Horizon 1-2-3 of business
In the traditional context, companies have often followed the S-curve model, which represents the typical growth trajectory of a product or service from inception to maturity. Initially, companies invest in product development and marketing to gain market acceptance, leading to a period of substantial growth and profitability. However, as competitors enter the market, profits may plateau, prompting companies to seek new growth opportunities. While the concept of the new S-curve remains relevant, the linear progression it implies may no longer suffice in today's dynamic business environment. The emergence of the digital vortex signifies both opportunity and threat, as disruptive forces can rapidly reshape industries, causing established companies to vanish within a short timeframe.
Growth
Scale
Growth
Start
To adapt, organizations must not only focus on optimizing their core business (Horizon 1) but also leverage their core competencies to explore adjacent business (Horizon 2) and incubate new ventures in emerging sectors (Horizon 3). This approach fosters resilience and innovation, essential qualities for navigating the uncertainties of the digital age.
Profitability
Source : Three Horizons of Growth innovation strategy model, McKinsey,2000
Create viable options
These ideas may be unproven and potentially unprofitable for a significant period of time.
H3
in 4-5 years, following consistent exploratory research, the H-3 initiative become viable with tangible return
Explore and discover expansion
H2
This is an extension of current proven business model which may require an initial cost, but these investments should return fairly reliably. In 2-3 years, following the investment in building capability, H-2 starts contributing significant return to the operating plan
Maintain and strengthen core business
The goals will be mostly around improving margins, bettering existing processes, and keeping cash coming in
H1
In the coming year, H-1 is making profit to the operating plan
Time
It's crucial to recognize that Horizons 1, 2, and 3 operate concurrently, rather than sequentially. Businesses must navigate these horizons simultaneously, balancing short-term profitability with long-term sustainability and growth. This parallel approach allows organizations to adapt swiftly to evolving market dynamics while capitalizing on emerging opportunities across multiple fronts. By embracing this integrated strategy, companies can foster agility and resilience, ensuring their continued relevance and success in an ever-changing business landscape
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