Innovation Strategy: The Three Horizons of Growth (McKinsey)

Disruptive Innovation
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Charles Alter
Consultant, United States

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:
The Three Horizons of Growth model...
  • 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.


Jeff Miles
Business Consultant, Australia

Three Horizons Concept

Great thought prompter. I will use this at my next client meeting as an ice breaker and see what the... Sign up

Edith Ohri, Israel

New Ventures have only Horizon 3

Why starting with a core business when in new ventures many times the business is in the future, i.e... Sign up

Jorge Urrea
Consultant, Mexico

3 Horizons of Growth

I agree with Edith Ohri and, as usually, the article only presents the "what" to do and not the "how... Sign up

Vincenzo Rogione
Management Consultant, Italy

Three Horizons: Why?

Though I appreciate Charles' comment, in my opinion the framework appears conceptually obvious and d... Sign up

Anna hanooman
ICT Consultant, Trinidad and Tobago

Extensions for the 3 Horizons of Growth

I agree with Ohri. In my humble opinion, the three horizons listed are not necessarily engines of in... Sign up

M Y Zainudeen
Management Consultant, Sri Lanka

Three Horizons of Growth is in Practice for Ages

Edith is correct, not only this model is in the school books, it has been practiced in the real worl... Sign up

Charles Alter
Consultant, United States

Three Horizons of Growth Relevant for Established Businesses

@Edith Ohri: admittedly, the three horizons are meant for existing, established businesses with a re... Sign up

simon haafs
Student (MBA), Netherlands

How to Implement the 3 Horizons within 1 Company

I underscribe the model. The challenge is to integrate the the three horizons within one company, es... Sign up

Gary Stead
Director, United Kingdom

3 Horizons : Sources for Ideas for Innovation

It seems the real innovation is in horizon 3. The open question is "Where to hunt for the ideas to p... Sign up

Rajan Johri

Combine the Three Horizons of Growth with the 5 C's of Marketing Strategy

You can augment the 3 horizons with the 5 C's of Marketing Strategy to be grounded into application ... Sign up

Interim Manager, Italy

Balancing Product's Innovations and Future Products

The 3 Horizons combine looking at future products developments and new trends of the market and new ... Sign up

Entrepreneur, United States

Three Horizons of Growth Understandable and Useful Across Sectors / Industries

@Charles Alter: hello Charles, you have explained these critical elements so that I can apply them t... Sign up

Feraidoon Bakhtiari
CxO / Board, Iran

3 Preparation Stages for Horizons of Growth

I like the idea and I share the concepts with participants in my workshops. But prior to that you ne... Sign up

Saeed Khodaee
Director, Iran

Status Quo to Boost Future Plans

@Edith Ohri: undoubtedly, without maintaining the status quo, it might be jeopardizing to jump to st... Sign up

Management Consultant, Kenya

The Three Horizons and Competitiveness

Whereas the main objective of the three horizons is the development of an innovation strategy, its e... Sign up

marc romano, United States

3 Horizons of Growth is Still Valuable as a Foundation

This basic framework is very sound. It provides a solid platform for expansion and application depen... Sign up

Leodegardo M. Pruna
Professor, Philippines

Three Horizons of Growth

The first horizon to my mind is where an enterprise should maintain both a comparative and competiti... Sign up

Sorni Tindanzo Namateng
Student (University), Ghana

Three Horizons of Growth are Practical

Thank you Charles, today is my first time at 12manage and its obvious I've been missing a lot. This ... Sign up

Tadeusz Sudol
Strategy Consultant, Poland

Where to Hunt for Innovation Ideas?

@Gary Stead: The answer is: everywhere, but the process of innovation development has to be structur... Sign up

Raghu Bala
Manager, United States

The Right Distribution of Resources over the 3 Horizons

Businesses struggle with distributing resources to make strides on all three horizons. Resources tha... Sign up

Osama Kamal
Management Consultant, Egypt

Exploring Uncertainity with the 3 Horizons of Growth

It's like these 3 horizons. I will use the model in my own career. In Egypt businesses nowadays have... Sign up


Innovation Strategy: the Three Horizons of Growth (McKinsey)

@Edith Ohri: steps 1-2 are required to generate resources and provide backup in case of failure of s... Sign up

Brijesh Dave
Manager, India

Three Horizon Concept for Challenging the Status Quo

Good concept to generate thoughts to challange the status quo, will talk about this my next meeting.... Sign up

Falk Heinrichsohn
Business Consultant, Portugal

Look out of the Window and see 3 Horizons

The three horizon approach may help with the problem of innovation of companies if management is inv... Sign up

Dr zahra gheidar
Consultant, Iran

Time is Important Point

Certainly, these frameworks are usual steps for establishing a company but, we should consider that ... Sign up

Charles Alter
Consultant, United States

Three Horizons of Growth all about Innovation and Marketing

Thank you to everyone who has replied and shared their thoughts on this subject. One parting thought... Sign up

Aladdien Mohamed
Manager, Saudi Arabia

Don't Focus too much on Horizon 1

Actually I have a comment on stage 1. Organizations should not consider its current form as their ma... Sign up

Jaap de Jonge
Editor, Netherlands

Senior Managers Should Focus on Horizons 2 and 3

That's right, the 3 horizons of growth are especially useful for top managers to remind them of the ... Sign up

Cristina Isenrath
Director, Argentina

Where are the Resources..

@Gary Stead: more looking inside ourselves... To find resources we need to have time to think, to ca... Sign up

Management Consultant, Sri Lanka

Protect your Bread and Butter First

Any business has to ensure first it survives in the short and middle terms and it is the core busine... Sign up

Martin Kerr
Project Manager, Australia

Consistent Context Using Horizons

In our organisation the 3 horizons are standard dialogue. Whilst most people within our organisation... Sign up

Jaap de Jonge
Editor, Netherlands

All 3 Horizons are Important, but...

@Gamanson: all 3 are (equally) important for any business, but but senior / top managers of large or... Sign up

Sandy Findlay, United Kingdom

The 3 Horizons of Growth Help to Decide on Innovation Resources

Excellent model for drawing attention on where resources should be focused. I sometimes struggle wit... Sign up

Francesco Cuoco, Italy

3 Horizons of Growth... Only for Large Companies?

Seems a correct approach for medium- large companies. What about SMEs? Can the same approach give v... Sign up

Julius Belleza
CEO, United States

3 Horizons of Growth Reminds and Helps us Prepares for Change

I agree with Gamanson and Aladdien Mohamed. For business survival, especially in current global econ... Sign up

Charles Alter
Consultant, United States

Three Horizons of Growth at SMEs

@Francesco Cuoco: For SMEs (small - medium size enterprises) the model works, but needs to be scaled... Sign up

Accountant, Nigeria

Consider the Reasons for Growth in 3 Horizons

Business growth cannot be limited to these 3 horizons. We need to critically consider the widening f... Sign up

Olawale Christopher Olamiju
Financial Consultant, Nigeria

3 Horizons Model - A Good Start for the Strategic Planning Process...

No doubt, this 3 horizons model is not cast in stone and it does not necessarily mean that all busin... Sign up

Leodegardo M. Pruna
Professor, Philippines

Time to Spend on Each Innovation Horizon

@Zahra Gheidar: there is no fixed rule on how much time to spend in each horizon. What is necessary ... Sign up


Transversal Innovation

I think the three horizons must be parallels, not serial. The graphic gives an idea of each stage be... Sign up

Entrepreneur, United States

Differentiating Critical Functions and Costs

@Charles Alter: innovation is probably also known as research and development (R&D). This component ... Sign up

Htin Kyaw Myint
Manager, Myanmar

Quite Useful Model for our Organisation

In fact, it is quite a good model for our organization, which is currently declining slowly and coul... Sign up

Entrepreneur, United States

Model for Industries That Have Complex Logistics

This model would be interesting to translates into businesses such as the food service industry, whe... Sign up

Dr zahra gheidar
Consultant, Iran

Length of Horizons is Vital

Certainly measuring a precise, definite time and degree in each horizon is unreasonable, but it is s... Sign up

John Moses
Manager, Nigeria

3 Horizons Model is about Strategy Stages

Looking at the three horizons, it is all about different strategies deployed by organisations at dif... Sign up

Francesco Cuoco, Italy

The 3 Horizons for Growth

I think that the model is quite generic. The real issue from my side is to understand: is the 3 Hori... Sign up

Charles Alter
Consultant, United States

Stabilizing Current Business can be hard in case of Disruptive Innovations

@Francesco Cuoco: I think that's exactly the point of the three horizons model. Companies must first... Sign up

jasmin, Lebanon

This is only a Theoretical Framework

This framework helps you how to think but not how to do it! I still believe SWOT analysis is more us... Sign up

Francesco Cuoco, Italy

Combine 3 Horizons of Growth with SWOT Analysis

@Jasmin: I guess the two methodologies complement each other. Use the 3 horizons as baseline, ident... Sign up

Ionelia Iftimie
Director, Romania

3 Horizons of Growth

I think this proposal would be an interesting start for developing innovation by developing creativi... Sign up

Management Consultant, Australia

Broader Horizon Scanning

@Gary Stead: Other (related) Industries, Research and Trends in the Market are all sources of ideas ... Sign up

Rick Mueller
Professor, United States

A Quick Reminder to (and Request Of) Everyone

While this is an intriguing discussion, I see little if any attention being paid to the context. Doe... Sign up


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