The Three Horizons Framework is applied in many, different sized organizations – it’s versatile, even we use it. That’s what inspired me to write few thoughts about in the first place. As it goes that for us, the first half of the year has been about building our very own path even for Horizon 3 (have a peek here).
Before I dive into this blog posting itself, you may wish to revisit the previous parts based on the framework.
- first part: ‘The Three Horizons Framework: Strategy Execution Meets Experimentation‘
- second part: ‘The Three Horizons Framework: Strategic Business Planning meets Resource Allocation‘
In this third and final part, I’ll now elaborate a bit more on the human side of executing those strategic Horizons. How to balance the skillset of people, competence, and motivation, with the different Horizons and with the long-term vision? What are some of the practical organizational and cultural aspects to consider?
The Organizational Aspect – Who Works on Which Horizon?
Not long ago, I had a chat with my colleagues about this: how do you organize the work for the different Horizons. It just happens to be so, that it is very hard – if not impossible – to have the same people working on the different Horizons. Why? Well, Horizon 1 is about running the current business as efficiently as possible. Horizon 3 for example, in turn, is something that has little to do with how things are currently run. It’s more about quick experimentations, trials and errors, seeking, searching, and learning. These Horizons have very different velocities, different cycles of impact, different learning curves.
It also comes down to capabilities, skills, and individuals’ desires. Depending on how far you are reaching (which Horizon you are working on), you need a different set of skills, and a different mindset. It is rarely that the same people can, or even want, to be part of all Horizons at a given time.
In terms of organizational setup then, what to do? Again a rough oversimplification, just to state my case: consider keeping the different Horizons separate even in your organizational structure. Horizon 1 would be the process-optimizing efficient line organization, Horizon 2 perhaps a business development function, and Horizon 3 perhaps led via autonomous innovation programs and/or skunk works. This ensures a steady working environment for the current quality and efficiency focused operations (Horizon 1), while simultaneously giving room for creativity within the far-reaching Horizon 3 endeavours.
Many organizations, of course, look outside their own organization for added support of the new futures, because the skills and management required will be so different. Nothing wrong with that. I’ve repeatedly argued that there are some 7,5 billion people outside of your organization, and many of them are pretty smart.
The Cultural Aspect
While building the capabilities for working on the different Horizons, and especially if you still decide to build the teams within your existing organization, communication about the why and how is key. There are stories of organizations that haven’t fully realised this, and subsequently caused a lot of questioning. Ultimately, ending up hindering the progress rather than accelerating it. Once again, it will be very different working on those Three Horizons. Needs will be different, tools and methods are different, people are different, expectations are quite different indeed.
For a very simple illustrative example: if your job is to make sure that the customers of today are served properly, you simply can not concentrate on something that might happen in 15 years time. Unless you then fully understand the difference between Horizon 1 and Horizon 3 – and the high importance of both – it may also be hard to accept some of your colleagues having their feet off the ground, talking about loose visions and experiments only.
The different Horizons share a common target, but they have a very different role in building the path towards that target. Let people know that.
5 Things to Consider
Whether you are a CEO, COO, CIO, or VPX, consider these at least:
1. Not everyone in your organization (or in your management team) needs to be a futurist or an innovator. Of course, you all can still broaden up your thinking e.g. via these great questions by The Fast Company. Don’t get stuck on what is possible NOW. Look past that. Stay curious. Enable that foresight and futures thinking, encourage it.
2. It might be a good idea to build separate teams or even separate businesses for focusing on the different Horizons. One more practical consideration: perhaps the current business organization needs to be the owner of all support functions, whereas a free-of-corporate-overhead Horizon 3 unit only acquires selected services from them. This way, even if not fully a skunk works model, the future-oriented guys only get to acquire what they need, and the current business can concentrate on being efficient.
3. Establish, or be part of think-tanks, hubs, accelerators, and so on, if possible. Or maybe you are in a position to start one up within your own organization? Hubs and such can be a very easy ground for quick trials and pilots. Be careful, though. Not all people who are interested in such work, should participate in such work. For one, Horizon 3 especially is also about new types of risk, and I think this risk should also be present for the people. It comes down even to different compensation models.
4. Always be aware that the concrete outcomes of the work along the different Horizons are very different. Be ready for some open discussion. You might also be looking at a situation of abandoning your current business all together in the end, which will bring in very tough questions.
5. Do keep your finger on the pulse at all times. Once you’ve set your first set of the framework for Horizons, you need to constantly realign, and check the direction is continuously valid. Look out for those wild and fast, often disruptive changes in your business environment. Remember that it is about building foresight, it is never about precise predictions of future.
For Inspiration and Further Reading
McKinsey wrote in 2015 about tips on how to lead through the change – this becomes relevant when the steps between the Horizons are being planned and done.
How to keep all the Horizons as true part of your organization and culture, or not to too much “isolate” them, you might consider this article by Inc: “If you outsource your innovation efforts, you will end up with concepts that will not be accepted by your existing culture“. That surely is something to consider, but the question here is again, which Horizon are you building, and how and when will your Horizons 2 and 3 become mainstream.
This Forbes article, in turn, outlines why building a community around the Horizons work could be an asset. In a way it’s pretty simple, providing the common target for each Horizon.
Harvard Business Review writes nicely about how to manage a multi-party innovation ecosystem (might require a login).
And lastly, why is it important to take risks? Especially in a product based market, this Forbes article nicely demonstrates what many of us know: “if you don’t make your product obsolete – someone else will“. Being a game changer means you have to be bold…
Finally, feel free to have a peek at my presentation for CEIBS (China Europe Business School) in November 2016, under the topic ‘Business Models: Trends and Transformations in Finnish Companies‘. Thinking behind these is also based on the Three Horizons framework:
In case you got questions or comments, join in the discussion in Twitter #3Horizons, or please leave a comment here! Looking forward to reading them.
#Foresight #StrategicForesight #Future #3Horizons