Innovation Lab & Digital Venture Building Playbook

A Horizon 1 project improves or defends the existing business model and is measured against near-term P&L impact. A Horizon 3 venture explores a genuinely new business model that may not resemble — or may even compete with — the core business, and is measured on validated learning and long-term option value rather than this year's revenue.

A common starting allocation is roughly 70% Horizon 1, 20% Horizon 2, and 10% Horizon 3, adjusted based on industry disruption pace and risk appetite. The specific split matters less than making the allocation explicit and reviewing it annually rather than letting Horizon 1 silently absorb the whole budget.

The team is redeployed to the next highest-priority venture in the pipeline or back into the business, and the kill decision is documented with the evidence that drove it and shared across the lab. Treating kill decisions as normal, well-documented outcomes — not failures — is what keeps future teams honest about evidence instead of spinning results to survive a gate.

Two to four weeks is typical for a focused Discover sprint validating whether the customer problem is real and painful enough to pursue. If a venture is still in Discover after eight weeks with no clear evidence either way, that itself is a signal to make an explicit pivot-or-kill decision rather than letting it drift.

An executive sponsor with real authority to allocate capital outside the annual budget process — often the CEO, CFO, or a Chief Innovation Officer with a ring-fenced budget. Reviews chaired by someone without funding authority tend to become status updates rather than genuine advance/pivot/kill decisions.