Three Horizons Model
Updated 2026-08-05
INTRODUCTION
English translation pending.
CORE DEFINITION
A framework popularized by McKinsey to manage growth across three time bands: Horizon 1, the current core business and its incremental improvements; Horizon 2, emerging businesses expected to become material within a few years; and Horizon 3, long-term options and disruptive bets whose payoff is uncertain and distant. The core proposition is that a company must fund all three simultaneously or face a growth gap when the core matures.
SCAFFOLDING EFFECT
Reduce cognitive load
- Portfolio balance: allocate resources across all three horizons explicitly rather than by default. - Pipeline check: verify that each horizon has enough projects to feed the next one. - Short-termism guard: protect long-horizon funding from the pressure of quarterly earnings.
Anchor fast decisions
Core businesses generate the cash and eventually decline, while new businesses need years of investment before they contribute anything. If funding follows current revenue, all resources flow to the core and the pipeline empties, so when the core matures there is nothing to replace it. Running the three horizons in parallel keeps the replacement pipeline funded during the years when the core still looks healthy.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- baike.sogou.comhttps://baike.sogou.com/v10004831277.htmverified
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