The Three Horizons model first emerged in 1999. Mehrdad Baghai, Steven Coley, and David White published their book, The Alchemy of Growth: Practical Insight for Building Enduring Enterprises. In every sense, The Alchemy of Growth was a business book. The authors' basic premise was that, to be successful at this point in history, a corporation's senior leaders had to see their business issues and competitive challenges in terms of multiple strategic horizons. Short term profits, mid-range innovations, and long term growth all depend on their metacognitive capability to perceive multiple futures..
In 2008, Andrew Curry and Anthony Hodgson published an article in the Journal of Future Studies that made Baghai, et al.'s assertion clear;
"This paper describes a futures method called the "Three Horizons," which enables different strategic futures and methods to be integrated as and when appropriate...One of the gaps in futures work, at least from a practitioner's perspective, is between the work of scenario builders in constructing a range of plausible and coherent futures, and that of the vision- builders in helping organisations identify a preferable future, based on a set of preferred values, and to act on that preference." ...We outline the use of a futures technique, "Three Horizons", which connects the present with desired...futures...In doing so, it enables the futures analysis to be connected to underlying systems and structures, to the different speeds of change..., and...to tools and processes which facilitate strategic analysis..."
Since its emergence in 1999, Baghai, et al.'s Three Horizons framework has evolved in significant ways. But, for them and the other Thought Leaders who've been shepherding its evolution, this model has never lost it's original imprint. The Three Horizons' theory remains a framework devised for corporate executives to help them learn how to increase their bottom line, react to emergent disruptions, and find a way to sustain their competitive position.
In effect, the Three Horizons model has always been a framework that helps executives answer three critical, yet traditional, business questions:
- How can senior leaders with widely varying backgrounds, expertise, and worldviews come to a shared vision of their present circumstances and their future challenges and opportunities?
- How can these executives successfully suss out the new innovations just over their day-to-day horizons that will very soon emerge in ways that will disrupt their profitability and competitiveness?
- How can these executives work constructively together to face the problems that, more and more frequently, will confound their strategic analyses, and demand that they learn their way together into a future characterized by accelerating complexities?
Here are two Three Horizon visuals that illustrate all this. They show the Three Horizons that, in today's complex world, senior executives must develop the capacity topay simultaneous attention to.
These graphics clearly present a business model that's designed to explain important ideas to senior leaders. In particular, what these visuals say is that, over time, every modern corporation is inevitably going to encounter three important strategic challenges:
Horizon One, which is concerned with the core businesses that the company is currently focused on through its daily operation. This horizon emphasizes those challenges and opportunities that provide the corporation its greatest profits and cash flow. Strategic focus must be on improving performance to maximize shareholder value.
Horizon Two, which encompasses two main strategic issues: First, emerging competitive positioning and investment opportunities that are likely to generate substantial profits in the future, but that could require considerable investment now; and, the emerging innovations and entrepreneurial competitors with new business models that potentially could be viable threats in the immediate and mid-range futures.
Horizon Three, which contains ideas for profitable growth down the road that must be nurtured now; i.e., small ventures such as research projects, pilot programs, or minority stakes in new businesses.
When the Three Horizon theory is defined and explained this way, with these words, this model adds up to good Keynesian economics adapted to the 21st Century's emerging complexity. Useful, but not likely to be transformational.
tlo's 3 horizons' model of organization transformation
TLO's 3 Horizon model is different. Instead of business issues and challenges, TLO's 3 Horizon model portrays a way of understanding and working with the mindset and order of consciousness issues that are the bedrock foundation of each of these three horizons. TLO's 3 Horizon model highlights the need for everyone involved in an organization transformation to be aware of and informed about all the "known," "partially known," and "as of yet unknown" stereotypes, heuristics, presuppositions, belief systems, and mindsets that are controlling and guiding them as they launch their organization's transformation efforts, projects, and programs.
In contrast to Baghai et al.'s Three Horizon business model, which is about trying to actually orchestrate and direct an organization's transformational efforts, TLO's 3 Horizon model is about what individuals and small groups all over the organization must do to get mentally ready to be prescient participants and active leaders of the transformation. TLO's 3 Horizons model of Organization Transformation speaks to the transformational possibilities inherent in key leaders and stakeholders being able to see and work in three different kinds of perceptual universes; the Known, the Partially Known, and the Unknown.
Take a look at this visual, focusing especially on the mindset and worldview issues its points you towards.
Essentially, this 3 Horizons visual offers three hypotheses worth considering:
- TLO's First Horizon encourages people to discover their current mindsets, their habitual modes of perceiving and processing reality. It points Thought Partners toward an effort aimed at discovering and examining the cause and effect assumptions that anchor their every day behaviors. This horizon asks people to question the implicit stereotypes and cognitive heuristics they're currently using to identify and define the problems they choose to see, whether at work or at home.
- TLO's Second Horizon encourages people to reach a little deeper. It asks them to examine the modes of thinking they're using to understand the most confusing and threatening aspects of their world. This horizon asks, "What are you aware of through the background aspects of your consciousness that's either exciting or troublesome for you?. For example, What frames of reference is your pre-conscious mind using to understand the polarizing politics active today in the U.S.? What concerns you the most about the worldwide threats of terrorism that seem to be everywhere? Or, why do you believe what you believe about global warming? Basically, this horizon asks you to question the second horizon mindset that's helping you either interpret or ignore these kinds of issues.
- TLO's Third Horizon asks those who are willing to examine all of the strange new disruptive phenomena that are active on the fringes of their consciousness, to bring these issues forward to see what they're saying that's worth listening to.
Elsewhere, we've said "TLO's 8 Element, 2 Loop, 3 Horizon model of organization transformation is the conceptual framework we've developed...to help us make sense of...our twenty plus years worth of...OT consulting." TLO's 3 Horizon Model of Organization Transformation is an effective way of making sense of any transformational change efforts you've leading.
Once you've actually launched your own organization transformation effort, you soon come to know two things.
- Organization Transformations always involves dynamics that are complicated, paradoxical, and contradictory.
- Organization Transformations take a long time to complete.
This is why knowing up front that there are 8 Elements involved, 2 Loops to attended to, and 3 Horizons of change to navigate makes the challenges more easily understood .