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Innovative growers

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Innovative growers

A view from the top

McKinsey Quarterly,

5 min read
4 take-aways
Audio & text

What's inside?

Ambitious companies that deliberately pursue both growth and innovation enjoy greater profits and shareholder returns.

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Editorial Rating

8

Qualities

  • Applicable
  • Eye Opening
  • Bold

Recommendation

For most companies, the current business environment is one of constant disruption and chronic unpredictability. One thing does appear certain, however: According to research from McKinsey & Company, companies that embrace both innovation and growth – “innovative growers” – outperform their industry peers and provide better returns for their shareholders. Innovative growers accomplish these feats by setting their aspirations high, promoting a company culture that emphasizes and creates the capacity for innovation, and opening pathways for growth via strategic mergers and acquisitions.

Summary

Innovative growers give shareholders a better return on investment than their industry peers.

McKinsey & Company surveyed 650 substantial public companies that grew relative to their industry peers between 2016 and 2021. Of these, 53 organizations grew and innovated more than their peers. “Innovative growers” outperformed in terms of shareholder returns and overall profitability: Two-thirds of innovative growers generated profits that placed them in the top fifth of Global 2000 organizations.

Innovative growers can operate in any sector, but among those surveyed, most were technology, manufacturing, media and telecom, or consumer services-focused businesses. These companies employ some shared “best practices” that organizations in any industry can emulate.

Innovative growers make innovation central to their overall business strategy.

Innovative growers do so well financially compared...

About the Authors

Matt Banholzer is a partner in McKinsey’s Chicago office; Rebecca Doherty is a partner in the Bay Area office; Alex Morris is a partner in the Toronto office; and Scott Schwaitzberg is an associate partner in the New York office.


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