Oct 245 min read

Growth with Courage: How Leaders Help Their Business Thrive in the Face of Uncertainty

A Pathway to Transform Business: Leading Growth with Courage

In today’s fast-paced and unpredictable business environment, sustained growth is an elusive goal for many organizations. According to a recent McKinsey study, fewer than one in four companies outpaced their industry peers in both revenue and profit growth during challenging periods. What differentiates these exceptional companies? The answer is courage—a willingness to take bold risks, innovate, and adapt in the face of uncertainty.

The Role of Courage in Business Growth

Over the past five years, businesses have faced unprecedented disruptions: from the COVID-19 pandemic and rising inflation to geopolitical tensions and the rapid advancement of technologies like generative AI. During such times, many organizations adopt a cautious approach to ensure survival. Yet, the companies that truly thrive and outperform their competitors are those that adopt a courageous growth mindset. These businesses remain steadfast in their commitment to growth, innovation, and societal impact, no matter the challenges they face.

Courageous companies do not simply play it safe. They boldly invest in emerging technologies such as data-driven digital transformations, analytics, and AI to fuel their core businesses while also exploring new growth opportunities. McKinsey’s research confirms that companies that consistently reallocate resources and take strategic risks tend to outperform their peers. For example, top-performing innovative companies reported a four percentage point higher cumulative total shareholder return (TSR) from 2016 to 2022 compared to their peers.

A Pathway to Transform Business: Leading Growth with Courage

Courageous companies show their ambitions in four key areas:

1. Building an Innovation Culture

A critical strategy for courageous growth is fostering an innovation-driven culture. Innovative companies consistently invest in research and development (R&D) and digital capabilities, allowing them to stay ahead of market trends and capitalize on new opportunities. According to McKinsey, companies that focus on innovation achieved a 16% higher median return on invested capital than other growth outperformers. Embracing an innovation mindset enables businesses to not only scale existing products and services but also create entirely new growth sources.

John Deere exemplifies this courage in action. Under the leadership of CEO John May, John Deere accelerated the integration of smart technology into its agriculture, construction, and forestry products. To further fuel innovation, the company established the John Deere Fellows Program, recognizing employees who contribute to groundbreaking products. This focus on continuous improvement and innovation paid off significantly. In 2023, John Deere reported a 60% increase in quarterly profits and raised its earnings guidance to nearly $10 billion. The company’s courage to invest in innovation and empower its employees helped it succeed even during challenging times.

2. Prioritizing Sustainable Growth for the Core Business

In addition to innovation, courageous companies prioritize sustainable and inclusive growth. Organizations that excel in both financial performance and environmental, social, and governance (ESG) goals are better positioned for long-term success. McKinsey’s analysis shows that companies improving their ESG scores alongside strong financial performance achieve two percentage points higher annual excess TSR than those focusing solely on profitability. This “win-win-win” mindset—creating value for customers, the planet, and the company—positions businesses for sustained success.

One example of this strategy in action is DSV, a global transport and logistics company. DSV aggressively raised its sustainability ambitions, reducing carbon emissions while achieving a nine-fold increase in TSR from 2014 to 2022. Through customer-centered innovations like the Green Logistics initiative, DSV successfully created value while contributing to a more sustainable future. This dual focus on profit and sustainability underscores the value of integrating ESG into a company's growth strategy.

3. Dare to Shrink in Order to Grow

Although it may seem counterintuitive, sometimes shrinking is necessary for long-term growth. About 30% of companies identified as growth outperformers pursued strategies that included divesting non-core assets, allowing them to reallocate resources more effectively. While these companies may experience temporary revenue declines, streamlining their operations positions them for future growth.

Autoliv, a leading manufacturer of airbags and seatbelt systems, exemplifies this "shrink to grow" strategy. In 2018, Autoliv spun off its electronics unit to focus on its core business. Despite the short-term reduction in revenue, the company quickly recovered and achieved record growth by 2023. Autoliv’s willingness to make tough decisions ultimately set the stage for future success.

4. Engaging Employees to Drive Transformation

Growth isn't just about strategy and financial investments—it’s about people. Courageous leaders empower their workforce, giving employees ownership over transformation initiatives. McKinsey’s research shows that when more than 20% of employees are directly involved in achieving transformation milestones, companies see a 60% increase in excess TSR compared to industry benchmarks over 24 months.

A great example of employee-driven transformation is Walmart. The retail giant’s investments in AI and automation not only improved operational efficiency but also enhanced customer experiences. By equipping its employees with the tools and skills necessary for success, Walmart has been able to continuously grow both its core and breakout businesses. This empowerment fosters a culture of accountability and innovation, where everyone is invested in the company's long-term success.

The Courage to Grow

In a world filled with uncertainty, companies that choose courage over caution are the ones that will lead the way in innovation, sustainability, and long-term profitability. Whether through fostering a culture of innovation, embracing ESG goals, or making bold strategic decisions, these businesses demonstrate that growth is possible, even in the most challenging times. By investing in their core strengths, pursuing new opportunities, and empowering their people, courageous companies unlock their full potential and stay ahead of the competition.

As leaders, the question is not whether to grow but how boldly and courageously we are willing to pursue that growth.

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