McKinsey's Seven Degrees of Freedom for Growth
The Seven Degrees of Freedom for Growth frames growth choices as rings radiating out from your core business, from selling more to existing customers through to opening entirely new competitive arenas, so you can see how big a stretch each option really is.
Concentric rings spread out from a small core at the centre, each ring further out than the last.
Reach for this when…
- Growth has stalled in the core and everyone's pitching a different fix.
- You're weighing a new geography against a new product line and comparing apples to oranges.
- The growth plan is really just 'more of everything', with no sense of risk.
How to run it
- Map your current core business as the centre point.
- List growth options at each degree: more from current customers, new customers in the same market, new products and services, new value-delivery approaches, new geographies, new industry structure through alliances or acquisitions, and entirely new competitive arenas.
- Rate each option by distance from the core and by risk.
- Weight the portfolio towards options close to the core, with a few further bets.
- Revisit the map as the core business itself shifts.
A worked example
Situation. Freja Nielsen runs Nordisk Mobler, a furniture manufacturer in Aarhus, Denmark, whose leadership team had six separate growth pitches and no way to compare them.
Applied. She laid all six against the degrees of freedom: two were selling more to existing buyers, one was a new geography (exporting to Australia), and one was a new business entirely (a retail showroom brand). Seeing the spread by distance from the core made the risk visible for the first time.
Result. She funded the two close-in options immediately, greenlit the export push with a smaller budget and a review date, and shelved the retail brand until the core was stronger.
The catch
The framework is a sorting tool, not a scoring one - it tells you how far a bet sits from home, not whether it's a good bet. Two options can sit in the same ring and be wildly different in quality. Use it to structure the conversation about risk, not to replace judgement on each option.
The bet furthest from your core is also furthest from what you're actually good at. Fund it like you know that.
Origin: Mehrdad Baghai, Stephen Coley & David White (McKinsey)