Horizon Thinking

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One of the things that really impressed me when I joined the current startup was the disciplined mindset they had in place, in terms of thinking and planning for multiple horizons simultaneously.  We have regularly scheduled executive “Horizon 1″ and  ”Horizon 2/3″ meetings.  Internal plans and projections often reflect this multiple-horizon thinking. 

This model is described in The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise by Baghai, Coley, and White.  They define the horizons as:

  • Horizon 1: Extend and defend current business
  • Horizon 2: Build emerging businesses
  • Horizon 3: Create viable options

Although, straying from Baghai’s model, we often find ourselves using purely time-driven definitions:

  • Horizon 1: Bottom-line results within 18 months
  • Horizon 2: Bottom-line results 1.5-3 years
  • Horizon 3: Bottom-line results 3+ years

What’s interesting in a wider downturn is that the need to shift more focus onto the short term puts the importance of disciplined horizon thinking even more clearly into focus.  It’s another example of a duality where we may shift one way or the other (short vs. long term), but we must keep our systems for thinking about both in place, or perhaps even strengthen the one that’s being put under stress.

So we may temporarily choose to have less resources on longer-timeframe activities, but that makes good prioritization of those precious resources even more important.  After all, it is these activities that will lay the groundwork for a company to scale its technology, and scale its revenue, to come out of the downturn fundamentally stronger.