Innovation Strategy: The Three Horizons of Growth (McKinsey)
One of ways of thinking about innovation strategy is to use the 3 Horizons of Growth developed by Steve Coley at McKinsey.
The framework provides a useful mold to formulate an organization's product and service portfolio strategy. It's a diagnostic tool that allows for evaluating the health of a product/service strategy pipeline and for setting up the alignment of short, medium, and long term (innovation) plans of an organization. The model describes 3 innovation horizons in the following manner:
- Horizon #1: The Core Business that is most associated with the company in its current state. This typically is an established business that requires most of the attention of the company's employees and generates the bulk of the sales volume, cash flow and profit. The focus in Horizon #1 is on "Defending and Extending" the core business and on superior execution.
- Horizon #2: Includes all Emerging Opportunities that could be a variety of new business opportunities that the company has developed, licensed or generated from partnerships and strategic alliances. The focus in Horizon #2 is on leveraging "Positional Advantage" and forcing these opportunities to further prove themselves and gain steam, possibly to become part of the core business in the future.
- Horizon #3: Represents Innovative New Ideas for profitable growth in the future. Focus here is on clustering ideas into themes, sorting out the good and great ideas and feeding them so they can emerge from the Horizon #3 incubator to become Emerging Opportunities.
Source: The Alchemy of Growth, Mehrdad Baghai, Stephen Coley, and David White.
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Edith Ohri, Israel
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New Ventures have only Horizon 3
Why starting with a core business when in new vent...
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marc romano, United States
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3 Horizons of Growth is Still Valuable as a Foundation
This basic framework is very sound. It provides a ...
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Sandy Findlay, United Kingdom
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The 3 Horizons of Growth Help to Decide on Innovation Resources
Excellent model for drawing attention on where res...
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Francesco Cuoco, Italy
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3 Horizons of Growth... Only for Large Companies?
Seems a correct approach for medium- large compani...
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ENRIQUE CARLOS POZO, Spain
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Transversal Innovation
I think the three horizons must be parallels, not ...
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Francesco Cuoco, Italy
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The 3 Horizons for Growth
I think that the model is quite generic. The real ...
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jasmin, Lebanon
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This is only a Theoretical Framework
This framework helps you how to think but not how ...
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Francesco Cuoco, Italy
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Combine 3 Horizons of Growth with SWOT Analysis
@Jasmin: I guess the two methodologies complement ...
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