The Three Horizons Model: Balancing Today's Success with Future Growth
- Yohlar
- 13 minutes ago
- 2 min read
The Three Horizons Model: Balancing Today’s Success with Future Growth
Innovation is often seen as a leap into the unknown, but successful businesses understand that sustainable growth requires a balance between short-term gains and long-term vision. That’s where the Three Horizons Model comes in—a strategic framework that helps organisations manage innovation across different timeframes while maintaining business stability.
What is the Three Horizons Model?
Originally developed by McKinsey, the Three Horizons Model is a structured way to plan for the future while ensuring the present remains strong. It breaks innovation down into three categories:
1️⃣ Horizon 1: Optimising the Core – This focuses on sustaining and improving the current business model. It includes refining existing products, increasing efficiency, and enhancing customer experience.
2️⃣ Horizon 2: Exploring Emerging Opportunities – This is where businesses expand into adjacent markets, experiment with new technologies, and explore growth areas that are closely related to their existing operations.
3️⃣ Horizon 3: Disruptive Innovation – This is about long-term, game-changing innovation—think of entirely new business models, revolutionary technology, or market-defining products.
How & Where Should You Use It?
The Three Horizons Model is particularly useful for businesses looking to balance innovation with stability. It helps leaders:
✅ Avoid focusing too much on short-term wins at the expense of long-term sustainability.
✅ Allocate resources wisely across different innovation stages.
✅ Encourage teams to think beyond immediate challenges and explore future possibilities.
Why is it Innovative?
Many businesses struggle with an ‘either-or’ approach to innovation—either they focus too much on maintaining what works or they go all-in on risky future ideas. The Three Horizons Model provides a structured way to integrate both. It ensures businesses can stay competitive today while preparing for tomorrow.
Tips for Using It Effectively
💡 Allocate Resources Wisely: Ensure a portion of your budget and team effort is dedicated to each horizon.💡 Encourage Future Thinking: Give your team space to explore new ideas without losing focus on current operations.💡 Review & Adapt: Markets evolve—regularly assess which innovations belong in which horizon.
The best part? The Three Horizons Model can be used by any business, at any stage—from startups looking for structured growth to established companies ensuring long-term market relevance.