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Leading Off
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Growth is good—and an imperative for the C-suite. In addition to boosting profits, it enables companies to achieve their broader goals, including those related to sustainability, inclusion, talent, and employee well-being. The likelihood of lifting incomes, providing new opportunities, and funding necessary transitions also increases. But growth can be elusive. According to the International Monetary Fund, GDP growth for mature economies has only averaged 1 percent since the financial crisis of 2008, and growth in emerging economies has also been lower in recent years than at the start of the century. This week, let’s explore the mindsets and actions that can help you lead your organization into an era of stronger growth.
Illustration of two stylized rings on a black background
Make an explicit choice to grow
The best organizations make a deliberate choice to prioritize sustainable and inclusive growth. McKinsey research finds that such “growth leaders” generate 80 percent more shareholder value than their peers over the span of a decade. They’re also able to achieve growth in a downturn. What does it take to be a growth leader? Growth must be a top priority, and mindsets, actions, and capabilities all must align with both short- and long-term growth ambitions. Adopting these seven beliefs—ranging from willingness to fail to favoring action over perfection—allows leaders to grow their revenue or sales twice as fast. Companies that adopt growth mindsets are 2.4 times more likely to outperform their peers; developing operating models with a focus on growth can deliver three times more shareholder returns. By using this holistic growth blueprint, leaders can create the momentum needed to prioritize growth regardless of circumstances. They can act on “timely jolts,” turning headwinds into opportunities, as many did during the COVID-19 pandemic.
That’s the percentage by which a typical company grew in the decade prior to the COVID-19 pandemic, with growth rates slowing to half what they were before the 2008 financial crisis. As Chris Bradley, Rebecca Doherty, and others explain, in the face of rising inflation and geopolitical and economic volatility, McKinsey research shows that these ten rules of growth can guide leaders toward outgrowing their competitors and successfully benchmarking their growth. Among the imperatives: put competitive advantage first, don’t be a laggard, and grow where you know. With only 8 percent of companies excelling at more than half of the ten imperatives, the bar—and potential reward—is high.
“When it comes to profitable growth outperformance—being a mere single-sport athlete is not enough. One can’t be just a swimmer, a runner, or a cyclist. Consumer companies instead need to think and execute like triathletes.”
In this McKinsey article, Jordan Bar Am, Simon Land, Duncan Miller, René Schmutzler, and their colleagues explore the “growth triathlon,” or three main avenues for growth: expanding the core business, innovating into new markets and adjacencies, and chasing opportunities for building new businesses to achieve breakthrough growth. Despite any inclination toward a particular growth pathway, companies can sustain better incremental growth by pursuing all three and are 97 percent more likely to outperform their peers when investing in multiple pathways.
Photo of Susan Wilner Golden
People are living longer, healthier lives, and the longevity economy, which supports them with jobs, services, and products, can be a vigorous growth area for some investors. With a market worth $8.6 trillion in the United States alone and $22 trillion globally, every business should be developing a “longevity strategy” for their offerings and their workforce, says Susan Wilner Golden, author of Stage (Not Age): How to Understand and Serve People Over 60—the Fastest Growing, Most Dynamic Market in the World. In this Author Talks interview, Wilner Golden discusses the opportunities available to companies as this market grows and changes. “People who are at this later stage of life are repurposing, transitioning, and rethinking their life priorities,” she says. “It truly is a renaissance stage…. We’re not in elderhood, we’re in furtherhood. We keep going further, and we have more to look forward to.”
Illustrations of tablets displaying photos of imaginary executives
Marketing has a significant role in driving growth, and the role of chief marketing officers (CMOs) is shifting to “marketing with a capital M.” Rather than being siloed, many marketing departments now have touchpoints across organizations, ranging from HR to technology and innovation. What sets effective CMOs apart in succeeding in their growth agendas? The CMO’s relationship with the rest of the C-suite is a key differentiator. In a recent McKinsey survey, 83 percent of CEOs say the marketing business unit has the potential to be a major growth driver, but only 23 percent believe it’s delivering on that ambition. Companies with high growth are seven times more likely to have “unifier” CMOs—leaders who are strong cross-functional collaborators, put marketing on the C-suite agenda, and champion a shared vision for growth across the organization.
Lead with growth in mind.
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