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.
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