Organizational and Strategic Perspectives in Three Horizon Planning

The future belongs to those who make it. All the trends and black swans in the world are impacting the shared trajectory businesses and their customers are on. Given the quest for ongoing relevance and long term resilience, businesses are the world are looking to digitally transform to renew and reinvent themselves as the pace of change has never been so high. With the mandate for continuous renewal and reinvention, companies are looking for options to extend and defend their core businesses, to build emerging businesses and to create viable options to transform themselves. In order to drive and govern the focus on all three missions above, there are various frameworks in place to support enterprises. One of the most commonly used is the Three Horizon Framework which aims to manage the innovation and digital transformation portfolios concurrently. 

Myself and my team are engaged with many enterprise customers across Middle East and Africa region and we and our customers are jointly driving amazing innovation and digital transformation projects in different industries utilizing 3 Horizon framework. In some of those engagements, I also observed despite there is a great and heavy focus on products/services (outputs) and timeframes, the focus on strategical and organizational focus on the portfolio enablement/realization is less than it should be as they are the critical inputs and enablers of Enterprise Innovation Strategy. The mission for continuous renewal and reinvention across 3 Horizons requires businesses to look their organization more holistically. They need to change their offerings, their organizational structures and roles, their brands, even sometimes their charters and purpose, the former ones much more frequent than the latter ones. Over a short term or longer term, at the end all of these will have to change and evolve if the organization need to stay responsive to the changing world. This brought me to think more and write this article about Organizational and Strategic Perspectives of Three Horizon planning to add new lenses of different focus required for three horizons beyond timeframes and type of product/service transformations.

There is already a strong tendency and focus to classify projects under three horizons by looking the time frames and type of innovation, whereby Horizon 1 (H1) projects are usually short term focused for current and very near future with a focus of an incremental/sustaining innovation; Horizon 2 (H2) projects are more medium term for near future with focus on breakthrough innovation and Horizon 3 projects are more long term for distant future with a focus on disruptive & transformational innovations. There is nothing to wrong with this approach ( just to be clear all of them should be run in parallel despite different time frames) but we need to add organizational and strategic perspectives (beyond time frames) to these three horizons to make the picture complete. 

Let me start with Strategic Perspectives. In H1 projects, the strategic focus is Current Growth by securing and optimizing the existing core business. With a strategic goal of extending and defending the core business, the focus of market connection is Current Relevance and the method of market connection is Engagement. When it comes to H2 projects, the strategic focus is Next Growth by extending and expanding the core business while developing options in adjacent markets and looking for breakthrough opportunities. With a strategic goal of building emerging businesses, the focus of market connection is Emerging Relevance and the method of market connection is Renewal. Lastly when it comes to H3 projects, the strategic focus is Future Growth by exploring the unknown, pursuing new territories and trying unproven options for potential disruptions. With a strategic goal of creating viable options to transform, the focus of market connection is Resilience and the method of market connection is Reinvention.

How does these different Strategic Perspectives across three horizons map to Organizational goals and Organizational capabilities? At the very high level from organizational goal perspective; H1 activities aim to achieve performance and optimizations, whereas H2 aiming adapting/building new capabilities and finally H3 activities are aiming to transform the organization. What does it mean from organizational capabilities perspective? Lets start with Character Profiles. For H1 projects, the most important character profile needed are Executers & Optimizers. For H2 projects, the profiles are more Intrapreneurs and Builders. For H3 initiatives, we expect more Visionaries and Mavericks.  From Organizational Skills and their Skills Source perspective; H1 engagements require Expertise in Existing sources, whereas H2 engagements require Building New Skills by Developing whereas H3 engagements require strong Learning skill by Acquiring or Assimilating. The Required Activities are Outcome-Driven Research with a Mind Stateof Close-In Creativity for H1; for H2 the required activities are Discovery-Driven Research with a mind state of Far-Out Creativity and lastly for H3, required activitiesare Open Exploration with a mind state of Imagination.

With an approach to innovation and transformation utilizing three horizon framework; H1 is mainly driven by Execution, H2 is mainly driven by Discovery and H3 is mainly driven by Exploration. To summarize, 3 Horizon framework is the great framework to drive innovation across three horizon but it is very important to note that the approach in three horizons is beyond time frames and types of innovation; but also the focus from Strategic, Organizational and Marketing perspectives differ too and they all need to be taken into account to drive a holistic transformation agenda.

In Microsoft, we have a great program called Microsoft Catalyst, to build, plan, and execute business transformation strategies with a proven, innovative approach from Microsoft Catalyst—an envisioning and planning program that employs Microsoft Dynamics 365, the Microsoft Power Platform, and the Microsoft Cloud. Through a series of activities, an organization—across any industry—builds, plans, and executes business strategies by using a proven, innovative approach. Microsoft Catalyst is based on the IDEA framework, which encapsulates service offerings across four key areas: Inspire, Design, Empower, and Achieve (IDEA). If you want to learn more about that, I recommend you to visit the site here

Businesses will and have to play a big role in shaping the future by planning out highly impactful H1, H2 and H3 efforts that deliver incremental, breakthrough, disruptive and transformative innovations for the future world. But to realize this mission, businesses need to look across disciplines and need to have a comprehensive and holistic approach. Let me finish this article with the very first idea of the article. The future belongs to those who make it. Are you one of those?