Rev up your growth engine: Lessons from through-cycle outperformers

Your decisions now will determine how strongly you come out of the COVID-19 crisis—and how well you perform in the next normal.

 
Some corporate leaders still wrestling with the immediate challenges stemming from the coronavirus pandemic may see growth as a distant priority. Once the health of employees is protected and the financial stability of the business secured, however, executives will shift their focus to what’s next. For most, restarting the stalled growth engine will become an imperative—but those who wait until all lockdowns are lifted and a recovery takes hold may find they had waited too long.

Previous economic crises have shown us that companies’ paths to recovery are shaped by their industries, regions, and individual corporate characteristics—but also very much by the actions they take before, during, and after the crisis. Recent McKinsey research found that the outperforming companies during and after the financial crisis entered it ahead of competitors, and came out of it stronger than before. Our analysis of the performance and growth strategies of approximately 2,000 companies between 2007 and 2017 reinforces those conclusions: staying focused on through-cycle growth is critical for long-term survival and the ability to generate excess total returns to shareholders (TRS). That means you need to plan ahead for the next stage of this crisis and for the post-pandemic era even as you navigate the current economic shocks.

Our study shows that roughly one in ten companies achieved higher revenue growth and profitability than the others in our sample over the entire 2007–17 economic cycle as well as during the downturn years. These through-cycle outperformers also delivered excess TRS of roughly 8 percent while the rest hovered around zero throughout the period (Exhibit 1).

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Πηγή: mckinsey