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The Three Business Management Horizons All Executives Must Juggle with Ease

To ensure the ongoing success of their company, every business leader must excel at keeping their eye on three important business “horizons” at the same time. This can be tricky to do but all effective leaders/leadership teams manage to find a way to do it. Let’s take a closer look at what these horizons are as well as the business-critical questions that frame them.

  

Horizon/Question #1: Are we doing the RIGHT things right?

What this horizon is getting at:

Once you have your strategy and business model straightened out, the next challenge is to define (a) the critical activities (i.e. processes and projects) you need to have in place to put your strategy successfully into motion, and (b) the level of performance these activities must achieve to produce the results and outcomes spelled out in your strategic and annual plans. This horizon is all about confirming that your company is doing what you said you were going to do in your strategic plan so that you’ll be optimally positioned to answer the question associated with business horizon #2.

SUMMARY: Horizon/Question #1 is designed to confirm that your organization is putting your strategy and business model into action as planned.

 

 

Horizon/Question #2: Is our strategy and/or business model producing the RIGHT results?

What this horizon is getting at:

No one wants to waste time pursuing a strategy or employing a business model that’s not producing the desired results. Asking question #2 regularly allows business leaders to consider whether their business strategy, including what the organization is focusing on, is actually moving the company forward positively. When the answer is “yes”, that’s great! You’ve received INTERNAL validation that your hypothesis about how your business needs to work and, what you need to work on to produce results, is probably right. However, when the answer is no, you need to dig further to understand what it is about your strategy and/or business model that needs to change if you’re going to achieve the results and outcomes spelled out in your strategic plan.

SUMMARY: Horizon/Question #2 is designed to verify whether your strategy and/business model is indeed producing the expected results.

 

 

Horizon/Question #3: Is this still the RIGHT strategy and/or business model for sustained business growth, success, and competitive advantage?

What this horizon is getting at:

While business horizon/question #2 is an internally focused question, business horizon/question #3 is EXTERNALLY focused. That is, business horizon/question #3 is asking business leaders to consider whether their strategy and/or business model still makes sense given what’s going on currently (and what’s expected in the future) with their customers and in the marketplace. It’s always important to consider question #3 even when you’ve concluded that your strategy and/business model is indeed producing the expected results. If your “expected results” no longer deliver value to your customers and/or stand up given market conditions, you’ll need to make a change for your company to remain successful.

SUMMARY: Horizon/Question #3 is designed to explore whether your strategy and/or business model still works given external conditions (now and in the future).

 

Many business leaders find it challenging to juggle the three business horizons successfully. In fact, most find themselves spending 95% (or more) of their time trying to tackle horizon/question #1 alone. In my experience, the difficulty revolves around the “RIGHT” component of each question. In horizon #1, “right” requires the alignment of key activities with strategy; in horizon #2, “right” depends on the a clear definition of successful results and outcomes for your strategy; and in horizon #3, “right” depends on your ability to assess the current and future fit of your strategy in the external environment.

That’s a lot to get “right”!

However, don’t feel overwhelmed - business leaders can begin by taking two high impact actions: (1) clarify your company’s strategy (including defining strategic objectives, priorities and desired business results and outcomes); and (2) close the strategy-activity alignment gap anywhere it exists.

These two actions, supported by executive commitment to this approach to business management, will go a long way towards positioning business leaders to successfully manage all three business “horizons” for their company.   

 

A Little Less Measurement, A Lot More Conversation

For someone who began their career in strategy management as a Balanced Scorecard practitioner, it might be a bit strange to say this but here goes:

 

In the upcoming year I’d like to see executive teams spend less effort collecting data points and more time talking about what their data is (or isn’t) telling them.

 

Now, don’t get me wrong – I’m not letting anyone off the measurement hook. Gathering performance data is an important activity but sometimes business leaders can take it too far. From obsessing about the “perfect” or best in industry metrics to looking at soup to nuts data sets, I see too many executive teams focusing their energy and resources on collecting results (including junk numbers) rather than investing time creating a collective understanding of the meaning behind the data.

 

In an age where no one has a minute to spare, it’s important that business leaders invest their business management time and effort in activities that have the greatest impact. And let’s be clear – collecting and looking at volumes of data that may or may not be crucial for informed business decision making is not the best use of executive, and organizational, energy.  

 

When it comes to successful business management, the smart place to invest time is in connecting the dots between data points, figuring out what the meaning is, and then deciding what (if anything) to do with that insight.

 

In my experience, the best way to do this is through discussion and conversations.

 

Here are a few steps that executive teams can take to add more meaning-making conversations to their business management activities:

 

1. Focus on a Clear Reason for Measurement

Executive teams often end up looking at huge amounts of results data simply because they haven’t decided on the questions they want the data to help them answer. Questions like “Are we doing the right things right?”, “Are we delivering an experience to our customers that they still value?”, and “Are we building the right employee capabilities for future business success?” all require specific metrics to help answer the question. Lack of clarity in your reason for measurement results in a scattershot approach to data collection and an explosion in the number of numbers you regularly have to look at.  

 

2. Focus on Data Quality Rather than Quantity 

Once you know what questions you want data to help you answer it’s easier to select a focused set of quality metrics and have confidence that they’ll give you the information you’ll need. Looking at a smaller, more manageable number of data points makes it easier to understand the story your results are telling you, connect the dots, and see the bigger picture (and its implications).  

 

3. Use Conversations to Transform Data into Insight

Data without context isn’t that useful and can be misleading. While data is evidence, without context, it’s still open to interpretation. Commentary, analysis, and discussions add context to data and, when many people participate in the conversation, they are able to develop a shared understanding of the meaning behind the data. The process of conversation is critical for transforming data into shared insight that everyone in the organization can then use to determine next steps and make informed decisions with context.

 

 

 

While we can agree that gathering results data is important for business success, I’ve learned that it’s only the beginning. What really enables sustainable business success is the creation of the shared insight that enables informed decision-making across your organization. In a world that seems to be biased towards valuing action over thinking, conversation is often dismissed as a luxury or an impediment to progress. However, nothing could be further from the truth because discussion is often the best route to making faster, higher quality business decisions.

 

This year, why not make a commitment to giving conversation a higher priority in your business management activities?

 

Your reward will be a more engaged team that’s focusing their energy on creating new (and shared) insights that enable the decisions necessary to manage your business more pro-actively moving forward.