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Three Horizons Framework

Developed by McKinsey consultants Mehrdad Baghai, Stephen Coley, and David White in their 1999 book 'The Alchemy of Growth', the Three Horizons Framework helps organisations manage the tension between exploiting current business (Horizon 1), nurturing emerging opportunities (Horizon 2), and seeding future growth options (Horizon 3) — all simultaneously. Horizon 1 covers the core business that generates current revenue and profit — it needs to be optimised and defended. Horizon 2 covers fast-growing businesses that represent the next wave of growth — they require investment and operational scale-up. Horizon 3 covers emerging opportunities, experiments, and bets on future markets — they are uncertain but essential for long-term viability. The critical insight of the framework is that all three horizons must be managed at the same time, not sequentially. Organisations that only focus on H1 are milking their future. Those that only invest in H3 never build sustainable business. In workshops, Three Horizons creates a shared language for portfolio discussions and helps teams stop treating every idea as if it lives in the same time frame and risk profile.

Durée
2h–3h
Taille du groupe
4–25 people
Matériel
Three Horizons template (A1 or projected), sticky notes in three colours (one per horizon), markers

Déroulé d'animation

  1. 1

    Set up three columns — H1 (0–2 years, 'Manage & Extend'), H2 (2–5 years, 'Nurture & Build'), H3 (5+ years, 'Create & Seed') — and write the actual calendar years on each. Brief the group on the different success metrics per horizon: profit and efficiency for H1, growth rate and market position for H2, learnings and option value for H3. Frame the session: 'We're mapping where our energy actually goes, not where we say it goes.'

    10 min
  2. 2

    Run silent individual writing: everyone lists current initiatives, projects, and ideas on sticky notes, one item per note, using the colour of the horizon they believe it belongs in. No discussion yet — the point is to capture each person's honest placement before the group converges.

    15 min
  3. 3

    Have participants post their notes on the template with a one-line explanation each. Cluster duplicates as they appear, but leave items placed in different horizons by different people visibly side by side rather than merging them.

    15 min
  4. 4

    Work through the disagreements deliberately. For each item that landed in two horizons, ask: 'What would need to be true for this to be H2 rather than H1?' These placement disputes are the most valuable data in the room — they reveal where the team's strategic assumptions diverge.

    20 min
  5. 5

    Step back and assess the balance. Count items per horizon, then estimate the share of budget and talent each horizon actually receives. Ask: 'Is this distribution intentional?' Pay particular attention to a thin H2 — teams can usually name today's business and a few far-off bets, but not what is being built to become the next core.

    15 min
  6. 6

    For each horizon, agree the three to five most important items and define what 'good progress' looks like in the next 12 months. Push for observable evidence — revenue milestones for H1, adoption or scale signals for H2, validated learnings for H3.

    25 min
  7. 7

    Close with commitments: for each horizon, decide one thing to start, one to stop, and one to accelerate. Assign an owner and a first step to each commitment, and agree when the map will be revisited.

    15 min

Conseils

  • The biggest facilitation challenge is H2 — teams often can't name what they're doing to build tomorrow's business.

  • This is the most revealing gap.

  • Avoid collapsing H2 and H3 into 'innovation' — they require fundamentally different management approaches.

  • Use time explicitly: write the current year and estimated target years on the template to keep discussion concrete.

Pièges courants

  • Treating the horizons as a delivery sequence — first H1, then H2, then H3 — instead of three portfolios that must be funded and managed simultaneously

  • Letting the loudest or most senior voice settle placement disputes quickly, when the disagreement itself is the strategic signal worth mining

  • Accepting vague ambitions like 'become AI-first' as H3 entries — the far horizon still needs concrete bets and experiments, not slogans

  • Ending at the map — without the resource-allocation discussion and start/stop/accelerate commitments, the wall becomes decoration within a week

Variantes

Run an 'Inverse Three Horizons' where you start from H3 (desired future state) and work backwards to identify what must change in H1 and H2. Combine with Scenario Planning to build different Three Horizons maps for alternative futures.

Contextes d'utilisation

Innovation portfolio workshopsExecutive strategy off-sitesR&D investment planningCorporate venturing strategyDigital transformation roadmapping

Quand l'utiliser

  • An executive or portfolio review treats every initiative as if it carried the same time frame and risk, and quick wins keep crowding out future bets

  • Annual strategy or budget planning needs a shared language for balancing core-business optimisation against investment in emerging and longer-term growth

  • An innovation pipeline is full of experiments with no visible path to becoming tomorrow's revenue, and leadership is losing patience with 'innovation theatre'

  • A transformation roadmap mixes efficiency projects, new business models, and moonshots, and the team needs to see the imbalance laid out on one wall

Quand ne pas l'utiliser

  • The group has no mandate over portfolio or budget decisions — mapping horizons without the power to shift resources produces a nice poster and no change

  • You need to rank a flat backlog of comparable items — an Impact/Effort Matrix or ICE Scoring does that faster than a time-horizon model

  • The organisation is in acute crisis where survival is the only horizon that matters — stabilise the core first; discussing five-year options will read as detached

  • You have less than 90 minutes — a rushed pass ends at labelling initiatives and never reaches the resource-allocation and start/stop conversation where the value lives

Méthodes associées

Pour aller plus loin

Questions fréquemment posées

How long does a Three Horizons workshop take?

Plan 90–180 minutes. The mapping itself goes quickly; the time goes into debating disputed placements, confronting the balance across horizons, and agreeing resource shifts. Below 90 minutes you get a labelled wall but no decisions.

How many people should join a Three Horizons session?

It works from 4 to about 25 participants. Above roughly ten, split into subgroups that map independently and then reconcile — the reconciliation surfaces the same misalignments as individual placement, at scale. Make sure people with actual budget authority are in the room.

Can Three Horizons be run remotely?

Yes. Set up a shared whiteboard with the three columns and colour-coded digital stickies, and use private or hidden-note mode for the individual placement round so nobody anchors on colleagues' choices. The reveal-and-debate rhythm then works exactly as in the room.

What is the difference between Three Horizons and a roadmap?

A roadmap sequences delivery over time; Three Horizons classifies a portfolio by time-to-material-impact and risk profile, and insists all three classes run in parallel. An H3 bet is not 'a roadmap item for 2031' — it is a small, uncertain investment you make now to keep future options open.

What preparation does a Three Horizons workshop need?

Prepare the template (A1 print or projected), sticky notes in three colours, and — most usefully — a pre-collected list of current initiatives from the project or portfolio registry so the session starts from reality rather than memory. Writing the actual target years on the template keeps discussion concrete.

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Method descriptions on Workshop Weaver are original content written by our team, based on established facilitation practices. This method was inspired by work from Baghai, Coley & White, The Alchemy of Growth (McKinsey, 1999).