Frameworks You Should Know is a series that explores various product management related frameworks. Instead of just telling you the framework (which a Google search can tell you), I’ll be focusing on what makes the framework great and where you should use it.
At the end of the day, your choice of framework to use should depend on your organization and the culture they want to foster. YMMV.
What is the 3 Horizons Framework?
Simply put, it is a way to classify business actions along 3 horizons.
3 Horizons framework
The fundamental principles in play are
- Improve
- Transform
- Innovate
And the 70–20–10 rule, which states:
- 70% of your efforts should be spent on improving existing business lines
- 20% in transformation of those business lines to attract existing customer base and
- 10% in innovating — building new business lines that can attract new customers.
70–20–10 rule in play
One cool aspect of this framework is that you can change the X & Y axis to suit your business needs:
Value delivered in the long term v/s effort required
When should you use 3 Horizons framework?
This framework sits right after your vision is defined.
Trickling down from vision, down to the brass-tacks where you can action the work
Once your product/organization/business unit vision is defined, you can use this framework to classify your approach based on whichever X/Y axis fits your business.
As an example, let’s take a mythical organization (MarketForce) that has a number of product lines (like Salesforce, but not that)
MarketForce’s vision & their initiatives lined up with the 3 horizons
This can trickle down to different approaches for identifying what to work on next.
From their vision, MarketForce can then identify not only the teams but the investments required to fulfil the needs.
Another way to look at this is to consider customer needs v/s value met through MarketForce products. This combination can provide which customer needs are not being met OR are being met through competitor products (at a very high level).
How should you use this framework?
src: https://digitalleadership.com/unite-articles/three-horizons-of-growth/
To avoid duplication of content, please refer to this wonderful article from Digital Leadership.
Personal Opinions
Using this framework at the very beginning of your planning journey can help you create consensus. It can help you gather the right investments, alignments and ownership within the top-levels of your organization.
Additionally, within a single product, you can use this to divvy up backlog efforts. Some backlogs require re-horizoning to get the teams aligned on the bigger goals of the product/organization.
Thank you for reading! If you like this article, please checkout the rest here.