner
[3] Google, Microsoft, and Unilever demonstrate how leading companies are adopting strategic responses to combat disruption in dynamic and innovative ways. Google leverages external innovation through initiatives like the Google AI Impact Challenge, which provides grants and support to organizations using AI to address critical social issues. This strategy enables Google to align external resources with internal strategic goals, fostering a collaborative ecosystem of social impact and technological advancement (Google, 2019). Microsoft employs a targeted acquisition strategy to stay ahead of industry disruption. Its 2018 acquisition of GitHub—a global platform for open-source development—enhanced Microsoft's capabilities in cloud services and developer tools, strengthening its position in the software development community. This move broadened Microsoft's developer ecosystem and reinforced its long-term strategy for open-source integration and cloud dominance (Microsoft, 2018). Unilever advances its open innovation model through its Unilever Foundry initiative, which invites startups and entrepreneurs to co-develop sustainable solutions and respond to emerging consumer trends. By fostering cross-industry collaboration, Unilever taps into a global network of entrepreneurial talent, ensuring agility in the face of shifting market demands and sustainability goals. This model positions Unilever as a forward-thinking player in the consumer goods sector, reinforcing its commitment to sustainable development and co-created innovation (Unilever, 2020). Collectively, these approaches exemplify how corporations are reimagining traditional strategic models, favouring open innovation, acquisitions, and external engagement as mechanisms to navigate disruption and sustain long-term growth.
[4] Companies from the USA, Europe, and Asia have encountered and addressed the shortcomings of the Three Horizons model in distinct ways, illustrating the challenges of managing simultaneous innovation across multiple horizons. In the USA, Intel faced significant disruption due to its delayed recognition of the transformative potential of ARM-based chips (Horizon 3) in mobile devices. This oversight had a direct impact on its Horizon 1 core business of PC processors, forcing the company to recalibrate its innovation strategy and address the growing interdependencies between its product horizons (Cusumano et al., 2015). In Europe, Siemens sought to transcend the rigidity of the Three Horizons framework by integrating digital transformation initiatives across all horizons simultaneously. Its development of the MindSphere IoT platform exemplifies this approach, as it blurs the boundaries between Horizon 2 (emerging platforms) and Horizon 3 (disruptive innovation). This agile strategy enables Siemens to accelerate transformation and maintain a competitive edge by ensuring continuous evolution across all horizons (Siemens, 2019). In Asia, Samsung illustrates how proactive investment in Horizon 3 technologies can reshape its position in Horizon 1 product lines. By making early investments in OLED display technology—despite initial uncertainty about market demand—Samsung secured a dominant position in the smartphone display sector, transforming its ability to lead in Horizon 1 consumer electronics. This forward-thinking approach demonstrates how companies can mitigate unpredictability in Horizon 3 by embracing speculative, long-term investments (Lee & Lee, 2014). Collectively, these cases underscore the limitations of the Three Horizons model, particularly its tendency to compartmentalize innovation and highlight how companies in the USA, Europe, and Asia have pursued adaptive, cross-horizon strategies to confront this challenge.
[5] Linearity vs. Continuity: To better understand the linear myth, we must contrast the concepts of linearity and continuity. I will use the example of disruption in art and, specifically, the disruption introduced by photography. Linearity suggests a direct, proportional progression, a model that fits well with the artistic trajectory from the Renaissance to the early 19th century (Chua & Desoer, 1987). However, in truth, art's evolution is only partially linear. Conversely, continuity refers to an uninterrupted flow, even if that flow takes unexpected turns. Art history can be seen as a continuum, where even significant disruptions like photography do not break the thread of artistic evolution but transform it nonlinearly. This
nonlinear continuum resembles the behaviour of complex systems in fields like physics and mathematics, where outcomes are shaped by disruptions and shifts rather than smooth transitions. In fluid dynamics, for example, nonlinear systems do not follow straightforward, proportional paths. They evolve unpredictably but remain continuous (Landau & Lifshitz, 1987). Much like these nonlinear systems, art exists in a continuum marked by sudden ruptures that redefine its trajectory and purpose. In the same way that nonlinear systems in physics defy linear progression while maintaining continuity, the invention of photography introduced a nonlinear continuum in art. Photography did not merely enhance existing artistic practices—it fundamentally altered the relationship between the artist and their medium. By freeing artists from the constraints of realism, photography invited complexity and unpredictability into the evolution of art, mirroring the behaviour of nonlinear physical systems (Ogden, 1997).
[6] Spotify and Zoom Video Communications illustrate two profound cases of industry disruption that challenge the applicability of the Three Horizons model. Both companies defied the model's traditional assumptions of sequential development across horizons, demonstrating how Horizon 3 innovations can rapidly displace Horizon 1 incumbents without following a gradual, linear evolution. Spotify redefined the music industry by introducing a streaming-first model that shifted the focus from ownership to access. Before Spotify’s entry, the industry relied heavily on physical media sales (like CDs) and digital downloads through platforms like iTunes. Unlike the gradual evolution suggested by the Three Horizons model, Spotify's Horizon 3 innovation—the streaming subscription model—did not evolve incrementally from existing Horizon 1 models. Instead, it bypassed Horizon 2 entirely, forcing record labels to rethink licensing and distribution strategies almost immediately. The rapid shift from download-based music stores to on-demand streaming exemplifies how Horizon 3 disruptions can emerge abruptly and render Horizon 1 revenue streams obsolete (Mulligan, 2015). Zoom Video Communications disrupted the video conferencing sector in a way that also defied the linear progression of the Three Horizons model. While platforms like Skype and Cisco Webex were established Horizon 1 players, Zoom's entry did not evolve from these existing models. Instead, it leapfrogged Horizon 2 with its Horizon 3 simplicity-driven platform, offering a significantly improved user experience that was immediately embraced during the COVID-19 pandemic. Zoom’s rapid dominance illustrated how a Horizon 3 disruptor can create a paradigm shift in real-time, compelling incumbents to adapt to new expectations around ease of use, scalability, and cross-sector applicability. The adoption of Zoom for corporate, educational, and personal use revealed that the rigidity of the Three Horizons model could not fully capture the nature of disruption driven by global crises and user-driven adoption at scale. Together, the cases of Spotify and Zoom demonstrate that Horizon 3 innovations can bypass Horizon 2 entirely, forcing established players to react in real-time, and ultimately revealing the limitations of the Three Horizons model in predicting the speed, direction, and nature of disruptive innovation.
[7] Tesla’s rise highlights the model’s inability to account for how multiple, overlapping disruptions can magnify one another, creating a far more volatile and unpredictable innovation environment than the Three Horizons framework suggests (Musk, 2015)
[8] The rise of blockchain technology and autonomous vehicles exposes the limitations of traditional models of market prediction and disruption management. Both technologies challenge the assumption that industry evolution follows a linear, incremental path. Instead, they demand adaptive learning processes capable of responding to non-linear, paradigm-shifting innovation. Blockchain technology represents a fundamental shift in the financial landscape. By introducing decentralized governance, tokenization, and smart contracts, blockchain moved beyond conventional financial instruments, rendering traditional market analysis ineffective. Bitcoin and DeFi did not follow the evolutionary logic of prior financial products but emerged as Horizon 3 disruptors—entirely new systems of trust, exchange, and ownership (Nakamoto, 2008). In response, firms like J.P. Morgan developed the JPM Coin, signaling a shift from reliance on state-backed currencies to digital, consensus-driven financial assets (J.P. Morgan, 2020).
A similar break from conventional logic is seen with autonomous vehicles. Traditional models for market entry and consumer adoption proved inadequate in accounting for the regulatory, ethical, and technical complexities of self-driving technology. Companies like Waymo faced challenges in addressing questions of liability, safety, and human-machine interaction, requiring new analytical models to guide development and policy compliance (Litman, 2021). Unlike previous automotive innovations, autonomous vehicles demanded a shift from enhancing product performance to redefining the mobility ecosystem itself. Both blockchain and autonomous vehicles illustrate how Horizon 3 disruptions bypass traditional progression, forcing firms to adopt new strategic frameworks that embrace uncertainty. These cases reveal a shift from predictability to adaptability as a core competency, requiring organizations to engage in real-time learning rather than reliance on past models.
[9] IKEA’s approach to future-proofing its business model exemplifies the superiority of the Foresight Innovation Cycle (FIC) over the Three Horizons Framework. While the Three Horizons model compartmentalizes innovation into distinct phases, IKEA’s strategy reflects the fluid, interconnected nature of the FIC, allowing for continuous engagement with emerging signals and long-term societal shifts. Through its dedicated innovation hub, the IKEA Future Lab (Space10), the company actively explores sustainable living, smart home technology, and circular economy principles. This iterative, signal-driven process allows IKEA to identify weak signals and convert them into transformative innovations, such as flat-pack urban farming kits and AI-enabled design tools, which go far beyond the incremental enhancements characteristic of Horizon 1 thinking (Space10, 2020). Unlike the Three Horizons model, which encourages organizations to focus on sequential evolution, the FIC's interconnected structure allows IKEA to simultaneously engage with immediate needs (Horizon 1) and long-term transformation (Horizon 3). This approach ensures that the company is not constrained by the short-termism of product line extensions but instead remains responsive to broader cultural and technological shifts. The FIC's emphasis on adaptability, imagination, and co-creation empowers IKEA to stay ahead of emerging disruptions, enabling it to shape the future of living spaces rather than simply react to it. This foresight-driven strategy highlights how the FIC’s ability to synthesize weak signals into bold innovation pathways offers a more robust, forward-thinking framework for managing long-term transformation.
[10] Innovation objects are tangible or intangible entities representing the practical embodiment of innovative ideas. These objects include new products, services, processes, technologies, and business models that drive value creation. Their key characteristics are novelty, value creation, and implementation. Innovation objects can be incremental (small improvements), disruptive (market-changing), or radical** (industry-transforming). By realizing these concepts, organizations can leverage them to achieve a competitive edge and foster societal progress.
[11] The rise of the behaviour economy signals a shift from passive consumption to active participation, where users become co-creators of value and experience. Companies like Robinhood, Strava, and Airbnb exemplify this shift by fostering engagement, interaction, and co-creation. Through gamification, social competition, and peer-to-peer collaboration, these companies transform user participation, driving deeper emotional and behavioural engagement. Robinhood redefined the investment landscape by introducing commission-free trading and using behavioural design elements like confetti animations and instant notifications to incentivize frequent trading. This approach turns users from passive investors into active market participants, reflecting how firms in the behaviour economy seek to shape user behaviour rather than merely facilitate transactions (Bhargava & Loewenstein, 2021). Robinhood's use of gamification raises critical discussions on user agency and financial risk in investment decision-making. Strava converts personal fitness tracking into a socially driven fitness experience. Gamified features like leaderboards, community challenges, and social sharing shift users from passive tracking to active competition and community goal setting. By tapping into users' desires for achievement and recognition, Strava builds stronger emotional connections and platform loyalty (Hind & Palacios, 2020). This approach exemplifies how social connectivity can amplify user engagement and motivate sustained participation. Airbnb transforms users into micro-entrepreneurs, blurring the line between consumer and producer. By enabling hosts to personalize guest experiences and respond to feedback, Airbnb allows users to shape the platform’s value proposition. This two-way engagement model drives co-creation, where hosts actively contribute to hospitality innovation (Zervas et al., 2017). Unlike traditional hospitality firms, Airbnb empowers users to become active agents of change, reconfiguring the nature of the hospitality industry. Together, Robinhood, Strava, and Airbnb highlight how the behaviour economy reimagines user engagement. By embedding gamification, social interaction, and participatory design, these companies enable users to become creators, competitors, and collaborators in larger, value-generating ecosystems.
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