?? What They Don't Tell You About Innovation Investments and How You Should Do It - Template Included
Alan Campos
Global Executive | Helping Leaders Drive Millions in Recurring Revenue Through Design, AI & Digital Innovation
Investing in innovation is not just about allocating funds. It's about strategically balancing risk and opportunity to safeguard your company's future. Yet, many executives find themselves navigating this complex terrain with maps that lead to dead ends. Let me reveal how to smartly invest in innovation across different time horizons.
The Untold Truth About Innovation Investments
Decoding the Innovation Horizon Matrix
The Innovation Horizon Matrix helps us strategically place bets across three different investment categories, each with its own risk profile and time to maturity:
1// Horizon 1 - Immediate Gains: Enhance and optimize what already works. Time: Short Term
Scope: Core Business
Focus: Exploration and optimization of existing businesses
Metrics: ROI, NPV
Team: Maintainers
Capacity: Existing
Investment Focus: 70% of your innovation budget.
Action: Upgrade technology and refine processes to boost efficiency and customer satisfaction immediately.
2// Horizon 2 - Emerging Opportunities: Prepare for the future by developing new offerings that will become relevant within 2 to 5 years.
Time: Medium Term
Scope: Growth Business
Focus: Expanding existing businesses and building adjacent innovations
Metrics: Innovation Accounting
Team: Intrapreneur, Builder
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Capacity: To be developed or acquired
Investment Focus: 20% of your innovation budget.
Action: Invest in research and pilot programs that bridge your current capabilities with future market needs.
3// Horizon 3 - Visionary Ventures: Pioneering ideas that may redefine industry standards.
Time: Long Term
Scope: Future Business
Focus: Exploration of new businesses, small bets on emerging opportunities, radical innovation
Metrics: Innovation Accounting
Team: Explorer, Adventurer, Intrapreneur
Capacity: Uncertain requirements
Investment Focus: 10% of your innovation budget.
Action: Fund exploratory work in cutting-edge technologies like artificial intelligence , quantum computing, or sustainable energies.
This Week's Action Steps
Reassess your innovation investment allocations. Are they in line with the Innovation Horizon Matrix ? Ensure that your strategy not only matches market dynamics but also aligns with your company's risk tolerance and growth ambitions. Make a copy of this template to document your strategy & vision.
And here is a quote from Albert Einstein to inspire you.
"The measure of intelligence is the ability to change"
Whenever you're ready, there are 3 ways I can help you:
1// Apply for the AI for Executives Program and learn how I define, implement, lead, and optimize AI initiatives in traditional companies.
2// Apply for The Execpreneus Program , join this movement with other executives, and learn how to build and grow a six-figure side hustle connected to your purpose.
Building ? performance teams that deliver true digital transformation
6 个月Great insights, it aligns with some strategic management models in terms of where and how to invest in innovation. The question then remains about how to figure out the what, especially for horizon 3