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The Importance of Value-Creating Growth

Value-creating growth builds the advantages of scale and scope, attracts talent, delivers funds for reinvestment, and forces competitor investment. 

Put simply, growth is the most important controllable driver of total shareholder return.

A study of the top-quartile value creators in the S&P Global 1200 from 1993 through 2013 demonstrates the value of growth, even in the short term. Revenue growth accounted for 32% of one-year TSR—more than twice the contribution of increased free cash flow and more than double that of margin expansion. And in the long term, revenue growth was nearly all that mattered, accounting for 71% of ten-year TSR.

Of course, growth isn't easy. Less than half of companies create value in their attempts to grow. But growth is possible regardless of industry sector. On average, variability in growth rates is five times greater within an industry than it is across industries. It's not the cards companies are dealt—it’s how they’re played.

For Growth, Starting Position Matters

When it comes to growth, where you start matters. Not all growth is good. Three starting position archetypes offer insight into which growth moves are most likely to pay off.

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Four Essentials for Good Growth

Delivering value-creating growth demands discipline and, often, a change in mindset.

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Growth Options: Where to Play, How to Win

Achieving value-creating growth is about choices concerning where to play and how to win.

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The Four Keys to Organizing Growth

To sustain long-term growth, organizations need to carefully select their strategies, leadership teams, competencies, and organizational models.

Onwards & Upwards: In Pursuit of Growth

Growth is an irreplaceable source of value creation for business and society. Neither has much of a future without it. How we collaborate, strategize, and innovate and how we embrace new technologies can unlock tremendous growth and value.

Growth is imperative. It’s possible in nearly all sectors. But it’s perilous. Which of the many avenues to growth will create lasting value? This e-book offers BCG's thinking on how to chart a winning growth path.

When the Growing Gets Tough: Charting Your Path to Value-Creating Growth

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Growth

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