Presented first at Product Tank, a division of Mind the Product, in February 2019. Product leadership often requires developing the most compelling vision for a given area, balancing execution needs with demands from senior leaders to constantly innovate. To embody this duality, leaders must not stick in the operational weeds with incremental optimizations. Rather, she/he must balance the long term future horizons to ensure opportunities are not left to the side. The 3 horizon framework, originally developed by McKinsey strategists, provides a guideline for how leaders can think of this balance that must occur between small optimizations and long term vision. This balance is critical not only for product success but also to inspire and motivate teams.

1. © 2019 Michael Rutledge
Product Tank Feb 2019
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Applying the 3 Horizons Framework to
Product Management

2. © 2019 Michael Rutledge 2
I am Mike Rutledge
Hello!

3. © 2019 Michael Rutledge 3
3 Horizons Framework
As companies mature, they often face declining growth
as innovation gives way to inertia. In order to achieve
consistent levels of growth throughout their corporate
lifetimes, companies must attend to existing
businesses while still considering areas they can grow
in the future.
The three horizons framework provides a structure for
companies to assess potential opportunities for growth
without neglecting performance in the present.
https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/enduring-ideas-the-three-horizons-of-growth

4. © 2019 Michael Rutledge
Working in Product with LexisNexis, I was introduced to classical innovation theory.
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My Journey in 3 Horizons
Horizon 1
Innovate on core products for
litigation attorneys
Horizon 2 (my team) Horizon 3
Innovate with an adjacent
customer segment, corporate &
transactional attorneys
Innovate in white space including
facebook chatbots for case
research

5. © 2019 Michael Rutledge 5
Amazon Approach to Small Bach Iterations Within Audible
Amazon, traditionally strongly incremental. We needed
numbers for every iteration.
ITERATION EXAMPLES
1. Better readability of top text and “refine” increased in
better search conversion in 2-3 days effort
2. Improved filters enhanced findability in many cases
3. Membership steps increased the entire retention funnel,
leading to one of the most successful single iterations in
company history

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Audible “Think Big”
Product leadership challenged us to think & test into where it’s going -
to “think big”
Start with a vision, grounded in data.
Member vs. prospect usage, browse depth per purchase, search vs. browse behavior
Research included rapid prototyping with customers and design
hackathon
Break the overall goal down into executable chunks
• Changes to the order of elements on the page
• Design system changes
• Changes to how audiobooks are produced and stored
Iterate to bring it to reality over time

7. © 2019 Michael Rutledge 7
Applications to Product Management
60/40 mindset: Spend 60% of time on
execution of current sprint (Horizon 1)
& 40% split on next 2-3 sprints (Horizon
2) and 1-3 years out (Horizon 3)
Design & Analytics deep dives:
Leverage design and data analytics,
with engineering to support the
horizon 2 & 3 explorations. Rapid
prototyping is critical to validate
approach
Vision document: Create a tactical
vision / strategy document that you
review with leadership every 3-6
months. Make sure the goals are
aligned with business objectives
Reinforce wider mission: Frequently
reinforce with your team how the work
they’re doing in the current sprints
bring us closer to the 1-3 year vision

8. © 2019 Michael Rutledge 8
Common Pitfalls
Focus too much on incremental
OKRs are achieved but they’re not towards real business success
Spend too much time on big changes that are unvalidated and the team can’t build them
Thinking that OKR metrics alone are inspiring to the team
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9. © 2019 Michael Rutledge
Thank you!