The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise
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- Update Date：2025-09-06
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- Author：Mehrdad Baghai
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Summary
Growth unleashes benefits beyond the economic。 It revitalizes organizations and invigorates the people in them， creating energy， a sense of purpose， and the glow of being on a winning team。 Like the alchemy of old， it seeks to transform the everyday into the exalted by means that seem little short of magical。 Yet growth is often elusive， achieved at unacceptable costs， or managed in fits and starts。 Based on over three years of research and application at high-performing companies around the world， The Alchemy of Growth is a comprehensive， practical approach to initiating， achieving， and sustaining profitable growth -- today and tomorrow。 As the book shows， the secret is to manage business opportunities across three time horizons at once: extending and defending core businesses， building new businesses， and seeding options for the future。 The Alchemy of Growth offers managers at all levels the tools and concepts for investing in the right initiatives， capabilities， and talent to propel their companies into the future。
Reviews
Anton
，
Great actionable management frameworks - still highly relevant。 But please be warned about dated examples and case studies （e。g。 there are examples based on Enron business performance prior their fall from grace - yeah， this book was around for some time！）Examples aside， this is a nice， thought-provoking， quick read。 Something worth taking on your next short-haul flight
Ramki Sitaraman
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A couple of decades old book and still ideas are very relevant and educative 。 The book has an arc of qualification to grow - structure to grow - management of structures and teh divergences in each stage 。 The book has many examples of how companies failed to grow and succeeded to grow in the context of H1-H2-H3 way of portfolio of management A crucial point to know is that all of the H1-H2-H3 have to happen in parallel - i。e the growth happens in parallel。
Rob Mills
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Somewhat interesting book， where two mckinsey consultants go through some lessons learned from growth companies。 A short 160 pg book with about 100 pages of appendices which is mainly two pagers on growth companies （how they were founded， how they evolved， and charts of metrics going up and to the right）。 I very much enjoyed the examples cited and liked the suggested framework for companies => horizon 1， focus on core business; horizon 2， high growth segments not yet established; horizon 3， sewi Somewhat interesting book， where two mckinsey consultants go through some lessons learned from growth companies。 A short 160 pg book with about 100 pages of appendices which is mainly two pagers on growth companies （how they were founded， how they evolved， and charts of metrics going up and to the right）。 I very much enjoyed the examples cited and liked the suggested framework for companies => horizon 1， focus on core business; horizon 2， high growth segments not yet established; horizon 3， sewing seedsThey suggest how incentive structures should be changed and how you can try and protect growing business segments from P&L focused execs in core profit centres。 I thought it was a smart idea and always fun to read a book full of business case examples from 20yr ago。 。。。more
JimtheDean
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Interesting concepts for those interested in growing a business。 I read this book as a work requirement and otherwise would never have picked it up。 It's older and some of the companies highlighted have since gone out-of-business。 The authors suggest though that companies go through cycles and that this may happen。Not being a business thinker myself， I found the model interesting and probably worth the read。 I would find it more interesting to see an update of why some of these companies have fa Interesting concepts for those interested in growing a business。 I read this book as a work requirement and otherwise would never have picked it up。 It's older and some of the companies highlighted have since gone out-of-business。 The authors suggest though that companies go through cycles and that this may happen。Not being a business thinker myself， I found the model interesting and probably worth the read。 I would find it more interesting to see an update of why some of these companies have failed in light of their having been highlight worthy for this book。。。and if that suggests anything about the model。。。or how they might tweak the model in light of these failures。。。or would those failures in fact strengthen concepts in the model。 。。。more
Brian Nwokedi
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The main premise of this book is that:"The central challenge in sustaining growth is to build and manage a continuous pipeline of business creation。 Ultimately， this is possible only if companies adopt distinct management systems for each of the three horizons。"The Alchemy of Growth breaks down long-range growth into three horizons that is truly very simple to understand。 And while the actual strategies you may use to drive your business towards these horizons might change， the manner of discuss The main premise of this book is that:"The central challenge in sustaining growth is to build and manage a continuous pipeline of business creation。 Ultimately， this is possible only if companies adopt distinct management systems for each of the three horizons。"The Alchemy of Growth breaks down long-range growth into three horizons that is truly very simple to understand。 And while the actual strategies you may use to drive your business towards these horizons might change， the manner of discussion has been easily set by this simple framework。This book is worth a read for anyone who is interested in pushing past stagnant to moderate year over year growth。 Remember that every business should: （1） extend and defend core businesses（2） build emerging businesses（3） create viable options 。。。more
Sujata Sahni
，
Our thinking about growth and decay is dominated by the image of a single lifespan， animal or vegetable。 Saddling， full flower and death。 "The flower that once has bloomed forever dies"。 But for an ever renewing society the appropriate image is a total garden， a balanced aquarium or other ecological system。 Some things are being born， other things are flourishing， still other things are dying - but the system lives on ~ John Gardner。 What underpins sustained growth？ The problem is， most managers Our thinking about growth and decay is dominated by the image of a single lifespan， animal or vegetable。 Saddling， full flower and death。 "The flower that once has bloomed forever dies"。 But for an ever renewing society the appropriate image is a total garden， a balanced aquarium or other ecological system。 Some things are being born， other things are flourishing， still other things are dying - but the system lives on ~ John Gardner。 What underpins sustained growth？ The problem is， most managers are preoccupied with their existing businesses and often the gap of competing demands of running existing businesses and building new ones widens。 The case is easy as in John's metaphorical garden， a business， like a flower， is born， flourishes and withers。 Horizon 1 businesses are at the heart of an Organization。 Those that the customers and stock analysts readily identify with the corporate name。 In successful companies， these businesses account for the lion's share of profits and cash flow。 They are critical to near-term performance and the cash they generate and skills they nurture provide resources for growth。 The primary challenge in horizon 1 is to shore up competitive positions and capture what potential remains in the core business。 Even when theses are mature， continuing innovation can incrementally extend their profitability and growth。 Restructuring， productivity enhancements， cost cutting， product extensions and market changes can all help for as long as possible。 Horizon 2 comprises businesses on the rise， fast moving entrepreneurial ventures in which a concept is taking route or growth is accelerating。 These initiatives are usually characterised by a single-minded drive to increase revenue and market share。 In a few years， these initiatives should complement or replace a company's existing business。 They may represent either extensions of these businesses or move in a new direction。 This horizon is about building new streams of revenue which takes time and demands new skills。 A good growth company needs to have several of these emerging businesses "on the boil" working to convert promising ideas into future earrings generators。 Horizon 3 contains the seeds of tomorrow's businesses - options on future opportunities。 Although embryonic， horizon 3 options are more than ideas。 They are real activities and investments， however small they are the research projects， test- market pilots， alliances， minority stakes and memoranda of understanding that mark the first steps towards actual businesses， even through they may not produce profits for a decade， if ever。 A company that thinks it has a promising horizon 3 just because it compiles a long list of whiteboard ideas at a management retreat is fooling itself。 Without deliberate initiatives to develop good ideas into horizon 3 opportunities， a company's growth prospects will fade。 These are rarely proven opportunities， but they need to be promising and to have the support of management。 Building successful businesses men's seeding numerous options。 Some will fail for internal reasons， others will fall victim to shifting industry winds。 Most will never grow to become successful businesses。 Given these odds， a great deal of horizon 3 activity is needed to cover a multitude of possible futures。 The goal should be to keep the option to play Withou committing too much capital or other resources。 The real challenge is to nurture promising toons while ruthlessly exercising those with diminishing potential。 Initiatives in all three horizons pay off over different frames。 When theyay off， however has little to do with when they require management attention and investment。 Leaders at all levels of an Organization should look in the mirror and ask， " how healthy are my horizons？" In it not unusual to find one， two or even all three horizons barren。 Internally， it may be that the company's executives are not devoting due attention to one or more horizons。 Externally， industry shocks may overturn the fortunes of existing or developing businesses overnight。 The first and worst pattern is that of a company under swipe。 Here， the core businesses of horizon 1 are underperformance， threatened by competitors， or facing imminent decline。 Companies undergoing a turnaround are usually under siege。 When Michael Eisner took over Disney as the first outsider in 1984 in its 61 year history， it was undoubtly under siege。 The business in theme parks was lying fallow， few new attractions were being added， no new hotels had been built since 1973 and the film business had also slipped。 Touchstone film production had been launched to woo adult audiences but Disney was falling behind in the video market and Disney channel was losing money。 The stock price nosedived。 Similarly， an excessive focus on growth can be just as mush a problem as ignoring it。 While companies under siege suffer mainly because they failed to grow their business creation pipeline， others lose the right to grow when they become obsessed with new businesses。 Nokia， the global telecommunications equipment maker， lost the right to grow simply by trying to do too much。 Founded in 1865 on the banks of the Nokia river in Finland， the company was originally a pulp and paper manufacturer in 1966， it merged with a rubber company and cable manufacturer。 In the 1980s it's then CEO went on a buying spree， spurred by the vision of building a global corporation as Europen trade barriers fell。 The company made 21 acquisions between 1986 and 1989。 At the peak of its diversification， it attempted to manage businesses ranging from footwear to chemicals。 There were simply too many enterprises for the mangers to handle and all businesses including pulp and paper， began to collapse。 When the new President took over in 1988， the company was losing its right to grow。 In stark contrast many companies never take their eyes of their core businesses。 Yet even world-class companies can run out of steam when these businesses mature and there are no new enterprises when these businesses mature and there are no new enterprises in the pipeline to take their place。 Crisis may not be at hand， but it could be just around the corner。 Companies that have raised their performance by boosting efficiency and cutting costs will eventually face diminishing returns。 This often happens after the completion of rigorous turn around programs。 In 1995， Wells Frgo produced the highest return on assets and equity of any of the 50 largest US banks。 For nearly 10 years， Wells Fargo achieved annual compounded growth of more than 20%。 This record rested on ruthless cost reduction， rigorous budgeting and planning and a strong performance ethic。 Paradoxically， these very strengths inhibited new business creation。 The company's planning and budgeting process and demand for short term profitability worked against the flow of new ideas。 This did not become a problem till the first half of the 1990s when assets and revenues declined by 2% a year and earnings growth slowed to 8%。 While the Bank had clearly earned the right to grow， it lacked sufficient horizon 2 and 3 initiatives to create new sources of substantial revenue growth。 Similarly some business boast of promising horizon 2 and 3 businesses， but no viable horizon 1。 This is most common in start up cornpaniea whose business is still a few years from posting sunstantial profits and building market value。 From time to time， I dustries are shaken by discontinuities， wrenching shifts in competitive structure that redefines the rules of the game and reshape a payers fortunes。 For ex。 Minimill technology transformed the steel industry， by permitting production with less capital investment， opening the door for Nucor to become an industry leader。 Electronic commerce is changing the game in many industries by driving down transaction costs。 Bust discontinuities are not confined to technological change。 Deregulation can also reverse incumbents fortunes。 In the US telecommunications industry， deregulation meant more than breakup of AT&T， the introduction of compition meant many players had to scramble to defend them selves under hungry attackers。 The goal I'm such situations is to manage timing and pace of transition another troublesome pattern occurs when companies have strong horizon 1 businesses and lots of ideas in horizon 3， but few people working on these ideas to turn them into real businesses。 This pattern tends to appear among high-technology companies and those that have traditionally lacked new ideas but have worked hard to address the gap。 Such a company may have imagined that a few good ideas at the far end of the pipeline constituted a growth strategy。 It may have deluded itself AT&T a few out of the box ideas is all it takes。 Often under pressure， these companies make hasty acquisitions。 Prompted by anxiety， these acquisitions may fill holes， but all too often they end up destroying shareholder value and stalling growth programs。 Companies that pride them selves on cutting-edge research， but do not have a good record of commercialising their ideas， are also prone to exhibit such patterns。 Xerox proved to be an example when it failed to commercialise its horizon 3 idea。 In 1970， it was the leading manufacturer of of photciers。 As a strong horizon 1 business， it worried about the possibility of a paperless future which would make its product obsolete。 It set up a research centre in Palo Alto to invent the future of computing。 The array of inventions that emerged is legendary。 The first graphical computer interface featuring windows and icons， driven by a mouse， the laser printer and the local area network。 But it failed to commercialise these ideas， leaving Hewlett-Packard， Apple， Microsoft and others to extract the value。 Many companies are making the same mistake today。 We also see organizationa that have strong Horizon 1 earnings and promising businesses in horizon 2。 They fuel profitable growth for several years， but if they are to sustain success， they must be able to institutionalise the creation of new ideas。 Without a continuous stream of new options in horizon 3， the next generation of horizon 2 businesses will not come on stream quickly enough and growth will stall。 The stock market demands intensify the challenge。 The success associated with healthy horizon 1 and 2 inevitably raises market expectations of growth。 To meet these expectaions， organizationa must generate new businesses faster than before。 Johnson and Johnson scours the world regularly for emerging technologies。 It's research wing identify and nurture opportunities， establish relationships with venture capital and investment banking communities， scientific research establish，nets and small entrepreneurial startups to gain access to attractive medical and health care technologies。 These technologies eventually translate into products that spur the companies growth。 So when a company looks in the mirrir it understands how it needs to define the balance between horizon1， horizon 2 and horizon 3。 Financial markets implicitly recognise the value of balance of activity across the three horizons。 While Horizon 2 and 3 May account for little or no current earnings， they are crucial to how investors are willing to pay for a company's stock。 This is especially relevant in the technology sector where startups routinely command price to earnings ratios of 50 to 100， despite the fact that they have no horizon 1 business - just the potential for strong growth。 Achieving a balance does not ，San having the same nu，bee of initiatives in each horizon。 The low hit rate in Horizon 3 options usually means that a large number are usually needed to yield even one successful horizon 2 business。 Considering the pace of industry evolution， degree of Uncertainity， managerial and financial capacity and share holder expectations are key drivers。 In hyper evolutionary industries， horizon 3 may be a couple of eyars away。 The importance of what is in the pipeline relative to currenterformace becomes much greater。 Related to the pace of evolution is the level of Uncertainity in an industry。 Unexpected chnages in the industry ，as threaten core business， but they ，at also open doors to opportunities。 Similarly if the company is unrealistic about the money and management time it has for business creation， the growth program may become an exercise in frustration。 If a company's investors are willing to accept volatility， it's definition of balance can tilt towards the later horizons supporting investments in horizon 2 and 3。 A pessimist might interpret the unhealthy growth patterns as a diagnosis of poor health with a prognosis of dim growth prospects。 A growth leader however， will see the patterns as starting points from which growth can be achieved。 An objective assessment of the health of the 3 horizons can point towards recovery and growth。 We live in an era rich with opportunities where growthroects are more often limited by management failings than by economic realities。 Sap was founded in 1972 by 4 engineers from IBM。 They shared a vision of producing and marketing standard software for integrated business solutions。 It has three main operating arms， Business applications software development， IT consulting and training。 It grew through geographical expansion using special relationships by forming partnerships with numerous software and hardware development companies and global and local consulting firms。 It grew new market segments by widening its scope from process and manufacturing industries to retailing， banking， telecommunications and the public sector。 It focused on Product innovation both on functional and industry specific needs。 The question then is not whether growth is possible but whether companies are willing to take on the growth challenge 。。。more
Nik Weidenbacher
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This book made a lot of sense to me。
Peter L
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This McKinsey sponsored Strategy publication has been timeless for me since it was first introduced to me while working at Unilever Canada。 I believe it was required （suggested） reading from Nial Fitzgerald （Global Co-CEO） at the time。 It's main premise is the tremendous need to pursue various "Horizons of Growth" For example， H1 being the present to 6-12 months out; H2 being 18-24 months out; H3 being 24 to even 48 months out or longer。 Having a continuous flow of vetted （"green lighted"） innov This McKinsey sponsored Strategy publication has been timeless for me since it was first introduced to me while working at Unilever Canada。 I believe it was required （suggested） reading from Nial Fitzgerald （Global Co-CEO） at the time。 It's main premise is the tremendous need to pursue various "Horizons of Growth" For example， H1 being the present to 6-12 months out; H2 being 18-24 months out; H3 being 24 to even 48 months out or longer。 Having a continuous flow of vetted （"green lighted"） innovation products/services or even acquisitions could qualify on the corporate or Strategic Business Unit plans， ensures that large Global Organizations can continue to grow organically in a strategic manner and invest appropriate capital requirements in a manner that over-delivers against growth （profitable） expectations while serving to inspire the company stakeholders not only those directly involved in the projects。 I learned a lot immediately as I was later to work in the Business Innovation/Devlopment group （notice not called "new products） as innovation on such horizons tend to be entirely new business or services to the organization especially those deemed H2 or H3 while H1 projects tend to be new flavours or brand extensions， for example。 。。。more
Omar Halabieh
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Below are key excerpts from the book that I found particularly insightful:1- "Growth's transformative power is akin to the alchemy of old。 Always a mystery， alchemy's magical blend of science， philosophy， art， and spirituality held secrets that even its practitioners found difficult to penetrate。 Still， they were all drawn to its alluring aim: to transform the everyday into the exalted。 The pursuit of corporate growth has prompted a similar reaction in the field of management。 Although excited b Below are key excerpts from the book that I found particularly insightful:1- "Growth's transformative power is akin to the alchemy of old。 Always a mystery， alchemy's magical blend of science， philosophy， art， and spirituality held secrets that even its practitioners found difficult to penetrate。 Still， they were all drawn to its alluring aim: to transform the everyday into the exalted。 The pursuit of corporate growth has prompted a similar reaction in the field of management。 Although excited by growth's promise， executives are uncertain about how to capture it。 Feeling ill equipped to lead a growth charge， many seek a approach that shows them how they can actually attain and sustain growth。 This book is addressed to them。 It attempts to arm business leaders for growth by laying out a proven practical framework for the holistic management of a growing enterprise。 The ideas and approaches suggested here are applicable to businesses and business units of all sizes， in all locations。 They are intended to provide guidance to all levels of business leadership。"2- "Our research makes it clear that very few companies sustain above-average growth for their industry year after year。 Indeed， some of the companies we studied have already suffered slowdowns， and we fully expect more to do so。 But these setbacks do not detract ft-om the lessons to be learned from the sustained phases of growth; indeed， they serve to reinforce the need for new approaches to help executives keep growth going。 Our own approach has been specifically developed to help companies grow throughout the business cycle - not only sailing through the upswings， but also maintaining growth during the downturns。"3- "Horizon 1 encompasses the businesses that are at the heart of an organization - those that customers and stock analysts most readily identify with the corporate name。 In successful companies， these businesses usually account for the lion's share of profits and cash flow。 Horizon 1 businesses are critical to near-term performance， and the cash they generate and the skills they nurture provide resources for growth。 They usually have some growth potential left， but will eventually flatten out and decline。 Without the support of a successful horizon 1， initiatives in horizons 2 and 3 are likely to stagnate and die。 Management's primary challenge in horizon 1 is to shore up competitive positions and capture what potential remains in the core businesses。 Even when these are mature， continuing innovation can incrementally extend their growth and profitability。 Traditional sales force stimulation programs， product extensions， and marketing changes can aim contribute。 Restructuring， productivity enhancement， and cost reduction measures will also help maintain healthy performance for as long as possible。"4- "Horizon 2 comprises businesses on the rise: fast-moving， entrepreneurial ventures in which a concept is taking root or growth is accelerating。 The emerging stars of the company， these businesses are attracting investors' attention。 They could transform their company， but not without considerable investment。 Though substantial profits may be four or five years away， they have customers and revenue， and may already generate some profit。 More important， they are expected to become as profitable as horizon 1 businesses in time。 Horizon 2 initiatives are usually characterized by a single-minded drive to increase revenue and market share。 They need continuing investment to finance rollouts or otherwise accelerate the expansion of the business。 In a few years， horizon 2 initiatives should complement or replace a company's current core businesses。 They may represent either extensions of these businesses or moves in new directions。 Horizon 2 is about building new streams of revenue。That takes time and demands new skills。 Without horizon 2 businesses， a company's growth will slow and ultimately stall。 A good growth company needs to have several of these emerging businesses "on the boil，" working to convert promising ideas into future earnings generators。5- "Horizon 3 contains the seeds of tomorrow's businesses - options on fiiture opportunities。 Although embryonic， horizon 3 options are more than ideas; they are real activities and investments， however small。 They are the research projects， test-market pilots， alliances， minority stakes， and memoranda of understanding that mark the first steps toward actual businesses， even though they may not produce profits for a decade， if ever。 Should they prove successful， they will be expected to reach horizon 1 levels of profitability。 A company that thinks it has a promising horizon 3 just because it compiles a long list of whiteboard ideas at a management retreat is fooling itself。 Without deliberate initiatives to develop good ideas into horizon 3 opportunities， a company's long-term growth prospects will fade。 The options in horizon 3 are rarely proven opportunities， but they need to be promising and to have the support of management。 Building successful businesses means seeding numerous options。 Some will fail for internal reasons; others will fall victim to shifting industry winds。 Most will never grow to become successful new businesses。 Given these odds， a great deal of horizon 3 activity is needed to cover the multitude of possible futures。 A company's goal should be to keep he option to play without committing too much capital or other resources。 The challenge is to nurture promising options while ruthlessly excising those with diminishing potential。"6- "The three horizons can be used to promote growth in three ways。 First， as a diagnostic tool， the three horizons can help managers assess the prospects for growth at any level in an organization and reveal possible gaps in the volume and consistency of new profit sources。 Second， as a language， the three horizons approach offers a coherent way to communicate with employees and investors。 Its simple terminology makes it easier for both groups to understand and discuss corporate priorities。"7- "An excessive focus on growth can be just as much a problem as because they have failed to fill their business creation pipeline。 others lose the right to grow when they become obsessed with new businesses。 The novelty of these opportunities can be so exciting that managers take their eyes off horizon 1， forgetting that it must be maintained in order to provide the financial capacity to drive growth。"8- "Another troublesome pattern occurs when companies have strong horizon 1 businesses and lots of ideas in horizon 3， but few people working to turn these ideas into real businesses。 No matter how exciting the ideas may be， horizon 2 will remain empty until businesses are built。 A company can find itself in an insidious situation as promising horizon 3 options lull it into a false sense of security。 To complicate matters， these options can also inflate market expectations for growth far beyond the company's capacity to meet them。 As the gap between market expectations and the company's actual growth widens， a steep fall in stock price becomes more likely。"9- "If there are no hard and fast numbers to determine ideal balance across the three horizons， how should you define it？ The standard is simple: balance means having the next engine of growth ready when it is needed。 Applying the standard， however， is far from simple。 The definition of balance varies from company to company。 Consider the following factors: Pace of industry evolution。。。Degree of uncertainty。。。Managerial and financial capacity。。。Shareholder expectations。"10- "Pruning the portfolio of businesses through divestment creates capacity for growth。 Although a business unit may still be earning adequate profits， these must be weighed against the opportunity costs of management distraction and competition for resources。 Management attention and other resources are often more productively focused on growth opportunities than on businesses with limited potential。。。Shedding unsatisfactory businesses has the added benefit of signaling strategic intent to both stock markets and employees。 Conversely， not pruning increasingly irrelevant businesses can send mixed messages about a company's direction and resolve to grow。"11- "In our work， we have looked for ways to open managers' eyes to hidden opportunities。 To this end， we have developed a tool that we call the "seven degrees of freedom。" By systematically addressing each degree of freedom in turn。 managers can learn to think more broadly about growth opportunities in their businesses。 1。 How could we increase sales to the same customers with the same product mix？ 2。 How could we extend the business by selling existing products to new customers？ 3。 How could we grow by introducing new products and services？ 4。 How could we expand sales by developing better delivery systems for customers？ 5。 How and where could we expand into new geographies？ 6。 How much could we grow by changing the industry structure through acquisitions or alliances？ 7。 What opportunities are there outside existing Industry boundaries？"12- "Companies are right to be cautious about pursuing growth initiatives。 But to let due caution prevent them considering unusual ideas is foolish。 Collins and Porras strike the right balance: "We're not saying that evolutionary progress equals wanton diversification。。。。 Nor are we laying that the concept of 'stick to the knitting' makes no sense。 The real question is: What is the 'knitting' in a visionary company？""13- "Whether the process is top-down or bottom-up is beside the point。 It is not just the breadth of involvement that matters。 but the breadth of the search。 In the end， whatever the process used and resources deployed， finding attractive opportunities is always as much art as science。"14- "Executives who want to develop horizon 3 options into core profit engines face two big problems: market uncertainty and gaps in their skills， assets， and relationships。 We have found that successful growers typically address these problems by taking not bold leaps， but a series of measured steps。 Each step takes them a little closer to their ultimate :es money in its own right， and adds capabilities that prepare them for further opportunities。 When these growers look back on what they have achieved， they see not a chaotic zigzag but a distinctive staircase pattern。"15- "No formula can substitute for managerial iudement。 Even so analysis of more than 100 growth staircases reveals a consistent pattern。 Virtually all successful staircases proceed in four phases: seeding the initial growth options; testing the the business model; replicating and extending the business; and managing for profitability。"16- "Even when there is strong capability building at each step， migrating an idea from a horizon 3 option to an emerging horizon 2 enterprise and on to a horizon 1 core business is tricky。 The advantage of taking many small steps rather than a few big leaps is that it helps companies manage the risks that arise on two fronts。 First， market uncertainty makes it impossible to predict the success of a business: for every great idea， there are many that will fail。 Second， new businesses call for capabilities that a company does not yet have; without them， the promise these businesses hold out will not be realized。"17- "A broader definition of capability is required that includes all resources useful in gaining competitive advantage。 In addition to operational skill， our definition of capability includes three other classes of resources: privileged assets， growth-enabling skills， and special relationships。"18- "Only by differentiating their management systems across the three horizons can corporations avoid the barriers to growth that most systems inadvertently perpetuate。If all managers are evaluated purely on the profitability of their businesses - a good measure of horizon 1 performance - they will have little appetite for building horizon 2 enterprises。 If some leadership time is not systematically reserved for building fledgling businesses， the needs of the core business will consume all managers' days and nights， and they simply will not have a free moment to build horizons 2 and 3。"19- "Horizon 1 operators: Deep functional and/or industry expertise Strong drive to hit targets and meet plans consistently， Discipline; Horizon 2 Business builders: Entrepreneurial desire to create， Comfort with ambiguity， Top-line-focused， sharp decision makers ; Horizon 3 Visionaries: Champions， Unconventional thinkers"20- "Our research indicates that about three-quarters of the companies that sustain high growth and high shareholder returns make acquisition a critical component of their growth strategies。 They frequently acquire other companies - often up to five a year - to further the development of their growth staircases。" 。。。more
Raj Shankar
，
Interesting read。 Lots of useful thoughts on strategy and growth。
Kim
，
Sometimes a very dry reading at times， it is a very methodical way of analyzing business and figuring out where and how to grow。 Interesting in most parts， in some areas the human element is missing， but still good。 Was a little shocked at one of the company examples used to describe the success。。。Enron！ The book was completed in 1999， and the other examples seemed legit。
Greg
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excellent intro book on strategy
Michael
，
How to build a business to grow and endure long term。
Bibhu Ashish
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http://bibhusmusings。blogspot。com/200。。。 http://bibhusmusings。blogspot。com/200。。。 。。。more
Jim
，