Exploring Forecasting, Pathways, Roadmaps, and Scenario Modelling
Business As Usual (BAU) is often assumed to remain stable, but in reality, it evolves as processes change, new technologies emerge, and regulatory environments shift. The Three Horizons Model illustrates this evolution, where existing business models decline while innovative and transformative solutions take their place. Traditional financial processes, such as credit cards, are evolving into decentralised and digital transactions. Meanwhile, advancements in AI, such as LLM-powered Retrieval-Augmented Generation (RAG), are reshaping knowledge management, offering automation benefits but also presenting risks such as knowledge decay and succession planning challenges.
Credit cards revolutionised transactions by reducing the need for cash, introducing fraud protection, and enabling global commerce.
Large Language Models (LLMs) and Retrieval-Augmented Generation (RAG) are transforming how businesses manage information.
Explore example strategic decision approaches based on subject. In time the position's could change depending the environment.
The diagram depicts a transformation process starting from the traditional "Business As Usual". Through the infusion of innovation, this traditional approach shifts to "Disruptive Technology", which, when combined with visionary growth, ultimately leads to a "Transformative Future".
Strategic planning and decision-making involve different approaches depending on the level of certainty, risk, and agency. These approaches—Forecasting, Roadmaps, Pathways, and Scenario Modelling—help organisations navigate complex environments and future possibilities.
Forecasting is based on historical data and established trends to predict future outcomes with a certain degree of confidence. It relies on statistical models and trend analysis to anticipate what might happen under normal conditions.
Roadmaps provide a visual representation of strategic initiatives over time, highlighting key milestones and decision points. They help organisations align resources and set priorities for both short-term actions and long-term goals that has some degree of certainty.
Pathways involve mapping out different potential routes an organisation could take. They consider various scenarios and uncertainties to identify flexible strategies that can adapt to changing conditions.
Scenario modelling is about envisioning a range of possible futures, including unexpected disruptions. It enables decision-makers to consider multiple outcomes and prepare contingency plans, ensuring resilience in the face of uncertainty.
The Three horizons graph illustrates the evolution of financial transactions over time. It begins with the traditional use of cash (representing BAU), then moves through the innovative introduction of credit cards, and finally points towards the emerging digital transactions economy as the future.
This Third Horizons graph illustrates the transformation in digital knowledge systems, tracing the shift from traditional structured data to the emergence of intelligent autonomous agents.
In the early 1900s, walking was the default mode of mobility, the standard for daily life and business-as-usual (BAU). The introduction of horses as a mode of transport marked a disruptive innovation, dramatically improving travel speed and efficiency. However, as technology advanced, the impact of horse-based mobility diminished, paving the way for a more scalable and transformative shift—the automobile. Visionaries like Henry Ford championed this evolution, striving to make cars not a luxury but an everyday necessity. His vision of "a car for the great multitude" revolutionised accessibility and reshaped urban landscapes.
Explore an interactive Miro board that demonstrates the Three Horizons Model. This template provides a visual and collaborative way to understand how traditional business models evolve into innovative solutions and ultimately transform into future, disruptive paradigms.
True innovation requires a proactive stance. Rather than simply reacting to external trends, forward-thinking organisations create the conditions for future success. When you identify emerging needs, invest in game-changing ideas, and empower teams to experiment, you transform uncertainty into opportunity.
Viewed through the Three Horizons lens, the "Coca-Cola Effect" illustrates a brand's extraordinary ability to bridge tradition and innovation. In Horizon 1, the company builds on its legacy with a strong, familiar core that resonates across generations. Horizon 2 captures Coca-Cola's strategic reinvestment and adaptation—its ongoing innovations that respond to contemporary market demands without losing its iconic appeal. Finally, Horizon 3 is about future-proofing the brand through visionary transformation.
Coca-Cola’s brand equity, consumer loyalty, and consistent reinvestment can compound over time, reinforcing brand strength even amid changing market conditions.
The Three Horizons model provides a structured approach to envisioning long-term change in biodiversity conservation. Co-created by Bill Sharpe of the International Futures Forum, this framework helps balance immediate actions with future transformation.
In this video, the Luc Hoffmann Institute team and partners hear from Bill Sharpe himself, exploring how the Three Horizons approach can shape a sustainable future.
This video section illustrates how innovative coding practices and the merging of traditional roles can drive organisational transformation. It demonstrates how integrated technology solutions pave the way for agile, future-ready teams.
Understanding how organisations and teams approach change is crucial for success. The Horizon Negative Mindsets model highlights the challenges faced when moving between different perspectives—between business as usual (BAU), innovation, and future-focused thinking.
Different stakeholders have different perspectives on change:
When making strategic decisions, these conflicting mindsets create tension. The cycle of resistance and pushback between these groups can create delays in decision-making, risk aversion, and slow transformation.
In any organisation undergoing change, multiple perspectives are at play. Below is a detailed look at the stakeholders involved and the tensions that arise between them.
They value stability and have a risk-averse approach. Their focus is on maintaining tried-and-tested practices, often perceiving change as a potential threat to established procedures.
Driven by new ideas, Innovators seek to revolutionise processes and introduce creative solutions. Their approach, however, can sometimes be seen as disruptive or overly ambitious by more conservative stakeholders.
Futurists prioritise long-term vision and adaptability. They are forward-thinking but might struggle with translating their futuristic ideas into practical steps, leading to conflicts with those focused on immediate outcomes.
This is the central hub that balances competing interests. It aims to mediate between the need for stability, innovation, and forward-thinking to ensure that the organisation evolves without losing its core strengths.
BAU views radical change as too risky while Innovators perceive the resistance as obstructive. This tension often slows down the pace of change.
Innovators may consider some futuristic ideas as impractical, whereas Futurists feel that certain innovative attempts compromise the long-term vision by focusing too much on short-term gains.
Futurists' forward-looking strategies can be dismissed by BAU as irrelevant or even "dinosauric," given their strong focus on preserving current successful practices.
The Three Horizons Consensus model integrates insights from the Business Activity Model (BAM) approach with the CATWOE framework. This approach encourages compromise and dialogue between immediate business requirements and future strategic vision, ensuring an optimised outcome.
Furthermore, incorporating process mapping and gap analysis helps translate visionary ideas into actionable plans. This approach not only brings innovative concepts into reality but also eases the transition for resistant or critical thinkers, fostering greater acceptance of change.