McKinsey report: What Walmart, JPMorgan Chase, and Progressive invest in during uncertain times

That stunning fact, unknown to many people (including me), exemplifies the conclusion of a new McKinsey study, published today. In the report, Inspired for business growth: How five companies beat the market, researchers at the consulting firm examined how big companies grow both revenue and profits impressively over time—no easy task.

The study identified 61 companies that outperformed their peers from 2019 to 2024, including the investment bank JPMorgan Chase & Co.; the insurance company Progressive; ASML, the Dutch manufacturer of machines for making chips; and Builder FirstSource, a construction products and services company. This was, of course, a tough period that included the COVID pandemic, followed by inflation and a labor shortage. Still, on average, those companies beat the revenue growth of their peers by an impressive five percentage points and beat annual profitability by seven percentage points. The result: a five-point edge in total shareholder returns.

The researchers found three characteristics common to the winners:

They fund business growth through good times and bad. Easy to say, hard to do when money is tight, but these companies gulp hard and do it.

They build a diversified set of growth engines, not relying on just one or two. Not every venture will succeed. But these companies see opportunities to build growth engines outside their primary business, while leveraging existing assets.

They use technology to make it all go faster. Time is money, especially when companies everywhere are using AI to gain advantage by speed.

Those three traits bring us back to Walmart. Its ad business, Walmart Connect, is an internal advertising platform where sellers can promote goods that may be sold online at Walmart Marketplace or in physical stores, powered by the company’s immense trove of data on shopper behavior. It’s an excellent example of how an already huge company can still grow significantly—and profitably—with imaginative use of assets it already has.

Nailing the balance between tending to core business and building out new lines is the key, explained McKinsey senior partner Greg Kelly. “If you don’t grow in your home market, in your core category, you’re highly likely to underperform,” he told Fortune. “So it is necessary. It’s just not sufficient. It was really reinforced to us that it’s got to be those multiple engines that make you much more likely to outperform.”

The shock of the pandemic showed that prudent investment, even in challenging times, is an important factor in achieving growth. “Everybody says they care about growth,” Kelly said. “But it’s tough, especially in a time like COVID, which was so impactful to businesses, to maintain that investment through the cycle. Only a third did.”

This rigor is the principal factor in the successes examined in the study. “What distinguishes business growth leaders is not better foresight, but greater conviction,” the authors conclude—an observation that should be framed on every CEO’s office wall. “They invest when uncertainty is highest, build capabilities rather than chase headlines, and treat growth as something to be engineered rather than hoped for.”