I am currently working for a digital transformation client who are very focussed on what they are doing right now. This is perfectly appropriate given market conditions (challenging) and the genuine strength of their business (very good) but it comes with huge risks; what if customers switch to a competitor, what if they lose key staff, what if they face another event like Covid? They will be unprepared because their plans are all based on today. They need to lift their eyes and face the longer term. Or at least they need to dream about what is possible.
I wrote in a previous post that planning with three time horizons is proving to be a very powerful way of framing transformation. It is a very simple idea – just spend a bit of your time thinking about where you might be in 5-10 years time or longer.
I’ve seen such simple ideas work before and they change conversations and language inside organisations. A great example is Jobs to be Done theory; the idea that people don’t really buy your product or service for what it is but for the problems it solves in their lives (and these problems are not simply functional but are about how people feel and how others see them). Three Horizons is a similarly powerful tool because it celebrates what an organisation is doing right now, what they are planning and what they dream of (and fear) in the future.
Let’s step back and look at what digital transformation means for an organisation. We need to separate this from digitalisation which is the introduction of digital data, tools, technology and processes to simplify, automate and scale what a company does.
Digital transformation contains digitalisation but is bigger. It asks us to think about the customer, about how we create consumer experiences, about ways of working (including automation), about how an organisation creates value, and perhaps most importantly about how this is affected by and affects the organisational culture. Digital transformation is one reason for business transformation or evolution and it is essential right now because digital is changing markets, changing what is possible, changing the way we work and changing customer and employee expectations. Its not the only big force of change (think climate, demographics, polarisation) but it’s a good place to start to help us think about these other forces too. By strengthening our ability and mindsets to imagine change, we become more able to tackle a whole range of challenges that we face or might face.,
I use Three Horizons as a way to frame the whole transformation journey. Horizon 3 is the range of possible futures, Horizon 1 the place from where we start and Horizon 2 the bridge between the two; where we invest, what we let go, what remains important from the past?
Here is a summary of how I might explore the current, the soon and the future.
If you are working with a client or your own organisation, spend some time dreaming about Horizon 3, documenting Horizon 1 and then use Horizon 2 to create a bridge to the future. If you want some help, get in touch.