Standard : Horizon Investment Mix
Description
Horizon Investment Mix measures the distribution of investment across Horizon 1 (core), Horizon 2 (adjacent), and Horizon 3 (innovative/new) initiatives. It ensures a balanced portfolio that sustains the present while exploring the future.
How to Use
What to Measure
- Total spend, effort, or capacity allocated to each horizon.
- Compare distribution to target mix (e.g. 70/20/10).
Horizon Mix (%) = (Effort per Horizon ÷ Total Effort) × 100
Example: 70% of capacity on H1, 20% H2, 10% H3 → Balanced mix.
Instrumentation Tips
- Classify initiatives by horizon at portfolio intake.
- Review mix quarterly with leadership.
- Track trend over time to avoid over-focus on short-term work.
Why It Matters
- Future readiness: Ensures capacity for innovation and exploration.
- Risk diversification: Balances safe bets with long-term growth.
- Strategic intent: Makes investment choices explicit.
Best Practices
- Define clear criteria for each horizon.
- Keep Horizon 3 funded even during downturns.
- Review mix alongside business strategy shifts.
Common Pitfalls
- Allowing Horizon 3 work to drop to zero under delivery pressure.
- Misclassifying work for convenience.
- Failing to reassess horizon classification as initiatives mature.
Signals of Success
- Consistent 70/20/10 (or chosen) mix over time.
- Pipeline of validated Horizon 2/3 ideas ready to pull forward.
- Higher innovation throughput without hurting core delivery.
- [[Innovation Throughput]]
- [[Risk Burndown Rate]]
- [[Value at Risk (VaR)]]