McKinsey studied 61 companies that overcame serious crises; see what they had in common

Did you know that Walmart’s advertising business accounted for about 30% of the company’s operating profit last year? Did you even know that Walmart has an advertising business?

This surprising fact, unknown to many people (including me), exemplifies the conclusion of a new McKinsey study. In the report “Inspired for Business Growth: How Five Companies Beat the Market”, researchers from the consultancy analyzed how large companies manage to significantly expand revenue and profits over time — no simple task.

Also read: Amazon’s beginnings: Bezos had an office in a rented garage and held meetings in a bookstore

The study identified 61 companies that outperformed their peers from 2019 to 2024, including investment bank JPMorgan Chase; the Progressive insurance company; ASML, a Dutch manufacturer of chip production machines; and Builders FirstSource, a construction products and services company.

It was, of course, a difficult period, which included the Covid pandemic, followed by inflation and labor shortages. Yet, on average, these companies outperformed their competitors’ revenue growth by an impressive five percentage points and annual profitability by seven percentage points. The result: a five percentage point advantage in total shareholder return.

The researchers identified three characteristics common to the winners:

1. They finance business growth in good times and bad. Talking is easy; do, not so much, when money is tight — but these companies take a deep breath and move on.

2. They build a diverse set of growth engines, without relying on just one or two. Not every initiative will be successful. Still, these companies see opportunities to create new engines of expansion outside their core business, while leveraging existing assets.

3. They use technology to speed up everything. Time is money, especially when companies around the world use artificial intelligence to gain an advantage through speed.

These three characteristics take us back to Walmart. Its advertising business, Walmart Connect, is an internal platform where sellers can promote products sold online on Walmart Marketplace or in physical stores, driven by the company’s immense data on consumer behavior.

It’s an excellent example of how an already gigantic company can still grow significantly — and profitably — with creative use of the assets it already has.

Striking the balance between taking care of the core business and developing new fronts is essential, explained McKinsey senior partner Greg Kelly.

“If you don’t grow in your home market, in your core category, you’re very likely to underperform,” he told Fortune. “So it’s necessary. It’s just not enough. It’s become very clear to us that you need to have multiple engines to significantly increase your chances of outperforming the market.”

The shock of the pandemic showed that investing with discipline, even in difficult times, is an important factor in achieving growth.

“Everyone says they care about growth,” Kelly said. “But it is difficult, especially in a period like Covid, which has had such a huge impact on businesses, to maintain this investment throughout the cycle. Only a third managed it.”

This rigor is the main factor behind the successes analyzed in the study. “What distinguishes business growth leaders is not a superior ability to predict the future, but greater conviction,” the authors conclude—an observation that should be framed on every CEO’s office wall.

“They invest when uncertainty is greatest; they build capabilities rather than chasing headlines; and they treat growth as something to be planned and executed, not simply expected.”