NGO Strategy: Conquer the Future by Using the Three Horizons Model

Your future is created by what you do today, not tomorrow." - Robert Kiyosaki

McKinsey's Three Horizon Model is a powerful tool for NGOs to analyse potential future scenarios. It helps organisations identify and prioritise strategic opportunities that might otherwise be overlooked. This can lead to concrete, impactful decisions today.

We love the Three Horizons Model in the Civil Society Academy and use it for strategy processes to help NGOs consider their context and develop their organisations and initiatives towards an emerging future.

Embark on Emerging and Transformative Opportunities – Now!

For example, Kate leads a small activist NGO in Europe with a few thousand loyal supporters who pay a modest annual membership fee. Through trend analysis, Kate has learned about the growing importance of legacy gifts, where large NGOs offer the elderly the opportunity to leave part of their wealth to social causes. Although this trend isn't new, smaller NGOs have yet to capitalise on it.

Based on the membership structure and the three-horizon analysis, Kate and her team recently decided to gradually build the organisation's capacity to secure legacy gifts. Even if only a tiny fraction of members leave part of their wealth to the NGO, this could be transformative—a game changer.

In the context of the three horizons, legacy gifts would fall into Horizon 2 as you start investing today in a resource stream that will benefit your organisation in 3-5 years.

Horizon 1: Optimise and expand existing initiatives to create impact and resources	Horizon 2: Foster emerging new ways to create impact and resources	Horizon 3: Nurture ways to create impact and resources
Focus: Optimise and expand current methods, activities, initiatives and services that are core to the organisation’s mission, ensuring they are delivered effectively and sustainably. 70% Rule: Allocate 70% of organisational resources to Horizon 1.	Focus: Explore, initiate and foster emerging new ways and new initiatives or scale successful ones to create significant impact and resources. 20% Rule: Allocate 20% of organisational resources to Horizon 2.	Focus: Innovate, pursue and nurture transformative ways that could significantly change how the NGO achieves its mission, including radical new approaches or technologies. 10% Rule: Allocate 10% of organisational resources to Horizon 3.
Potential Priorities: 1.       Enhance operational efficiencies. 2.       Standardise and expand successful initiatives. 3.       Improve delivery and impact measurement of existing programs. 4.       Strengthen existing funding sources. 5.       Deepen engagement with current donors and volunteers.	Potential Priorities: 1.       Pilot and gradually develop new initiatives or services that might mature in 3-5 years. 2.       Secure funding for new initiatives. 3.       Develop new fundraising models. 4.       Form strategic partnerships to extend reach or capability. 5.       Adopt new methods or technology for team collaboration.	Potential Priorities: 1.       Invest in research and development for cutting-edge solutions. 2.       Explore disruptive technologies or methodologies. 3.       Cultivate a culture of innovation within the organisation. 4. Seek visionary funding sources for high-risk, high-reward projects

The Importance of Balance

Each horizon requires different resources, management approaches, and timelines. Naturally, the first horizon is always on everyone's mind. However, balancing the immediate needs of Horizon 1 with the innovative and growth-focused initiatives in Horizons 2 and 3 is crucial for sustainable impact. The model helps ensure that while the organisation effectively manages its current operations, it prepares for future challenges and opportunities.

By systematically applying the Three Horizons Model, NGOs can effectively manage current operations while strategically preparing for future opportunities and challenges.

Exercise: How to Apply the Three-Horizon Model

1.      Visualise the Model: Present it on a large board with a matrix explaining the focus, percentage rules, and potential priorities.

2.      Reiterate Insights: Share findings from trend analysis, analysis of allies, organisational assessment, or portfolio analysis.

3.      Brainstorm Priorities: Have participants write potential priorities for each horizon on post-its. This is an individual exercise. Each person writes.

4.      Cluster and Combine: Look at all the ideas, start discussing, and group similar ideas. You can put aside ideas that lack resonance or excitement.

5.      Discuss and Prioritise: Discuss options and prioritise according to predefined criteria. We often use the IDEO framework and its criteria:

• Is it desirable? Do we want it, and would our target group like it?

• Is it viable? Does it have the potential to help us create more impact and mobilise significant resources?

• Is it a feasible option, i.e. is it possible, and can we do it?

6.      Strategic Priorities: Turn the prioritised options into strategic priorities for your organisation.