2. Mailing Lists
  3. in
  4. Is your organization’s growth consistent? A leader’s guide

Archives

Help us to know you better

Register Now for webinar - Unleashing the power of Generative AI at the edge

Is your organization’s growth consistent? A leader’s guide

Growth spurt ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
Leading Off

Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities

Most leaders know they need to look for growth opportunities despite ups and downs in the business landscape. But even if opportunities abound, finding those that turn in consistent growth can be difficult. Tried-and-true methods may not yield the returns they once did, and new ventures may not necessarily create value year after year. This week, we explore some growth strategies that may prove more effective in the long term.
An image linking to the web page “CEOs’ choice for growth: Building new businesses” on McKinsey.com.

In our annual surveys on new-business building, CEOs have consistently rated creating new revenue streams as a top priority. This year, public-equity investors and analysts are following suit. In a separate survey of these groups in September 2023, nearly two-thirds of the respondents say that “it would be advantageous for organizations to increase their investment in new-business building over the next year,” according to McKinsey senior partners Markus Berger-de León, Paul Jenkins, Ari Libarikian, and coauthors in their report on the survey results. “A majority see business building as an effective method for an organization to increase its valuation.” Our survey of companies bears this out: 20 percent of revenues at respondents’ organizations came from new businesses built within the past five years, up from 12 percent last year.

That’s from a research study led by McKinsey partners Matt Banholzer, Rebecca Doherty, Alex Morris, and contributors. Innovative growers are organizations that excel in both growth and innovation. The companies surveyed are a highly diverse group, spread across four continents and ten industries and including both well-known brands and start-ups. But what they have in common is a commitment to link innovation to growth aspirations. “For instance, our review of the innovative growers’ earnings calls reveals that they talk about innovation twice as much as their peers, and, in those conversations, emphasize innovation as a means to create profitable and sustainable growth,” say the McKinsey researchers. Most innovative growers achieved TSR above their industry median over a ten-year period.
An image linking to the web page “Author Talks: How nondisruptive creation can unlock economic growth” on McKinsey.com.

“Companies can innovate and achieve growth without displacing industries, companies, or jobs,” asserts author and INSEAD professor Renée Mauborgne in a conversation with McKinsey on the concept of nondisruptive growth. “It is a positive-sum approach to innovation and growth that allows business and society to thrive together.” Disruption tends to occur when companies create a new market in an existing industry, triggering displacement; nondisruption, by contrast, happens when businesses develop a new market outside the bounds of existing industries, rarely threatening established players or generating backlash from stakeholders. “If there are disruption opportunities, [companies] will pursue them, but they must consider the cost and benefits,” says Mauborgne. “At the same time, there’s the nondisruptive approach. As a CEO, I want to consider both sides and what makes the most sense for the company.”
An image linking to the web page “The growth code: Shrink before you grow” on McKinsey.com.

Lead by seeking consistent growth opportunities.

— Edited by Rama Ramaswami, senior editor, New York

Leading Off will be taking a brief break for the US Thanksgiving holiday. We’ll be back on Monday, December 4. Thank you for reading!

Share these insights

Did you enjoy this newsletter? Forward it to colleagues and friends so they can subscribe too. Was this issue forwarded to you? Sign up for it and sample our 40+ other free email subscriptions here.

This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy.

You received this email because you subscribed to the Leading Off newsletter.

Manage subscriptions | Unsubscribe

Copyright © 2023 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007
by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:51 - 20 Nov 2023