A specific focus in a strategic plan for how best to allocate resources across three investment horizons which enables simultaneous management of optimization and revenues, innovation, and disruptive innovation. The three different investment horizons each promise a return in a different time period: H1 – Investments are expected to contribute to materials returns in the same fiscal year in which they are brought to market, thereby generating today’s cash flow; H2 – investments are expected to pay back, but not in the year of their market launch; H3 – investments in future businesses that will pay off in the out years beyond the current planning horizon. The organization design to support this strategy is referred to as an ambidextrous organization design. Often H3 investments require protection from criticism or poaching by H1/H2 initiatives as the H3 strategies have more uncertainty and risk attached to them.
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