Three Horizons Model: How to Manage the Tension Between Short-term Results and Long-term Goals
The model that will help you ensure that what you do today helps you to achieve your long-term goals
In this issue:
Part 1: Understanding The Three Horizons Model
What is the Three Horizons Model?
How the Three Horizons Model Works
Part 2: Applying The Three Horizons Model
The 5-Step Guide
Real-life Leadership Scenarios
The Three Horizons Model Worksheet
Part 3: Going from here
Common Mistakes You Should Avoid
Complementary Frameworks and Other Resources
Final Thoughts
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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.
Part 1: Understanding The Three Horizons 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.
Part 2: Applying The Three Horizons Model
In this section, you will learn how to apply the Three Horizons Model in your role as a leader.
We will start by reviewing The 5-Step Guide to using the model in your own role
We will then discuss some common real-life leadership scenarios, and how you would apply this framework in each of those.
Finally, we will make it real with the Multipliers Worksheet, which will help you build your muscle in applying and using this framework in your leadership role.
The 5-Step Guide
Here’s a step-by-step guide to using the model in your work: