Innovation Strategy: The Three Horizons of Growth (McKinsey)

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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 (...)

  Edith Ohri
 

New Ventures have only Horizon 3

Why starting with a core business when in new vent (...)

  Jorge Urrea
Consultant, Mexico
 

3 Horizons of Growth

I agree with Edith Ohri and, as usually, the artic (...)

  Vincenzo Rogione
Management Consultant, Italy
 

Three Horizons: Why?

Though I appreciate Charles' comment, in my opinio (...)

  Anna hanooman
ICT Consultant, Trinidad and Tobago
 

Extensions for the 3 Horizons of Growth

I agree with Ohri. In my humble opinion, the three (...)

  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 sc (...)

  Charles Alter
Consultant, United States
 

Three Horizons of Growth Relevant for Established Businesses

@Edith Ohri: admittedly, the three horizons are me (...)

  simon haafs
Student (MBA), Netherlands
 

How to Implement the 3 Horizons within 1 Company

I underscribe the model. The challenge is to integ (...)

  Gary Stead
Director, United Kingdom
 

3 Horizons : Sources for Ideas for Innovation

It seems the real innovation is in horizon 3. The (...)

  Rajan Johri
India
 

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 M (...)

  MdL Mario TERRALAVORO
Interim Manager, Italy
 

Balancing Product's Innovations and Future Products

The 3 Horizons combine looking at future products (...)

  KATHRYN STEINER, MBA
Entrepreneur, United States
 

Three Horizons of Growth Understandable and Useful Across Sectors / Industries

@Charles Alter: hello Charles, you have explained (...)

  Feraidoon Bakhtiari
CxO / Board, Iran
 

3 Preparation Stages for Horizons of Growth

I like the idea and I share the concepts with part (...)

  Saeed Khodaee
Director, Iran
 

Status Quo to Boost Future Plans

@Edith Ohri: undoubtedly, without maintaining the (...)

  SAMUEL NDUATI MBUGUA
Management Consultant, Kenya
 

The Three Horizons and Competitiveness

Whereas the main objective of the three horizons i (...)

  marc romano
 

3 Horizons of Growth is Still Valuable as a Foundation

This basic framework is very sound. It provides a (...)

  Leodegardo M. Pruna
Professor, Philippines
 

Three Horizons of Growth

The first horizon to my mind is where an enterpris (...)

  Sorni Tindanzo Namateng
Student (University), Ghana
 

Three Horizons of Growth are Practical

Thank you Charles, today is my first time at 12man (...)

  Tadeusz Sudol
Strategy Consultant, Poland
 

Where to Hunt for Innovation Ideas?

@Gary Stead: The answer is: everywhere, but the pr (...)

  Raghu Bala
Manager, United States
 

The Right Distribution of Resources over the 3 Horizons

Businesses struggle with distributing resources to (...)

  Osama Kamal
Management Consultant, Egypt
 

Exploring Uncertainity with the 3 Horizons of Growth

It's like these 3 horizons. I will use the model i (...)

  SAMARENDRA KUMAR MOHANTY
India
 

Innovation Strategy: the Three Horizons of Growth (McKinsey)

@Edith Ohri: steps 1-2 are required to generate re (...)

  Brijesh Dave
Manager, India
 

Three Horizon Concept for Challenging the Status Quo

Good concept to generate thoughts to challange the (...)

  Falk Heinrichsohn
Business Consultant, Portugal
 

Look out of the Window and see 3 Horizons

The three horizon approach may help with the probl (...)

  Dr zahra gheidar
Consultant, Iran
 

Time is Important Point

Certainly, these frameworks are usual steps for es (...)

  Charles Alter
Consultant, United States
 

Three Horizons of Growth all about Innovation and Marketing

Thank you to everyone who has replied and shared t (...)

  Aladdien Mohamed
Manager, Saudi Arabia
 

Don't Focus too much on Horizon 1

Actually I have a comment on stage 1. Organization (...)

  Jaap de Jonge
Editor, Netherlands
 

Senior Managers Should Focus on Horizons 2 and 3

That's right, the 3 horizons of growth are especia (...)

  Cristina Isenrath
Director, Argentina
 

Where are the Resources..

@Gary Stead: more looking inside ourselves... To f (...)

  GAMANSON
Management Consultant, Sri Lanka
 

Protect your Bread and Butter First

Any business has to ensure first it survives in th (...)

  Martin Kerr
Project Manager, Australia
 

Consistent Context Using Horizons

In our organisation the 3 horizons are standard di (...)

  Jaap de Jonge
Editor, Netherlands
 

All 3 Horizons are Important, but...

@Gamanson: all 3 are (equally) important for any b (...)

  Sandy Findlay
 

The 3 Horizons of Growth Help to Decide on Innovation Resources

Excellent model for drawing attention on where res (...)

  Francesco Cuoco
 

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

Seems a correct approach for medium- large compani (...)

  Julius Belleza
CEO, United States
 

3 Horizons of Growth Reminds and Helps us Prepares for Change

I agree with Gamanson and Aladdien Mohamed. For bu (...)

  Charles Alter
Consultant, United States
 

Three Horizons of Growth at SMEs

@Francesco Cuoco: For SMEs (small - medium size en (...)

  FUNSHO
Accountant, Nigeria
 

Consider the Reasons for Growth in 3 Horizons

Business growth cannot be limited to these 3 horiz (...)

  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 sto (...)

  Leodegardo M. Pruna
Professor, Philippines
 

Time to Spend on Each Innovation Horizon

@Zahra Gheidar: there is no fixed rule on how much (...)

  ENRIQUE CARLOS POZO
Project Manager, Spain
 

Transversal Innovation

I think the three horizons must be parallels, not (...)

  KATHRYN STEINER, MBA
Entrepreneur, United States
 

Differentiating Critical Functions and Costs

@Charles Alter: innovation is probably also known (...)

  Htin Kyaw Myint
Manager, Myanmar
 

Quite Useful Model for our Organisation

In fact, it is quite a good model for our organiza (...)

  KATHRYN STEINER, MBA
Entrepreneur, United States
 

Model for Industries That Have Complex Logistics

This model would be interesting to translates into (...)

  Dr zahra gheidar
Consultant, Iran
 

Length of Horizons is Vital

Certainly measuring a precise, definite time and d (...)

  John Moses
Manager, Nigeria
 

3 Horizons Model is about Strategy Stages

Looking at the three horizons, it is all about dif (...)

  Francesco Cuoco
 

The 3 Horizons for Growth

I think that the model is quite generic. The real (...)

  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 (...)

  jasmin
 

This is only a Theoretical Framework

This framework helps you how to think but not how (...)

  Francesco Cuoco
 

Combine 3 Horizons of Growth with SWOT Analysis

@Jasmin: I guess the two methodologies complement (...)

  Ionelia Iftimie
Director, Romania
 

3 Horizons of Growth

I think this proposal would be an interesting star (...)

  Margaret
Management Consultant, Australia
 

Broader Horizon Scanning

@Gary Stead: Other (related) Industries, Research (...)

  Rick Mueller
Professor, United States
 

A Quick Reminder to (and Request Of) Everyone

While this is an intriguing discussion, I see litt (...)

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