Three horizons innovation management and Product Ownership

3 horizons

The book “The Alchemy of Growth” (Merhdad Baghai, Stephen Coley, David White) describes the 3 Horizons model that differentiates three levels of innovation and growth.

  1. Horizon 1 is about the core business where the company make its main money. In horizon 1 you won’t do very risky things but innovation is still necessary to optimize the product/service and get ahead of the competition (or to stay ahead of the competition).
  2. Horizon 2 is about the upcoming future business. In horizon 2 companies develop the business models and products/services that should make essential money in 2 to 4 years.
  3. Horizon 3 is about the vague ideas with an unclear future. These are the startup-like ideas and statistically 9 out of 10 ideas won’t make it into relevant products/services.

Every horizon has to be managed differently and needs different optimization criteria (like KPIs), types of people, processes and structures.

Horizon 1

The purpose of the products/services on horizon 1 is not only to pay the salaries and make money for the shareholders but also to finance horizon 2 and 3. The products/services of horizon 1 need a compromise of stability and innovation for optimization. The goal of the optimization is to ensure (or even improve) the market position. The successful products/services need to be improved (and often cost reduction is an important part of this improvement).

The products/services and the market in horizon 1 are well understood and relatively stable. Therefore it is possible to calculate business cases for innovations. Every innovation should have a short payback period and the payback forecast will often match the reality.

Horizon 2

The purpose of horizon 2 is to develop the products/services that will move to horizon 1 in a few years. The innovations of horizon 2 often need new organizational structures and processes. The business model is not yet validated and relevant users needs are still unknown. Therefore detailed long term planning doesn’t make much sense. A rough sketch of the key features and best guess for budget and time (e.g. one team with 8 developers for 6 months) are as accurate as it can get. The details are figured out during the development with short feedback cycles and intense market/customer contact.

For the products/services in horizon 2 there is a high confidence that they will be successful in the market. Therefore minimizing time-to-market is essential. The team should work full time on the product/service and must not be restrained be bureaucratic stage gate processes.

When horizon 1 and 2 are mixed, conflicts will arise and most times horizon 1 wins (since it makes the money). But also in an environment where horizon 2 is isolated from horizon 1 conflicts will occur, when horizon 2 products/services are developed and move to horizon 1. Therefore horizon 1 innovations need a powerful driver (e.g. CEO).

Example: Steve Jobs drove the first iPhone and then the iPad development.

Horizon 3

The purpose of horizon 3 is to obtain and secure options and validate business ideas. In horizon 3 most of the bad ideas should be eliminated and most of the options won’t be exercised.

MVPs, (Minimum Viable Products), prototypes and mockups are king. Often there is no real product development necessary in horizon 3. Within horizon 3 we need to accept that most of our attempts will fail. We need to embrace failure and need to minimize learning cycles.

Product Ownership

Every horizon needs another type of product ownership. According to the three types of product owners Eric may serve horizon 3 best, Jeff may be necessary to drive a horizon 2 innovation and Marty may be best suited for horizon 1 innovations.

December 20, 2014 at 4:53 pm Leave a comment

Agile Scaling Cycle: from SCaLeD principles to practices

The SCaLeD principles ( were well received and gained many supporters. Of course a set of principles is not sufficient to be successful in projects – specific practices (depending on context) need to be used.

When we defined the SCaLeD principles we knew that practices would be needed and that we didn’t want to define another blueprint. So we accepted the gap for the moment.

Later I did a CSM class together with Peter Beck where the participants collected scaling practices. While the participants brainstormed we thought about how to structure the results and came up with the Agile Scaling Cycle (the name came into being during a presentation about scaling I did some weeks later).

The Agile Scaling Cycle is a simple three step cycle. It starts with “reduce dependencies”. Autonomous teams are a cornerstone of agile. Therefore we reduce dependencies between teams as much as possible.

Then we start to work and in the second step of the Agile Scaling Cycle the teams have to coordinate the remaining dependencies.

During the work problems (often pointing at organizational dysfunctions) will occur. These feed the third step of the Agile Scaling Cycle: develop the organization. After that we should have more options to reduce dependencies so we start over again with the first step “reduce dependencies”.

Agile Scaling Cycle.001

We have gathered lots of practices for reducing dependencies during the last decade:

Agile Scaling Cycle.002

And we gathered lots of coordination practices as well:

Agile Scaling Cycle.003

For developing the organization we often work with a transition team:

Agile Scaling Cycle.004

July 13, 2014 at 1:23 pm 2 comments

Coordinating teams with Scrum of Scrums

When multiple teams are interdependent (typically because they develop the same product), Scrum of Scrums is a common coordination practice within Sprints. Here are some tips to make it an effective meeting:

  1. During Sprint Planning identify the features that need contributions from several teams during the upcoming Sprint (e.g. with a dependency matrix).
  2. Focus the Scrum of Scrums meeting around these dependencies. (And dismiss the Scrum of Scrums if there are no relevant dependencies – which is actually a good thing.)
  3. Let the teams with dependencies send one or two delegates to the Scrum of Scrums. The delegates are developers – not the Product Owners and not the Scrum Masters. Delegates may be the same during the Sprint or teams may choose to rotate the delegates.
  4. Find an appropriate periodicity for the Scrum of Scrums. Sometimes a daily Scrum of Scrums is what the teams need, sometimes one or two Scrum of Scrums per week are sufficient. The teams should decide during the Sprint Planning.
  5. Timebox the Scrum of Scrums to 15 minutes if it is done on a daily base (weekly Scrum of Scrums may have longer timeboxes).
  6. Visualize the state of the features with dependencies during the Scrum of Scrums (e.g. with a dependency matrix).
  7. Let one of the team Scrum Masters moderate the Scrum of Scrums.
  8. Discuss three questions (similar to the one used in the Daily Scrum):
    1. What did my team achieve since the last Scrum of Scrums regarding the features with dependencies?
    2. What impediments occurred in my team regarding the features with dependencies?
    3. What do the teams plan to do until the next Scrum of Scrums regarding the features with dependencies?

Also consider alternatives to the central Scrum of Scrums meeting, e.g.:

  • Teams may visit the regular Daily Scrums of other teams if they have a dependency.
  • Teams may visit each other on demand. This is especially suitable in open office settings that encourage communication and cooperation between teams.
  • Teams may form task forces for the features with dependencies. Scrum of Scrums may be established per task force. Over the time of several Sprints patterns regarding the task force members may become visible. These are often good starting points for reorganizing team structures to improve team autonomy.
  • The ideal of the Scrum team is the autonomous team without dependencies. Although a dependency free situation won’t be achievable we strive for reducing dependencies. If we are successful the teams don’t need any coordination meetings during the Sprint.


May 27, 2014 at 10:56 am Leave a comment

ASMM: Agile Scaling Maturity Model

During a presentation of our approach to scaling agile I constructed „Stefans Agile Scaling Maturity Model“ (SASMM, not trademarked) in an ad-hoc fashion: The number of scaling practices you don’t need. It was a joke but I think there might be something behind the curtain.

Let’s start with the Agile Scaling Cycle: We start with reducing dependencies between teams and with the outside context. Then we do some work and need to coordinate the remaining dependencies. During this work we generate insights and detect organizational impediments. These direct us during the further development of the company. The evolved structures and processes of the company give us additional options for reducing dependencies and we start a new loop through the Agile Scaling Cycle. The whole cycle is driven by the agile scaling principles (which are just the agile/lean principles reformulated for scaling; see


The trick here is to reduce dependencies to the point where coordination becomes dead simple. When we went through the Agile Scaling Cycle several times the company should be more mature, teams should be less dependent and in consequence we need very few coordination practices. Therefore the first formula to compute the scaling maturity on a scale from 0 to 10 (the higher the score more mature) could be:

ScalingMaturityLevel = 10/NumberOfCoordinationPractices

Of course some coordination practices are more agile than others. A dependency matrix is less agile than a shared Sprint Review. So we could weight the practices by the additional weight they put on the process. But that would be another blogpost and in the end I’m not convinced that maturity models are valuable.

April 9, 2014 at 10:28 am Leave a comment

Use what works, ditch the rest?

„Use what works, ditch the rest!“ is something that I have heard over and over again regarding Agile. On one hand it sounds logical, one the other hand it feels somehow wrong. And for a long time I didn’t really understand why I felt that way.

In a recent Twitter conversation around that theme Dave Snowden wrote, „if you don’t know why it worked you end up being fooled.“ That statement helped me to understand my gut feeling better.

I think the really important part of „Use what works, ditch the rest!“ is your definition of „works“. Let’s be more precise: Scrum wasn’t made to „work“ in your environment. It is designed to make the organizational dysfunctions visible, so that you can remove them. In that way you shouldn’t expect Scrum to “work”. And if you ditch Scrum since it doesn’t “work”, you ditch an opportunity to evolve the company.

Sidenote: It doesn’t matter if you use Kanban instead of Scrum. Slack time generated by WiP limits doesn’t “work” in most companies either.

Don’t get me wrong: I do not propose cargo-cult dogmatism. In alignment with Dave Snowden you should have experienced agile practitioners on board who know why Scrum and Kanban are designed the way they are and help you understand why something does or doesn’t work in your context. Then you really learn and get the opportunity to improve.

In conclusion the „Use what works, ditch the rest!“ is OK for me, when the definition of „works“ is that our problems become visible so that we can attack them.

March 26, 2014 at 8:05 pm 1 comment

Scrum: Just following the hype?

From time I meet people who say that their management introduced Scrum just because it is a hype. Honestly I doubt that. I have introduced Scrum and other agile approaches since 2000 into various companies and I have spoken to dozens (if not hundreds) of managers. And every manager was able to explain why he wanted Scrum/agile. Sometimes expectations were excessive but I have never met a manager who didn’t know why he wanted Scrum and just followed the hype blindly.

I think the misconception of the employees is caused by a communication fail. As George Bernard Shaw said:

The single biggest problem in communication is the illusion that it has taken place.

The managers know why they want Scrum and normally they even have communicated it:

  • once
  • in an email
  • hidden between a lot of other stuff

And that is just not enough to make a real change happen. Even if employees have read the message there is a lot of doubt:

  • Does the manager really know what Scrum is?
  • Would he really do what is necessary?
  • Was the message just ad-hoc and now there is another most-important thing?

Therefore managers should

  • communicate the intended change (together with the “why”) personally and face-2-face
  • renew the message continuously
  • model the wanted behavior themselves


February 26, 2014 at 12:15 pm Leave a comment

Agile Skalierung: eine Kollage

In diesem Blogpost versuche ich mal eine Sammlung der verschiedenen Sichtweisen auf das Thema agile Skalierung (also der Organisation von agiler Entwicklung, wenn mehr als ein Team notwendig ist).

Scaled Agile Framework™ (SAFe)

Das Methodenframework SAFe von Dean Leffingwell erfährt im Moment viel Beachtung und ist höchst umstritten:

Die deutschsprachigen SAFe-Protagonisten, mit denen ich selbst gesprochen haben, stimmen der o.g. Kritik interessanterweise im Wesentlichen zu. Sie argumentieren aber, dass SAFe trotzdem ein erster Schritt hin zu ein ganz klein wenig mehr Agilität sein kann, dass man SAFe sowieso nicht so implementieren würde, wie es beschrieben ist und dass man direkt nach der Implementierung damit anfangen müsste, es sofort zu ändern (überspitzt: wieder zu demontieren).

Ein SAFe-Trainer meinte, er sähe die größte Gefahr von SAFe darin, dass viele SAFe-Trainer und Coaches Agilität nicht verstanden hätten und daher keinen sinnvollen Einsatz von SAFe sicherstellen könnten. Wer sich tatsächlich für SAFe entscheidet, sollte also viel Aufwand darin stecken, den agilen Erfahrungshintergrund der Trainer/Coaches intensiv zu durchleuchten (das gilt natürlich generell für die Auswahl von Coaches/Trainern). (Vielleicht sollte man sogar prinzipiell immer jemanden mit an Board holen, der SAFe für Unsinn hält :-)

Disziplined Agile Delivery (DAD)

DAD von Scott Ambler hat lange nicht die Aufmerksamkeit wie SAFe erreicht. Das erklärt vielleicht auch, warum es deutlich weniger Kritik dazu gibt.

Large Scale Scrum (LeSS)

LeSS von Craig Larman und Bas Vodde ist eigentlich gar keine echte eigene Methode, weil schlicht das Scrum-Framework für die Skalierung interpretiert wird.

Agility Path

Agility Path von liefert im Gegensatz zu SAFe, DAD und LeSS keine Struktur für skalierte Agilität, sondern definiert den Prozess, wie man zu dieser Struktur kommt. Ähnlich wie SAFe und DAD ist es direkt kommerzialisiert.

Auch bei Agility Path könnte man diagnostizieren “im Westen nichts Neues”. Das, was Agility Path ausmacht, haben Ken Schwaber und andere agile Praktiker schon vor Jahren beschrieben. Man begleitet die Einführung und Ausbreitung von agil kontinuierlich und setzt dafür ebenfalls Inspect&Adapt ein (häufig bildet man ein Transitionsteam dafür).

Enterprise Transition Framework™ (ETF)

Das ETF von Agile42 scheint mir im Grunde fast identisch mit Agility Path zu sein. Vielleicht ist einer der Gründe für die Existenz, dass Agile42 die Scrum-Zertifizierungen der Scrum Alliance anbietet und ein Gegenpol zu Agility Path von der Konkurrenz-Zertifizierungsorganisation schaffen wollte.

We don’t need no new methods

Und dann gibt es noch die Gruppe derjenigen, die meinen, dass man für agile Skalierung keine neuen Methoden braucht und schon gar keine mit Trademarks. Die Prinzipien, die wir für die agile Skalierung brauchen, kennen wir bereits seit Jahren. Die Praktiken für die Skalierung sollten schrittweise passend zum Unternehmen gefunden werden. Inspirieren sollte man sich bei der Suche nach geeigneten Praktiken von der Praxis (z.B. bei anderen Unternehmen) und nicht von Methoden. (Dieser Gruppe gehöre ich selbst an).

Was fehlt?

Wenn Ihr noch Ressourcen kennt, die das Bild vervollständigen, hinterlasst mir einen Kommentar zu diesem Artikel. Ich werde den Artikel dann ergänzen.

February 14, 2014 at 10:58 am Leave a comment

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