Should strategy be long-term or short-term?
Table of contents
The 3 Horizons: A Blueprint for Action
Why Action is Needed on Each Horizon Today
Practical Steps to Apply the 3 Horizons Mindset
Final Thought: Strategy as Momentum
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We're often tempted to think of it as an either-or, but the truth is, strategy isn't a choice between timeframes. It's about setting a course right now that brings you closer to your ambitions—whether those are for next quarter or the next decade. Strategy is a response to today's challenges, and it needs to happen today if we're going to see results tomorrow.
The Three Horizons: Rethinking Strategy's Timeline
Not long thereafter, someone will introduce McKinsey's three horizons model—social strategy divided into short-, mid-, and long-term plans: "Let's delineate what we have to do now, what we have to do during the next three to five years, and what we have to do for the long term." That's not what the three horizons literally mean. They aren't about choosing a timeline for when to act. They're about understanding when you can expect results from what you're doing today.
Think of it this way: each horizon prompts you to take action right now, with the difference lying in when you’ll see the results. Here’s how to channel this into a business strategy that keeps you proactive and forward-thinking.
The 3 Horizons: A Blueprint for Action
The three horizons are a way of saying "Start today, knowing when you'll see the impact." Each horizon has its cadence, its rhythm. Let's break down how they work and what they mean for you as a founder:
Horizon 1: Activities that Yield Results within 1-3 Years
This is where we are playing the short game. Horizon 1 is all about making moves that return tangible benefits forthwith. Whether it is capturing new customers, expanding your product line, or boosting cash flow, this is your playground.
Take action: Prioritize initiatives that bring stability and momentum to your business right now. Consider what can provide a quick win, whether it’s increasing revenue or growing your customer base.
Horizon 2: Things that Pay Off in 3-5 Years
Horizon 2 bridges the gap to the next phase of growth. It’s about strategic investments that position your business for long-term success, such as adopting new technologies, forming key partnerships, or entering new markets. These aren’t urgent, but they’re essential for scaling.
Take action: Commit to projects that require nurturing and development but promise substantial growth in a few years. Investing in partnerships or infrastructure now can transform your business from good to great over time.
Horizon 3: Activities that Will Yield Value in 5-10 Years
Horizon 3 is where visionaries focus on creating a legacy. This is about pursuing big, bold ideas that could change the industry, like pioneering new technology or launching groundbreaking products.
Take action: Think big here. This is the space for long-term investments in R&D, revolutionary technology, or creating a new category. While these are long bets, they’re the seeds for transformational change and lasting impact.
Why Action is Needed on Each Horizon Today
Another big mistake we can make is to think of these horizons as tomorrow's tasks. Each horizon depends on action now. It is the plans you lay today that create momentum in building a business that is prepared not only to grow and adapt but also to endure. In each horizon, you get an opportunity to reinforce your business's foundation, sustain its growth, and pave the way for its future.
Practical Steps to Apply the 3 Horizons Mindset
Align Horizons with Your Goals
Differentiate between immediate needs and the foundations for long-term success. Each horizon should be supported by others: your short-term goals are feeding the mid-term ones, and your mid-term goals enable the long-term vision.Balance Your Resources
Spread resources across all three horizons. A good strategy is never about focusing on one horizon; it's about interweaving them. Give each of them the time, budget, and effort it takes so they are well endowed to succeed.Set Milestones and Reflect
Strategy is iterative—check progress, adapt, realign regularly. Strategy isn't a decision; it's a conversation, iterated over time. See what works, and don't be afraid to pivot when new challenges and opportunities arise.
Final Thought: Strategy as Momentum
When we talk about strategy, we’re talking about creating momentum—moving toward a future that’s compellingly different from where we are today. The Three Horizons Model isn’t a rigid timeline; it’s a framework for proactive, strategic growth. By applying these horizons, you build a business that’s equipped for both present success and future legacy. Every action you take today is a step toward turning ambition into reality.