Balancing the three boxes

By Michael McKinney via leadershipnow.com   Article

“Vijay Govindarajan has incorporated good principles for managing change into a framework he calls The Three Box Solution. It is a method to simultaneously meet the performance demands of your current business—one that is still thriving—while dramatically reinventing it for the future. It’s about managing preservation, destruction and creation.

In each Box there is a function that needs to be performed to lead a sustainable business:

Box 1: The Present Box – Manage the present core business at peak efficiency and profitability.

Box 2: The Past Box – Selectively forget the traps of the past by identifying and divesting businesses and abandoning practices, ideas, and attitudes that have lost relevance in a changed environment and would otherwise interfere with your focus on inventing the future.

Box 3: The Future Box – Generate nonlinear, breakthrough ideas and convert them, through experimentation, into new products and businesses. It’s not about predicting the future … it is about being prepared for circumstances you can not control.

The Three-Box Solution requires an ability to think and act simultaneously in multiple time frames. Each requires different leadership and you must maintain balance across the 3 boxes. It’s a balance.

Most businesses focus on Box 1 – preservation. And understandably so: the rewards are immediate, it is a known quantity and the risks are relatively low. …

Boxes 2 and 3 are about creating the future. In Box 1 there is a value in sticking to what you have been good at, but in Box 3 you throw it out. The idea is to be building the future continuously instead of waiting until you are forced to do something. By then it is generally too late.

Boxes 2 and 3 are easy to ignore because ‘when you neglect the future today, you don’t see the damage today.'”

 

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