An ideal organisation should divide its research and development (R&D) resources into three different horizons with different proportions. The three different future horizons all have their own focus, which need to be approached with different methods.
All horizons also have different types of problems and solutions, but what is key to them is that a clearly defined problem or a solution varies: in more well known horizons there is more clarity, while the horizon furthest away in the future might have none. What is DARPA then, you may ask? Read on!
The First Horizon – Traditional R&D
The first horizon is the most traditional one, looking and concentrating on the organizations core functions. R&D focus is in new versions and more efficient use of ecosystem. This horizon solves existing problems, often with well-known solutions and its methods include waterfall, RFI and RFP. The development cycles are long and operational excellency is important. This horizon should receive 70% of R&D resources.
The Second Horizon – Growth and New Products
The second horizon concentrates on growth and the R&D focus is in new products, markets, models and capabilities. This horizon has known problems, but it doesn’t necessarily have well-defined solutions. We are dealing with the new, which isn't fully known yet. Methods are agile and new, and development happens with partners in cycles lasting 1-4 weeks. R&D input in this horizon should be 25%.
The Third Horizon – Disruptive Innovation
The third horizon is the most revolutionary in which new innovation happens. Its sole focus is a future where there are no known problems or known solutions. The future is only an immense possibility. The R&D focus is in disruptive, new, and radical ideas. Development cycles are measured in days. Methods include co-innovation, rapid prototypes, divergent and lateral thinking, lean innovation, and yes–DARPA.
R&D input in this horizon should only be 5%, but these are the most critical percentages R&D can be allocated to.
A Little Bit of DARPA
DARPA way of working is truly disruptive and revolutionary – yet proven as they have invented computer networking (later the Internet) and graphical user interfaces. There are no milestones or methods in DARPA projects, only the goal. In addition, there is a project budget, which has been approved for the goal, but it’s not followed during the process. There are no peer reviews either, only the project team with full autonomy to achieve the goal.
It is too often that organizations forget the third R&D horizon when the 5% allocated to it can entail the seed for a breakthrough innovation. Start-ups often work according to DARPA principles but they do it because they have to, not because they have a choice. Large organisations have a choice but they don’t do it because they think they don’t have to. There are exceptions to the rule. For example, Google has its own “DARPA department” called Google[x], which is described by Wikipedia as “a semi-secret facility […] dedicated to making major technological advancements”.
My three pieces of advice for organisations wanting to expand their R&D horizon thinking are:
Study and learn from the DARPA reports and use their methods as models in your organisation.
When you start a horizon three level R&D project in your organisation, organise it well and recruit the most competent persons to it.
Get a commitment from the top management. If you don’t have it, work on it until you do.
And remember, don’t waste too much time on trying to define the problem nor the solution, just act towards creating a solution or an innovation.
Good journey, may the DARPA principles be with you!