Summary: "McKinsey’s Three Horizons Model Defined Innovation for Years. Here’s Why It No Longer Applies"

When the McKinsey Three Horizons model was first articulated in The Alchemy of Growth in 2020, it was considered a breakthrough. Then the foundation of innovation strategy, it allowed leaders to visualize the idea that companies need to execute business models while simultaneously creating new capabilities.

The model relied on time as the guiding factor, and while it was appropriate in the 20th century when new disruptive ideas took years to research, engineer, and deliver, in this Harvard Business Review article, author Steve Blank makes the case for why it is not relevant in today’s environment as innovations can be rolled out quickly giving disruptors the advantage.

Four ways to counter rapid disruption:

• Incentivize external resources to focus on your goal or mission. For example, NASA and Commercial Resupply Services with SpaceX and OrbitalATK.

• Combine the existing strengths of a company or agency and its business model by acquiring external innovators who can operate at the speed of the disruptors. For example, Google buying Android.

• Rapidly copy the new disruptive innovators and use the incumbent’s business model to dominate. For example, Microsoft copied Netscape’s web browser and used its dominance of operating system distribution to win.

• Innovate better than disrupters. For example, Apple and the iPhone, and Amazon and AWS.

Read about the Three Horizons Model and learn more about countering rapid disruption.