AI, autonomy, and digital transformation often dominate defense technology conversations. But as Justin Fanelli, Chief Technology Officer for the U.S. Department of the Navy, points out, innovation isn’t about chasing shiny objects; it’s about structuring how new ideas enter, scale, and coexist with daily mission demands.
On the Oteemo CIO Podcast, Fanelli outlined the Four Horizons model, a funnel-shaped framework the Navy uses to balance optimization, disruption, and long-term scouting. His insights offer valuable lessons not only for defense but for any large organization wrestling with legacy systems, innovation pressure, and limited bandwidth.
We have these four Horizons that we use to ensure that we are getting through that cycle and getting the most yield possible. — Justin Fanelli
Watch the full episode here:
Horizon 1: The Engine of Operations
At the foundation is Horizon 1: The Engine of Operations. This is where the Navy focuses on daily delivery (ship maintenance, IT services, enterprise applications) and the incremental improvements that keep operations running smoothly.
Optimization here means tracking benchmarks, measuring throughput, and applying the “1% better every day” mentality. While not glamorous, Horizon 1 creates the stability needed to absorb new technologies without breaking mission-critical systems.
Horizon 2: Structured Pilots and Disruption
Most organizations fail not because they don’t experiment, but because experiments never scale. Horizon 2 is the Navy’s structured approach to disruptive pilots.
Here, industry partners are invited to tackle Horizon 1 problems directly. Instead of open-ended brainstorming, teams are pointed at concrete frictions: bottlenecks in maintenance, inefficient contracting, and lagging digital processes.
In Horizon 2… instead of saying ‘reimagine the world,’ we point industry at a Horizon 1 problem. Either you can disrupt and divest a current process, or remove friction — Justin Fanelli
This deliberate framing allows pilots to be tested scientifically, measured for yield, and either scaled or retired quickly.
Horizon 3: Opening the Aperture
The top of the funnel, Horizon 3, is about widening the aperture. Here, the Navy scans emerging technologies and industry research, from DARPA experiments to commercial startups and venture-backed products.
Instead of waiting for ideas to trickle down, Horizon 3 proactively scouts where potential disruption could come from, ensuring the Navy is never blindsided by external innovation
Horizon 4: Unlocking the “Unleashed” Teams
The Four Horizons framework only works if people inside the organization are empowered to act. Fanelli emphasizes the role of “Unleashed” individuals, talented, driven personnel who can multiply outcomes when grouped together.
Once Unleashed people find each other, once givers find givers, there’s a multiplying effect. — Justin Fanelli
By identifying and connecting these individuals, the Navy creates self-reinforcing pockets of innovation that push pilots forward while protecting core operations.
Why This Matters for Large Organizations
Every enterprise struggles with the same dual mandate: keep the lights on today while investing in the future. The Four Horizons model translates that challenge into a repeatable operating system:
- Horizon 1 ensures resilience.
- Horizon 2 turns pilots into systematic experiments.
- Horizon 3 scans the market for what’s next.
- Horizon 4: Unleashed teams supply the energy to accelerate all three.
The result is a portfolio approach to innovation that balances stability with speed.
Oteemo’s Perspective: Building the Innovation Funnel
At Oteemo, we see the Four Horizons framework as a blueprint for sustainable transformation. Successful organizations don’t just launch pilots; they build the engineering and delivery scaffolding that ensures those pilots integrate into production when proven.
Our work in infrastructure, DevSecOps, and AI-enabled delivery mirrors Fanelli’s insight: create an aperture for new ideas, but design the pathways that let those ideas flow from test to production without friction. By combining disciplined Agile practices with human-centered design, Oteemo helps enterprises operationalize their own Horizon funnels, balancing resilience, disruption, and long-term vision.
