The Strategic Leader's Dilemma: Immediate Results or Future Vision?
Learn The Three Horizons Model to Manage the Tension Between Short-Term Results and Long-Term Goals
In this issue:
The Dilemma
What is the Three Horizons Model?
How the Three Horizons Model Works
Applications of the Three Horizons
How You Can Apply The Three Horizons Model
Common Mistakes You Should Avoid
Download The Three Horizons Model Worksheet!
Complementary Frameworks and Other Resources
Final Thoughts
The Dilemma
It was one of those phases in my leadership career when everything seemed urgent.
I was leading a high-stakes project at Adobe, where my team was tasked with delivering a mobile version of Adobe Reader for iOS and Android—something that had never been done before.
The pressure was immense. Smartphones were still new at the time, with very low memory and screen space, yet the ‘vocal’ customers expected flawless performance from our apps.
Yeah, no surprises there.
As I was under pressure to deliver immediate results, I couldn’t stop thinking about the long-term vision. Several questions started popping up in my head:
Where were we headed?
What will be the future of the smartphone market?
Is this a bandwagon worth jumping on?
What if smartphones were a flop?
The more fundamental question that kept bugging me was:
How can we ensure this isn’t just a one-off success but the foundation of where these platforms were headed?
I felt like I was being pulled in two directions. On one side were immediate milestones: shipping a product that met user demands and supported the company’s reputation. On the other side were transformative ideas—features and innovations that could redefine mobile document workflows but required significant investment and time.
That’s when I stumbled upon McKinsey’s Three Horizons Model. This framework was exactly what I needed and helped me see that the tension between short-term results and long-term goals didn’t have to be a zero-sum game.
By thinking in horizons, I learned how to keep the present on track while creating space for future innovation.
We had poured so much effort into short-term wins that we had no clear plan for long-term growth. And it wasn’t just our team—this tug-of-war between short-term and long-term priorities is a battle most managers fight daily.
Sound familiar? If you’ve ever felt a tension between delivering results today and preparing for tomorrow, the Three Horizons Model could be your solution. In this article, I discuss strategies you can use to master and start applying this model.
What is the Three Horizons Model?
The Three Horizons Model is a strategic framework that helps leaders balance immediate priorities with future opportunities. Developed by McKinsey, it divides organizational focus into three “horizons” of time and activity:
Horizon 1 (H1): 1-2 years. Defend and expand current core business activities that drive revenue and keep the lights on.
Horizon 2 (H2): 3-5 years. Looks at emerging opportunities—new markets, products, or innovations that could grow the business in the mid-term.
Horizon 3 (H3): 5+ years. Seed future businesses —transformative ideas that could reshape your industry or create entirely new markets.
At its core, this model forces you to ask: Are we only thinking about today, or are we investing in tomorrow as well?
How the Three Horizons Model Works
To implement the model, you need to understand the balance each horizon requires:
Horizon 1:
Activities: Incremental improvements, cost-cutting, and operational efficiency.
Mindset: Deliver immediate results and defend the core business.
Example: Enhancing a software feature to retain current customers.
Horizon 2:
Activities: Scaling proven ideas, testing new products, or entering adjacent markets.
Mindset: Build the bridge to the future without losing sight of the present.
Example: Expanding into a new geographic region with existing services.
Horizon 3:
Activities: R&D, exploring disruptive technologies, or conceptualizing future business models.
Mindset: Think big and prepare for uncertainty.
Example: Developing AI-driven solutions that could revolutionize customer interactions.
Applications of the Three Horizons
Now, let’s discuss a few real-world examples and how this model can be applied to them.
1. Software Company: Balancing Core Products and Emerging Innovations
Imagine you’re managing a software company’s flagship product, a project management tool.
Your team is tasked with keeping customers happy by rolling out updates, fixing bugs, and addressing feedback—this keeps the lights on and revenue flowing (Horizon 1).
At the same time, you’re leading an initiative to build an AI-powered assistant that integrates into the tool, providing predictive insights. You know this will differentiate your product in the next few years, but it requires a careful balance of resources and time (Horizon 2).
Meanwhile, you’ve allocated a small, experimental team to explore virtual reality (VR) solutions for remote collaboration—a concept that could revolutionize the market but might take years to materialize (Horizon 3).
The challenge is maintaining focus on today’s results while keeping the future in sight.
2. Retail Chain: Expanding the Digital Presence
Now, imagine you’re managing a major retail chain, and all eyes are on your ability to increase online sales.
