Effect Horizon & Decision Making

There is usually a gap between making a decision or taking an action and seeing the outcome or the consequences.

One useful concept to keep in mind when making decisions is the "Horizon Effect", a way to visualise how your choices play out over time..

Imagine you're deciding between:

Option A: (Instant gratification) Indulging in a fast food. This choice provides an immediate spike in satisfaction - it's tasty and convenient, however the long-term consequences can be detrimental.

Option B: (Delayed Gratification) choosing a healthy meals might not be as instant gratifying as grabbing a fast food. But this long-term investment yields benefits over time, though it may seem less appealing in the short term.

Choosing to invest in initiatives like building a Design System or establishing an R&D department may require significant investment at the start with no immediate results. However, in the long term, a design system will save time in building new products and maintaining consistency. Similarly, while an R&D department may initially be costly, the engineers will drive innovation over time, enabling you to stay competitive in the market.

Here the visual representation of the effect horizon on a graph: the x-axis represents time (months / years) ranging from immediate to long term. The y-axis represents the potential positive and negative negative results of a decision (downside and upside.)