Facebook’s 3 Horizons
Mark Zuckerberg has revealed Facebook’s 10 year Roadmap at the 2016 F8 Conference and I believe he has shown the way for both market leaders and challengers to stay on top and compete in a hyper competitive world. How … by using the 3 Horizon’s approach of course.
The 3 Horizons of Growth was developed by Mckinsey partners Stephen Coley, Mehrdad Baghai and David White back in 1999 in their book The Alchemy of Growth. It is a framework that has long been used by management consultants was developed further by Silicon Valley innovator and investor Geoffrey Moore in his book Escape Velocity when looking at technology innovation.
Owing to the pressures of public ownership and investor demands, the consultants or super smart in-house strategy wonks have clearly been at work at Facebook over the last year. And good work they have done too. I believe what was presented at F8 offers a new version of the 3 Horizons that should be embraced not only by technology companies but also any organisation searching for growth and managing innovation.
Horizon 1 = Ecosystems
Horizon 1 is all about managing and developing the core business. The types of people that excel here are operations people focused on delivery of current cash flows. For Facebook that is Facebook itself which at more than 1.5 billion users is its core product and monetisation engine.
What’s interesting is that the continued success of the core Facebook product is seen as its extensive and growing Ecosystem of
Whilst the developer community may not be relevant for all companies the ecosystem and partnership thinking is very relevant. A key question to ask yourself is; What is our current ecosystem and how can we develop it.
Horizon 2 = Products
Horizon 2 has traditionally been about building momentum of emerging new businesses. The types of people who thrive here are business builders who are developing new opportunities and whose mission is focused on turning todays revenue growth into tomorrow’s cash flow.
- Artificial Intelligence (AI)
- Virtual / Augmented Reality (VR/AR)
And here they have also taken a buy and build approach with the acquisitions of Oculus Rift in 2014 for $2 billion and Pebbles for $60 million both in the VR/AR space. Facebook has in fact acquired over 50 companies since being founded in 2004 , mostly for talent but also
Facebook clearly sees this as products which they have been developing. They have taken a buy and build approach here. On the acquisition front they have spent $19billion on the messaging platform,WhatsApp in 2014 and $1b on Instagram in 2012. On the organic front they have developed and identified Messenger, Video, Search and Groups as products that are now at scale and that can be focused on being pushed down to Horizon 1 and a ecosystem built around them.
Horizon 3 = Technologies
Horizon 3 has always been the place for the true explorers. This is where visionaries are tasked with creating options for future high growth businesses. It’s both a fun and scary place to be and the level of risk is high but rewards can be even greater.
For Facebook this third horizon is all about:
for new products and technology and will continue to do so.
What other companies can learn from this approach is is when they look to explore Horizon 3 initiatives look towards the opportunities offered by emerging technologies to fuel your future options and do not get too stuck on either product of commercial issues, these can wait for horizons 2 and 3 where people better equipped with a skill set for those phases will start to work their magic.
Managing Horizon’s through Vision
So with all these horizons to manage and investors and the market to satisfy it must be quite a challenging job to be Mark Zuckerberg. The thing that struck me in the keynote though was that whenever a difficult decision needs to be made he could always rely on the vision and simply ask himself if they were achieving this.
Give Everyone the Power to Share Anything with Anyone
The lesson for all of us here is before the strategy work gets going at pace get your vision sorted and if your vision has not been reviewed in a few years or is not relevant in todays world then change it. It seems to work for Marc Benioff and salesforce.com who does this every six months.
Never Been more Important to Plan
My final note is on planning. In the age of agile organisations and development where many people say we cannot predict the future so what’s the point of detailed planning I would say that plans have never been more important.
Yes being open to adapting those plans and iterating on success and failure through a culture of experimentation is key but a plan is still needed. You can argue whether 1 year, 10 year or 100 year plans are the thing to use but all I can say is thank you Mark and your army of strategists for sharing your 10 year plan with us. You have redefined the 3 Horizons Approach and I wish you every luck in achieving your vision… just make sure you look after my personal data.