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How to navigate short-term and long-term horizons

Understanding decision-making through the lenses of time and human behavior.

Choices are made along various axes. While there’s frequent dialogue about short-term vs. long-term, the real question is: What’s important to me now? What will be important later?

Horizons versus time

One approach to understanding this is by considering different horizons. Many organizations often discuss horizons one, two, and three, inspired by a McKinsey model. This model emphasizes three axes: short-term renewal, mid-term expansion, and long-term reinvention. Traditionally, the idea was to operate these horizons over different timelines, with different people and resources.

Horizons versus priorities

According to a professor’s critique in HBR, the model is partially outdated, primarily because of the rapid pace at which new business models are transforming markets, often driven by technology and digitalization. However, thinking about short, mid, and long-term priorities remains vital. While the specific time frames may be obsolete, the concepts of improvement, expansion, and reinvention remain relevant. Sadly, most organizations struggle to operate on these horizons, often getting consumed by daily urgencies.

Instant gratification

Humans face a challenge in distinguishing between short and long-term priorities, as evidenced by the famous Marshmallow experiment. Young children must choose between one marshmallow now or two if they wait, highlighting our tendency toward instant gratification. Subsequent studies have shown that delaying short-term impulses can influence a person’s competency development. Mark Manson, author of “The Subtle Art of Not Giving a F*ck,” delves into this in his blog post “The Virtue of Delayed Gratification.”

Long term perspective

Interestingly, a follow-up to the Marshmallow experiment suggests that children who trust that long-term promises will be fulfilled are better at impulse control. Thus, self-regulation isn’t just innate or learned – it’s also influenced by the reliability and predictability of one’s environment.

Marrying these insights, one realizes the importance of succeeding in horizon two and three initiatives and nurturing trust in them. Such sentiments are evident in organizations and broader society. Many adopt the mindset: “Focusing on the long-term seems futile, so I’ll prioritize the present.”

In our perspective, making choices isn’t about right or wrong. It’s about awareness. Understanding why and how you decide. We hope this article aids you in making more conscious decisions today.



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