As financial organisations mature, they often face declining growth as innovation gives way to inertia. In order to achieve consistent levels of growth throughout their corporate lifetimes, firms must attend to existing core businesses while still considering areas they can grow in the future. The three horizons framework featured in the commentary on corporate strategy entitled The Alchemy of Growth, provides a structure for companies to assess potential opportunities for growth, without neglecting performance in the present.

Horizon one represents those core businesses most readily identified with the company name and those that provide the greatest profits and cash flow. Here, the focus is on improving performance to maximise the remaining value. Horizon two encompasses emerging opportunities, including rising entrepreneurial ventures likely to generate substantial profits in the future but that could require considerable investment. Horizon three contains ideas for profitable growth down the road – for instance, small ventures such as research projects, pilot programs, or minority stakes in new businesses.

The Alchemy of Growth seeks to cut through the uncertainty executives face in making their companies grow by drawing lessons from the experiences of 30 of the most successful growth companies. By analysing how successful companies devise and implement growth strategies, the authors found that linking together a series of measured steps in a “staircase” of sequential growth can deliver extraordinary results.

Although culturally suited to a technology solutions oriented organisation, such as Vision Critical, this plate-spinning approach to growth strategy applies equally to the lending environment.   This structured approach offers a lens for positioning growth efforts within your organisation, while staying focused on your core strengths today.