The Three Horizons of Business Foresight

When I work with leadership teams on strategic foresight, one of the first things I do is help them think of time differently. Most organisations plan in annual cycles or three to five-year strategies. However, to build a real advantage, you need to look further ahead – and you need a framework that makes sense of what you're seeing.

That's where the Three Horizons model becomes invaluable.

Why Most Strategic Planning Falls Short

Before diving into the model, let's acknowledge what's not working. Traditional strategic planning assumes that the future will largely resemble the present, with only predictable changes. It's built for times of stability in an increasingly unstable world.

The problem isn't that leaders don't want to think long-term. It's that they don't have a practical way to organise their thinking about different types of change happening at various speeds.

The Three Horizons Framework

The Three Horizons model, developed by Curry and Hodgson (2008), provides a simple yet powerful framework for thinking about time and change. Here's how it works:

Horizon One (H1): The Baseline Future

This is your business as usual – the future of continuity. For most organisations, H1 covers the next 3-5 years. It's where your current strategies are implemented, where you can make reasonably confident predictions, and where most of your operational planning takes place.

H1 isn't about dramatic change. It's about understanding how current trends continue and what that means for your business.

Horizon Two (H2): The Transition Zone

Here's where things get interesting. H2 is the realm of disruption to your baseline. It's typically about ten years out, though the exact timeframe matters less than understanding what's happening here.

This is where most of your strategic foresight work should focus. H2 is far enough away that you have time to prepare, but close enough that you can identify the signals and start building capabilities now.

Most of my foresight clients spend their time in H2 because it hits the sweet spot between being actionable and being genuinely transformative.

Horizon Three (H3): The Next System

H3 is everything beyond H2 – the realm of weak signals that indicate entirely new systems emerging. This is typically 15 years or more, sometimes much longer. Conducting an exercise or two that looks at the next 50 years can sometimes make it easier to identify opportunities and risks that are not as visible in the present. Shopify is working with a 100-year perspective to help them make sustainable decisions in the present.

Most organisations aren't deeply concerned with H3, and that's often fine. But H3 thinking helps you identify the early signals that will eventually reshape H2.

How This Changes Your Strategic Thinking

When you start using the Three Horizons model, several things happen:

1. You stop treating all change as the same. The competitive threat emerging in H1 requires different preparation than the technology disruption brewing in H2.
2. You allocate attention more deliberately. Instead of getting overwhelmed by every trend report, you can categorise signals and focus your energy where it will have the most impact.
3. You build different capabilities for different horizons. H1 needs operational excellence. H2 needs adaptive capacity. H3 needs sensing and experimentation.

Putting It Into Practice

Here's how I use this model:

When scanning for emerging trends and technologies, I tag everything according to which horizon it belongs to; this makes it easier to understand which bucket of actions is relevant.

An H1 signal might trigger immediate competitive intelligence. An H2 signal becomes part of scenario planning. An H3 signal is recorded in our "weak signals" file for monitoring.

The model also helps with project scoping. If you want to dive into the Future of Work 2050, the entire project should be designed around H3 thinking. But when a retail client prepares for the next wave of e-commerce innovation, we focus on H2.

Why Ten Years Works (Even Though It's Arbitrary)

You might wonder why H2 typically extends to ten years. The truth is, it's somewhat arbitrary – and that's fine.

Ten years works because it's far enough out that fundamental change is possible, but close enough that current leaders will still be around to implement the strategy. It's also about as far as most executives are comfortable projecting, especially when they're new to foresight work.

The specific number matters less than having a consistent framework that your entire organisation can use.

Building Your Foresight Capability

If you want to start using this framework, begin as simply as you can. Take your current strategic challenges and sort them into the three horizons.

1. What's happening in your H1 that you need to respond to now?
2. What's brewing in H2 that you should be preparing for?
3. What weak signals in H3 should you be monitoring?

The Three Horizons model won't predict the future for you. But it will help you think about time and change in a way that enables better strategic decisions.

And in a world where the organisations that identify and act on change early build more fundamental competitive advantages, that's precisely the capability you need.