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Three Horizons

By McKinsey & Company

The Three Horizons approach was developed based on research of how companies sustain long-term growth. This portfolio model provides a framework for how companies can manage current performance while maximizing future opportunities. Strong companies must balance investments across all three horizons while moving from Horizon One to Horizon Three over time.

Horizon One focuses on the current core business. The goal here is to identify the profit drivers and maximize performance to capitalize on the value being created.

Horizon Two represents emerging opportunities for the business. These may be “intraprenurial” projects or initiatives that show promise, but require further investment to become profitable and sustainable.

Horizon Three are future profitable ideas and opportunities for the business. These may be disruptive ideas outside of the current core business. The goal here is to accelerate learning to validate areas for future learning.

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