Want FREE Templates on Organization, Change, & Culture? Download our FREE compilation of 50+ slides. This is an exclusive promotion being run on LinkedIn.

We have categorized 2 documents as McKinsey Three Horizons of Growth. All documents are displayed on this page.

When it comes to business growth, McKinsey's Three Horizons model stands as a premier framework, praised and utilized by the pioneers in the business world. As the CEO of GE, Jeff Immelt, famously said, "The Three Horizons framework was instrumental in helping us think about growth in a broad-based way."

144-slide PowerPoint deck
$89.00
31-slide PowerPoint deck
$15.00

  Open all 2 documents in separate browser tabs.
  Add all 2 documents to your shopping cart.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.




Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab




Flevy Management Insights: McKinsey Three Horizons of Growth


When it comes to business growth, McKinsey's Three Horizons model stands as a premier framework, praised and utilized by the pioneers in the business world. As the CEO of GE, Jeff Immelt, famously said, "The Three Horizons framework was instrumental in helping us think about growth in a broad-based way."

The Three Horizons framework was initially developed by McKinsey, one of the world's leading management consulting firms. It offers a strategic approach for companies to manage growth and identify potential opportunities by dividing their business goals into three distinct horizons:

  1. Horizon One is focused on defending and extending the current core business. These are mature, well-established products likely contributing a significant share to the company's cash flow and profitability.
  2. Horizon Two encompasses emerging opportunities or 'rising star' activities that could become significant parts of the company’s growth. These projects or ideas have a medium-term impact, with the potential to replace or transform the existing core business.
  3. Horizon Three consists of longer-term, paradigm-shifting ideas or ventures, essential for long-term growth, but currently may only be embryonic or conceptual in nature. They are exploratory and hold potentials for disruptive growth.

Benefits to Strategy Development and Risk Management

In Strategic Planning and Risk Management, the McKinsey Three Horizons Model offers several critical benefits. It enables a robust strategic discussion by integrating short term and long term goals. It also allows decision-makers to balance resource distribution across the different horizons. By identifying threats and opportunities across the three horizons, the model creates a broader perspective of strategic risk.

Best Practices for Operationalizing the McKinsey Three Horizons Model

Though highly effective, applying the Three Horizons Model requires more than merely identifying the three horizons. Here are some key approaches to operationalize this framework:

Real-world Success: A McKinsey Case Study

The impact of the Three Horizons Model can be demonstrated in a McKinsey case study involving a major global company facing growth challenges. McKinsey brought in its expertise to implement the model, setting clear metrics for each horizon, identifying new opportunities, and reallocating resources accordingly. The result was a 30% increase in the company's share price within two years - an impressive testament to the value of McKinsey's Three Horizons Model.

Integrating the Three Horizons with Digital Transformation

In the dynamic era of rapid technology growth, it's crucial to align the Three Horizons framework with Digital Transformation. Business Transformation should ideally include considerations for leveraging emerging technologies in Horizon Two and Three, creating a culture of Innovation across all three horizons.

As we further dive into the age ruled by data and technology, the need for such an integrated, forward-looking, and strategic framework only rises. With its proven efficacy, the McKinsey's Three Horizons Model holds a promising solution to these evolving challenges.

For effective implementation, take a look at these McKinsey Three Horizons of Growth best practices:

Related Management Topics

Related Flevy Management Insights: Case Studies

Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.