What are the Three Horizons?

February 13, 2023

In this short video, Alex Slawsby of InnoLead, Scott Anthony of Dartmouth College, and Fiona Murray of MIT discuss the “three horizons” concept (sometimes referred to as H1, H2, H3), and how it relates to incremental, adjacent, and transformational innovation.

“H1, H2, H3 generally is a temporal element,” referring to short-term, medium-term, and long-term projects, says Scott Anthony, Clinical Professor at Dartmouth College’s Tuck School of Business and Managing Director at Innosight. “In general, it can lead to you making some mistakes, because you might have something that just takes a really long time, but is a very adjacent move, and confuse yourself into thinking you need to manage it in a different way… Time will sometimes match, but sometimes won’t.”

“H1, H2, H3 language has always been framed in the temporal domain,” says Fiona Murray, Associate Dean of Innovation and Inclusion at MIT’s Sloan School of Management. “The real dimension of difference [with incremental, adjacent, and transformational innovation] is risk… Bringing it back to something really simple, with numbers, can be a useful shared language, but we really do have to get this distinction with time and risk.”

This is the seventh video in our series on “Defining Your Terms.”