The challenge of leadership has always been about balancing short- and long-term needs. Leaders need to generate business amid never-ending uncertainty and transform organisations and people for whatever comes next. However, if leaders make the right bets, building for the former leads to the latter.
I am constantly intrigued and delighted by the innovative moves made by established and new organisations alike. The levels of ingenuity and agility are fantastic, as are the development strategies for the people and businesses behind them.
Many of these moves can be said to align with the 3 Horizons concept, originally developed by McKinsey and Company: Horizon 1 represents new features that could be delivered in 3-12 months, Horizon 2 is business model extensions that could be ready in 24-36 months, and Horizon 3 represents disruptive products or business models 36 to 72 months out.
I have seen many businesses that started making small shifts to apply existing capabilities in new ways to replace missing revenue during the pandemic. We saw a lot of these in food retail and delivery, in Thailand and abroad.
Established chains like Sizzler set up adjacent businesses to draw in cash. They did many things, but I like the example of their kiosk business. I do not know Sizzler executives’ plans, but these could prove a viable additional business line, and it provides an example of linking Horizon 1 and 2 thinking: building capabilities for now, which could be part of a transformed future business.
Sizzler staff probably needed little in the way of additional training, though Sizzler leadership would have needed to adjust their thinking to cater to new buyers’ needs. They also find themselves using a model that many businesses have adopted in an increasingly crowded, competitive and cutthroat market. In any case, I am sure Sizzler has a Horizon 3 plan that I am not aware of.
Thai AirAsia, meanwhile, has just entered the food delivery business in Thailand, as it did in Singapore earlier this year. From a Horizon 1 perspective, I am sure this was partly to raise revenue while the airline industry is on its knees, similar to how Thai Airways and others have repurposed staff.
However, AirAsia did not stop at Horizon 1. Its leaders took a long look at their industry and planned carefully to transform their business. They made investments that provided the new capabilities they would need, in this case, networks and drivers. They have also created the tech and partnerships they need to compete and shape the future of this business line.
But achieving this business transformation requires a great deal more internal change and capability development because everything is affected. For example, Human Resources professionals are dealing with groups they have never dealt with before. The structure of the workforce and the training they need is very different. There are challenges ahead of blending cultures after the acquisition, etc. All these require new capabilities to be successful.
In my company, we faced the same challenges. I have shared how my people successfully converted our services to the online world. We were honoured with the EdTech Product of the Year award in part for this. Part of our Horizon 1 thinking, it was a response to the crisis and a desire to build things to serve our customers’ new needs. Our Horizon 2 thinking began to manifest in our work in the education sector, not the business sector.
This was a long-term objective that this current misfortune has accelerated. Like every other organisation, we had to build for the present. Simultaneously we had to develop people, services, partnerships and experience for a future that arrived more quickly than we thought it would. It is a work in progress — and I hope you will forgive me if I do not share my Horizon 3 thinking with you.
I think leaders now need to quickly get a firm idea of the capabilities they need now, and the capabilities they will need 12 months to two years from now. There is a good chance nearly every job will need to be executed differently, but research indicates that most of your workforce can be developed to do it.
Be prudent, but invest in your talent and develop them for evolving roles in an evolving future. They will need multiple deep specialties over the years, but more important is building the capabilities to learn and adapt as your future business adapts. You can do this by identifying the correct development pathways and journeys aligned to your predicted business needs.
The 3-Horizon thinking concept was introduced to me by my good friend Professor Bruce McKenzie when we researched Thai Leadership for 2020. We are now in 2021, and the situation is very different from what we anticipated. The findings from our research are just as valid. If you would like a copy, please let me know.
Whether your current initiatives are forever or for survival, your pre-Covid business is gone, and you need to reshape your people and organisation for the future, not the past.
Arinya Talerngsri is Chief Capability Officer and Managing Director at SEAC - Southeast Asia’s Lifelong Learning Center. She can be reached by email at arinya_t@seasiacenter.com or https://www.linkedin.com/in/arinya-talerngsri-53b81aa. Talk to us about how SEAC can help your business during times of uncertainty at https://forms.gle/wf8upGdmwprxC6Ey9