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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."
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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:
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.
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:
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.
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:
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