3 Horizons Insight


By John Barrington

In one of the more insightful interpretations of the 3 horizons methodology, I heard Jonathan Holloway, Artistic Director of the Perth International Arts Festival, inspire an audience as to their responsibility for creative development in Western Australia. Some 8 months prior I had spoken to Jonathan over dinner about the 3 horizons approach to considering strategy in the short-, medium-, and long-term. Clients we have worked with will know that this approach is a very effective way of chunking strategic thinking into timeframes that make implementation not only possible, but effective and appropriately time-bound.

The original research by McKinsey & Co identified that sustainable growth organisations are capable of operating over the 3 time horizons simultaneously. The first horizon of ‘extend and defend’ is about meeting budgets and doing what needs to be done today and in the immediate term. The second horizon is about development from the core and new opportunities that will build on a solid foundation to create enhanced value. The third horizon is about creating strategic options for the future. This works on the premise that any organisation must first earn the right to grow. However, the great challenge then is to continuously work across the 3 horizons concurrently. This requires teams of people who are naturally good at delivering on time, on budget and to quality specifications in the immediate-term. It also requires those who can think in the second horizon and develop the enterprise in new ways. And finally, it requires the visionaries who see the long-term and can conceive of options for future organisational development that will add even more value.

Value, however that may be defined within the Purpose of your organisation, is the key measure of performance against each horizon. With the horizontal axis representing time in years, the vertical axis represents the value that is being created, or destroyed, by organisational performance and delivery.

In Jonathan’s interpretation he spoke of the here and now, which was most apt during the creative feast of international performances that PIAF staged during the 2013 Perth Festival. He spoke of how this year built on the brilliant success of the prior year, his first as Artistic Director in Perth. Finally, and most importantly, he spoke about the third horizon. In our experience, this is where most organisations get stuck. Jonathan created a picture and implored the audience to become involved today so we, as a society, might leave a legacy for the citizens of Western Australia 50 years hence, and beyond. He reflected on how we can look back on the great societies through history and recognise how integral arts and culture had been to times of profound development.

The genius of this was to make people think about how they might leave a legacy in Western Australia’s development for future generations.

What if boards and executives were to consider their roles today as trustees for future generations, bearing the responsibility to create not only better organisations today, but a better society in which not just we, but our descendants can prosper in a richly textured fabric of community.

For more information, please feel free to email me at john.barrington@barrington.com.au.


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