Practical growth: How "supergrowers" win the race for revenue

How do some companies grow faster than others? We know the whys—that growth depends on positioning, differentiation, resources, market trends, innovation, and so on. It’s the how that interests us. What do leading companies do differently that drives them to grow faster than competitors, many of whom face the same market conditions and have similar resources?

To answer this question, we have identified the ten large public companies in each of five industries—fifty companies in all—that have grown the fastest over the last two years. We’ve excluded from the list companies that owe most of their growth to M&A; buying companies is an important path to growth, of course, but we wanted to focus on organic growth, to better understand how the most successful companies maximize the growth potential of the assets they have. Some household names make the list, but most of them are relatively unknown—not surprisingly. A few of them are unicorns, founded within the last few years, but one got started in the 18^th century, though no one would call it a dinosaur. 

(Click here for an overview of our methodology)

We analyzed their performance, looking for patterns within and across industries, commonalities and outliers, and other insights. We also compared their behavior to what we learned from the AlixPartners Disruption Index, an annual survey of 3,000 senior executives worldwide. In each of the last two years, 18%—about one in five ADI respondents—told us their company sets the pace in its industry when it comes to growth. These growth leaders display patterns of investment, decision-making, and behavior that set them apart and are exemplified by the 50 supergrowers on this list.

In the articles that follow, we will look at each of five industries in turn (sharing additional metrics on the 10 companies on each list): consumer goods, industrials, media and telecommunications, retail, and technology. Each industry has its own competitive dynamics, is affected differently by macroeconomic circumstances, and is buffeted by unique combinations of disruptive forces. Yet for the group as a whole, four things stand out:

1.  The fastest growers are not exempt from the disruption that so often derails the growth plans of other companies. On the contrary, they are in the thick of it—more likely to experience a high level of disruption.

Growth leaders are 50% more likely to say they face a high level of disruption. But they are also more than twice as likely to drive disruption rather than react to it.

For them, however, disruption is an opportunity. Over three-quarters (78%) of growth leaders say they usually or always drive disruption in their industry; less than half as many slower growers say they drive disruption. NVIDIA, for example, has both driven and profited from the disruptive avalanche of artificial intelligence. Or take The Trade Desk, the #3 grower in an industry (media and telecommunications) whose legacy champions have been disrupted by digital advertising. The Trade Desk is of one of the disruptors—an agency that allows advertisers to bypass both Google and traditional media to place their ads directly in front of buyers on the open internet. Similarly, PDD Holdings (owner of Temu) has disrupted the usual retail value chain by allowing Chinese apparel makers to use its platform to sell directly to consumers.

2.  The fastest growers shake things up internally, not just externally. Fully 58% of growth leaders expect significant change in their business models in the coming year, compared to 33% of the others. Netherlands-based Redcare Pharmacy, #9 on the retail list, has changed its business model as often as Netflix has: Beginning in 2001 as Shop Apotheke, a brick-and-mortar drugstore in Germany, it added a mail-order non-prescription line as soon as that was legalized, then moved again into mail-order and online prescription sales, while expanding its reach across the EU, to the point where it now serves more than eleven and a half million customers.

3.  When it comes to new lines of business and new technologies, they are ravenously hungry, but relentlessly practical. Fast-growing companies are 25% more likely than their peers to be pursuing new lines of business—often that’s why they build new business models—and likewise more aggressively deploying new technologies. They are also significantly more likely to say artificial intelligence is critical to their growth strategy. Symbiotic, the #1 supergrower on the industrials list, has creatively combined advanced robotics with AI to make warehouses so compact and efficient that its customers can reduce their warehouse footprints by 30-60%.  

While both leaders and laggards are deep into digital transformation, the growth leaders are getting much higher returns. They chase after value, not shiny objects. Nearly half (45%) say their digital transformation investments earn an ROI greater than 10%; something achieved by only 12% of the others.

4. They focus, expanding aggressively where they have the right to win and taking an equally bold approach to costs, operations, and margin expansion. Growth leaders are about 20% more likely to have renegotiated supplier prices, sought out new suppliers, and adjusted pricing strategy compared to others. This combination of market and financial discipline is a hallmark of a very traditional retailer on the fastest-growers list—and the oldest company, W.H. Smith, founded in 1792. Number 8 on the retail list, the U.K. based owner-operator of news-books-and-convenience-stores is familiar on high streets throughout Britain, but has expanded to become ubiquitous in airports worldwide, and increasingly visible inside hospitals—markets that are almost immune to e-commerce. W.H. Smith’s secret of success in retail is “location, location—and capital allocation.” The company combines a keen eye for growing markets with a strict policy of investing only where it achieves an economic profit—i.e., a return higher than the cost of capital—which creates a compounding “reinvestment advantage” that drives growth. 

Better growth practices have produced these success stories, not better growth theories. There’s nothing secret about what goes into the sauce: Dare to be bold, prioritize pace over perfection, deliver better go-to-market effectiveness, pricing, and customer success and retention, and focus on value creation. These characteristics, combined with industry smarts and executive team determination, are the recipe for “supergrower” status.