The Ultimate Guide to Effective Horizon Planning
I’ve used horizon planning for years now, but I only recently discovered that folks like McKinsey do something similar. Horizon planning focuses on strategic goals along distant points called horizons. It is really useful because it rapidly communicates the direction, long-term goals, and flexible yet practical approach to getting there.
In other words, it’s an excellent tool for communicating strategy over time.
The Horizon Planning Structure
The basic structure for horizon planning is to create three different horizons that represent a span of time. Your first horizon will be close to now, and your last will likely be several years away. The middle horizon can be somewhere between the two.
For this article, I’ll refer to these as your now, next, and later horizons.
Now, each horizon has three parts:
- Strategic Theme
- Goal or Threshold
- Elements of Success
Strategic Theme
Your strategic theme is a few words that encompass what this horizon is all about. For example, if you are trying to build a new product, you might have a horizon with a strategic theme of “Rapid market growth” or “Establishing product with core audience.” The intent is to quickly communicate what this horizon is about and help give context to the other elements.
Goal or Threshold
The next element in a horizon is the goal or threshold. Now, that might seem like an odd way to phrase it since goals and thresholds might be at odds with one another, but as you use the horizon planning technique, you’ll see plenty of cases where your goal is to achieve something, and your threshold is to set useful boundaries.
A quick example here would be if you have a goal to support half a million users but a threshold to say that the response times are within 150-350 milliseconds. The threshold of response times acts as a set of boundaries to maintain while accomplishing the goal. Thresholds belong with goals because operating outside of your thresholds threatens your strategy.
However, the goals and thresholds need to be numerical. Goals and thresholds are of little use if you cannot evaluate them consistently. So you may say you have a goal of “Get customers,” but unless you add something like “Get 1000 customers,” you will never know where you stand.
Elements of Success
The elements of success represent a short list of the key elements of your approach or plan to succeed. The elements don’t replace a more formal scope definition, but they do help to establish the key elements.
For a new product’s first horizon of establishing the product, some elements of success might be:
- 20 early adopters use MVP
- 1 outage every 3 months
- Churn rate 1/month
Hopefully, this paints a picture of how they’re used. If you’re familiar with OKRs, you’ll recognize this kind of structure. Elements of success help round out what success looks like without limiting how you can adapt to new information along the way.
Get Alignment with Your Horizon Plan
Communication is hard, and one technique I teach leaders is about communication across three levels of granularity. Horizon planning is a fantastic tool to help with that technique and communication style. Once you have your horizon plan, bring it to your planning meetings, status updates, and similar situations. When questions come up about the scope, or there is a decision about altering the scope, you can use your horizon plan to point out the overall direction, the importance of that goal, and how the change or continuation of that scope is your best plan so far.
Using your horizon plan to help everyone see how today’s step fits into a larger goal makes a huge difference in getting everyone on the same page and moving the conversation to a more productive mode instead of debating minutiae.
Similarly, your horizon plan will show your leadership that you are acting and working strategically and with data to support your decisions. This, on its own, is enough reason to use horizon plans, as they help quickly show you’re thoughtful and thorough.
Use Your Horizon Plan to Pivot
Situations change all the time at work. What was the single most important goal for your department can be replaced tomorrow, and you will need to respond to that. Your horizon plan can help.
Since most horizon plans fit on one piece of paper, it is quick to rethink and rework what is there to adapt to a new situation. Of course, this is just one step in replanning what is going on, but seeing where you hoped to go over the next five years on one page lets you work out the adjustments quickly and then have the plan available to communicate those changes.
Similarly, all plans are guesses, so you may find that what you planned simply doesn’t achieve the goals you laid out. Either your goals, your plan, or some elements of both were wrong. You’ll know something is wrong because you were explicit about your goals and made them observable. You can look at what is happening in reality and pivot based on those findings.
Horizon Planning is a Piece of a Puzzle
While horizon plans are wonderful for quick strategic planning, they shine best at showing a desired trajectory and providing markers along the way so nobody gets lost. What it does not do is get into the detailed plans that it takes to execute or manage staffing or budgets. Horizon planning fits alongside these other efforts but does not replace them.
You may find, though, that when you are equipped with a horizon plan and you walk into a meeting to seek more budget, that conversation goes a bit better since you can show tangible results over the next few years. In other words, even though horizon plans aren’t enough, they reduce friction in most companies.
Another interesting way to integrate horizon plans into your day-to-day work is to build a dashboard that incorporates the major goals and how you’re trending toward them. If you can align your group to that horizon plan, this dashboard will help your groups ask the question, “Will this help us move even a tiny bit closer to that goal?”
Traps and Tricks
You should take a crack at doing a horizon plan as soon as possible. Invent a new product or business and play out that fictional scenario. Get used to making these and talking through your plans. As you get practice, you’ll find these are quick to put together and have a lot of utility. Here are some tips and tricks when you make your horizon plans.
- Avoid turning your elements of success into a task list
- Do put measurable items in your goals and elements of success
- Do build your horizon plan with people you work with frequently
- Avoid using your horizon plan as a performance review tool
- Do use relative metrics for your horizons e.g., Conversions UP 20%
- Do use diagrams in your elements of success when appropriate
- Avoid making your goals and thresholds larger than five items
- Do get agreement that the horizon plan is practical before using it in conversations
- Avoid treating your horizon plan as a commitment
- Do acknowledge when a changing situation prompts a change to the horizon plan
- Do develop ways to observe what you need to when evaluating where you are in your plan
- Do review the horizon plan periodically (Every quarter might be fine to start)
- Do read this other article I wrote on horizon planning