Three Horizon Model

The three horizon model is attributed to Mehrdad Baghai, Stephen Coley, and David White, “The Alchemy of Growth”, New York: Perseus Publishing, 1999. The idea that we are going to employ here is simply to separate operations from tactics from strategy. Operations is referring to the present and the immediate future. Strategy is determining the direction of future business. Tactics is what brings us from today’s portfolio to tomorrow’s portfolio.

Strategic considerations and decisions live in the horizon three. They are determining future directions. We need a vision of where we want to be in relation to market, customer and environment in future.  

Operations or execution is handling the daily business. The scope is from daily to a couple of weeks to couple of months into future. This may depend on the business. The execution is often not touched by big strategic visions that shall become reality in a couple of years. That’s fine. It is the job and the business of the intermediate layer, that tactical guys to connect execution to strategy, i.e. give guidance how to develop todays operation in to the future state. To be precise: it is theri responsibility. Execution earns the money. Execution need to be guided. Guided, not controlled or pushed around.

The three horizons model daily focuses on time. There is however a content component included. This component discriminates strategy, tactics and execution/operation. You will find a similar idea behind Investment Horizons.