EXPLORING HORIZON THREE! Roger La Salle
In my penultimate business insight the McKinsey’s three horizons was presented demonstrating the unsurprising fact that research has shown that less than 3 percent of executive time is actually spent exploring the third horizon. Yet this is the one most relevant to the longer term survival and growth of an organisation
EXPLORING THE THIRD HORIZON
In many cases business and association conferences engage speakers known as a futurist to present some insights as to what the future may hold. Such people most often deliver interesting and engaging talks, mostly about where technology is taking us and the gizmos of the future, fascinating as they may be. However, the direct relevance of this to your business may be somewhat obscure so perhaps an alternative approach could be considered. This alternative is somewhat more rigorous than the abstraction of futurism and is based on the known mathematical methodology of extrapolation.
In short one of the best ways to explore horizon three and envisage where you business, or perhaps just as importantly your industry sector is heading, is to plot a trajectory curve of the past and extrapolate that to the future. This approach leads to outcomes far more precise than the abstraction of futurism and allows you to make plans to position yourself precisely at the future waypoint.
How can we do this?
The starting point is to first decide what represents your core offering.
McDonald’s is an excellent example. Their core offering is definitely not great tasting and wonderful food, but standardised safe food at an affordable price but most of all with a minimum of queuing time (i.e. convenience).
As competition emerged to challenge McDonald’s they rose to the occasion by expanding their range to match their competitors. Most of all they leveraged their core offering of convenience, by providing customers with drive through service. An extrapolation of this core offering of fast convenient food would have revealed the need to migrate the drive through service well in advance of its initial introduction. Now so firmly has McDonald’s embraced this convenience offering that it is in fact usually much faster to use the drive through service than to enter the shop and get served at the counter.
An extrapolation of the present convenience at McDonalds may now be to offer even faster service, if that’s possible. One wonders how long it may be before an iPhone app will be developed to allow “pre-ordering” and collection via a rapid drive through
“E-queue”, possibly with payment via a direct debit from an iPhone app even before you get to the store.
Another example of this extrapolation approach may be to look at convenience store businesses. What is the core offering of a convenience store, certainly not low price, but convenience of course! Based on an extrapolation of that we would look to offer even greater convenience, and what would that be? Drive through convenience stores, again maybe with a pre-ordering App and even pre-payment?
Use this to foresee the future!
This type of extrapolation approach can be done in many industries. The only requirement is for your management team to be able to agree on your core offering(s) before applying extrapolation as a means to forecast the longer term position of your industry and to thus make plans to address this new horizon.
This is far more likely to provide accurate outcomes than the abstraction of futurism and can be done with your senior team at you next management getaway. You may be amazed at the outcome, an outcome that reveals horizon three and sets you apart from the competition.
Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to one of the world’s largest consulting firms. www.matrixthinking.com