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Manage for the Intermediate Term

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With financial headlines dominated by the recent declines in the stock and bond markets, a creeping sense of economic foreboding has entered into the thought and decision-making processes of managers across the corporate spectrum. As much of economic momentum, on both the macro and micro levels, is often driven as much by the perception of favorable markets as their underlying fundamentals (or lack thereof), this recent shift in market sentiment has the potential to derail, albeit if only temporarily, the hither for global boom-like conditions and market energy of the past year (see Growthink Newsletter July 24, 2007).

For the majority of this newsletter's readership -- those connected with emerging and middle market companies and/or managers within larger organizations pursuing growth initiatives -- these economic alarm bells being shrilly rung from the financial and main street press can, if not carefully monitored, adversely affect perspectives and decision-making processes.

The danger flows from the natural human tendency to over-value the importance of short-term planning, inputs, and results, and perhaps even more interestingly, to also over-value the importance of long-term planning and strategy.

This point was elaborated upon in Geoffrey Moore's recent Harvard Business Review article "Focus on the Middle Term." Moore, most famous for his technology adoption paradigms in his popular work "Crossing the Chasm", stresses the point that the most effective businesses are managed for the middle, or intermediate term -- that often neglected area between the existing "right now" business and the "rosy scenario" long-term. This "Horizon 2" in Moore's lexicon is that window between the current reporting period (Horizon 1) and Horizon 3 -- the long-term "germs of new business" big picture opportunities such a new product introduction, technological innovation, strategic acquisition, corporate re-organization, etc. While timeline on Horizon 2 varies across industries and business circumstances, a good shorthand for how to distinguish Horizon 2 from Horizon 1 and/or Horizon 3 opportunities is by their level of ambition -- they exist somewhere between the transformative hopes and dreams of the Horizon 3 long-term and the prosaic, hard-earned reality of making sales numbers and customer traction today, this week, this month.

To summarize, for a manager the right place to look when distracted by CNBC Chatter Box-types is that place between the end of your nose and the end of the rainbow. Moore's article can be seen here.


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