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The three horizons and the 70-20-10 rule in practice: the 23 in Shift23
By Evandro Maciel
Published
Short answer
The three horizons are a McKinsey model for managing growth across three time frames at once: the core business, emerging opportunities and long-term bets. The 70-20-10 rule, described at Google, turns that into effort: most of it on what already works, some on the adjacent, and a small share on the long bets. The 23 in Shift23 comes from horizons 2 and 3.
What are the three horizons?
The model was presented in the book The Alchemy of Growth and summarized by McKinsey Quarterly in 2009. Horizon 1 holds the core businesses, the ones most identified with the company's name, which provide most of the profit and cash flow. Horizon 2 holds emerging opportunities that may generate substantial profit in the future but need investment. Horizon 3 holds ideas for growth further out, such as research projects, pilots or stakes in new businesses.
Why manage all three at once?
Because the time axis in the model doesn't say when to pay attention to each horizon. According to McKinsey, companies must manage all three concurrently, and the urgency of horizon 1 tends to swallow the rest. Caring only for the present leaves you without a next curve; looking only at the future stalls the business that pays the bills.
What is the 70-20-10 rule?
In 2005, Eric Schmidt, then Google's CEO, described a time-allocation rule: 70% on the core business, 20% on related projects and 10% on new businesses unrelated to the current one. It's a simple way to turn the horizons into an effort budget.
How do you apply it in a company or a startup?
The exact split changes from company to company. What tends to work is an order of priorities:
- Efficiency in the core: before inventing, make what exists run better, with less friction and metrics you can trust.
- Validation before scale: every new bet starts small and with criteria, and only what proved its value scales.
- Courage with method: long bets sit in their own portfolio, with a thesis, kill criteria and a decision ritual.
What does 23 have to do with it?
The 23 in Shift23 comes from horizons 2 and 3: the bets that define the years ahead. But no one reaches the future with a stuck present. So the work starts with what already works and makes room, with method, for the next curve.
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