Strategy Horizon Analysis Flashcards

An Agile Business Analyst is working with senior leadership to allocate resources for the upcoming year. The leadership team wants to balance maintaining current revenue streams with investing in future growth. Which concept should the analyst primarily use to frame this strategic conversation?

Answer: The Three Horizons framework to categorize initiatives by time-to-impact and uncertainty.

The Three Horizons framework, originally from McKinsey, is specifically designed to help organizations balance managing their current business (Horizon 1) with exploring emerging opportunities (Horizon 2) and creating new ventures for the future (Horizon 3). This directly addresses the leadership's goal of balancing current revenue with future growth.

A financial services company is planning an initiative to explore using blockchain for a completely new, decentralized financial product. This initiative is characterized by high uncertainty and the potential for market disruption, though any significant revenue is likely several years away. Within the Three Horizons model, where would this initiative be classified?

Answer: Horizon 3, as it represents a highly uncertain, potentially transformative new venture.

Horizon 3 is dedicated to creating genuinely new business ventures and exploring disruptive innovations. These initiatives are characterized by high uncertainty and a long-term potential for significant returns, which perfectly describes the blockchain venture.

What is the primary focus of an Agile Business Analyst's work at the Strategy Horizon?

Answer: Providing decision-makers with information to align initiatives with organizational goals.

At the Strategy Horizon, the business analyst's role is to support high-level decision-making. This involves providing analysis on the business context, risks, and opportunities to ensure that the initiatives selected for investment are the ones that will deliver the most value towards the organization's strategic goals.

Which of the following activities is MOST characteristic of work done within Horizon 1 of the Strategy Horizons model?

Answer: Optimizing the checkout process of an existing e-commerce platform to increase conversion rates.

Horizon 1 focuses on maintaining and defending the core business. Activities in this horizon are typically incremental improvements and optimizations to existing products, services, and processes to maximize current profitability and efficiency. Optimizing a current checkout process is a classic Horizon 1 activity.

A product team is assessing a list of potential initiatives. One initiative involves expanding their successful software product into the Latin American market, which would require significant localization and some new features. How would an Agile BA categorize this using the Three Horizons model?

Answer: Horizon 2, because it involves extending an existing business into an emerging or adjacent market.

Horizon 2 involves nurturing and building emerging businesses by extending current capabilities into new areas, such as new markets or product lines. Since this initiative takes a successful existing product and expands it to a new geographic market, it fits squarely within the definition of Horizon 2.

When applying Agile Business Analysis principles at the Strategy Horizon, which principle is demonstrated by helping decision-makers understand the organization's current capabilities and the external market context before committing to new initiatives?

Answer: See the Whole

The 'See the Whole' principle in Agile Business Analysis is about taking a holistic view. At the Strategy Horizon, this means helping decision-makers understand the entire context, including the organization's internal strengths and weaknesses and the external market landscape, to make well-informed strategic choices.