By Lina Irawan 
This astonishing revelation, which undoubtedly comes as a surprise to many, myself included, serves as a powerful illustration of a key finding from a groundbreaking new study published today by McKinsey & Company. Titled Inspired for business growth: How five companies beat the market, the report delves into the strategies employed by major corporations to achieve remarkable and sustained growth in both revenue and profits—a formidable challenge in any economic climate.
The sheer scale of Walmart, a global retail behemoth, makes this advertising fact even more striking. For a company with annual revenues exceeding half a trillion dollars, generating such a significant portion of its operating profit from a seemingly peripheral venture like advertising underscores a profound strategic pivot. This isn’t just about incremental gains; it’s about fundamentally rethinking how existing assets can be leveraged to create entirely new, highly profitable business lines. Walmart Connect, the company’s internal advertising platform, harnesses the immense trove of shopper data accumulated from its vast online and physical store footprint. It allows brands and sellers, often those operating within the Walmart Marketplace or supplying its shelves, to promote their goods directly to Walmart’s extensive customer base. This move positions Walmart not just as a retailer, but increasingly as a sophisticated media platform, directly competing with the likes of Amazon and other major players in the burgeoning retail media space.
The McKinsey study identified 61 companies that managed to significantly outperform their industry peers during the tumultuous period spanning 2019 to 2024. This timeframe was anything but stable; it encompassed the unprecedented disruption of the COVID-19 pandemic, followed by persistent inflationary pressures, and a widespread labor shortage that reshaped global economies and supply chains. Despite these formidable headwinds, the companies highlighted in the report didn’t just survive; they thrived. On average, these high-performing organizations outpaced their competitors in revenue growth by an impressive five percentage points annually and boosted their annual profitability by seven percentage points. This superior financial performance translated directly into a substantial five-point advantage in total shareholder returns, a clear signal of long-term value creation.
The roster of outperformers includes a diverse array of industries and geographies, showcasing that these growth principles are universally applicable. Among them were financial titan JPMorgan Chase & Co., known for its robust banking services and strategic fintech investments; the innovative insurance giant Progressive, a pioneer in data-driven underwriting; ASML, the Dutch manufacturing powerhouse critical to the global semiconductor industry, producing highly specialized machines for chip fabrication; and Builder FirstSource, a leading supplier of construction products and services. Each of these companies, in their unique contexts, demonstrated an ability to navigate complexity and seize opportunities where others faltered.
Through rigorous analysis, McKinsey’s researchers distilled three common characteristics that underpinned the success of these market-beating companies:
1. They Fund Business Growth Through Good Times and Bad.
This principle, while seemingly straightforward, represents one of the most challenging aspects of corporate strategy. In practice, maintaining consistent investment in growth initiatives when economic conditions tighten, or when short-term pressures mount, requires extraordinary conviction and discipline. Many companies, when faced with uncertainty or declining profits, instinctively cut discretionary spending, often including research and development, marketing, and new venture investments. The outperformers, however, demonstrated a counter-intuitive resilience. They "gulp hard," as the original article puts it, and commit to strategic investments regardless of the prevailing economic winds. This isn’t about reckless spending; it’s about a deeply ingrained belief in the long-term strategic vision and a willingness to absorb short-term financial discomfort for future gains.
This characteristic is closely tied to the idea that true growth leaders prioritize conviction over mere foresight. While predicting the future is impossible, having the conviction to invest in capabilities and opportunities, even when the outcome isn’t guaranteed and uncertainty is high, sets them apart. During the COVID-19 pandemic, for instance, while many businesses hunkered down, a select few—only about a third, according to Greg Kelly, a McKinsey senior partner—maintained or even increased their growth investments. These companies understood that downturns, while challenging, can also present unique opportunities for market share gains, talent acquisition, and strategic repositioning as competitors retreat. They saw beyond the immediate crisis to the long-term trajectory of their industries and made calculated bets on their future relevance and expansion.
2. They Build a Diversified Set of Growth Engines, Not Relying on Just One or Two.
In today’s rapidly evolving business landscape, single points of failure are increasingly perilous. Companies that put all their eggs in one basket, relying solely on their core business or a limited number of product lines, expose themselves to significant risk from market shifts, technological disruption, or intensified competition. The successful companies identified by McKinsey actively cultivate a portfolio of growth engines, understanding that not every venture will succeed, but a diversified approach increases the overall probability of sustained expansion.
Walmart Connect serves as a perfect embodiment of this strategy. While Walmart’s core business remains retail, its advertising arm represents a significant new revenue stream that leverages existing, often underutilized, assets. The company already possesses an unparalleled physical footprint, an immense customer base, a vast network of suppliers, and an enormous repository of granular shopper data—from purchase history and browsing behavior to demographic insights and geographic patterns. Walmart Connect transforms these "hidden" assets into a potent advertising platform, allowing brands to target customers with precision, whether they are shopping online or in a physical store. This diversification mitigates reliance on traditional retail margins, which can be notoriously thin, and taps into the high-margin world of digital advertising. It also strengthens relationships with suppliers, offering them new tools to drive sales, thereby reinforcing Walmart’s position as a critical partner. This strategy mirrors the success of Amazon’s advertising business, which has grown into a multi-billion-dollar enterprise by leveraging its e-commerce data and traffic. For Walmart, this isn’t just about adding revenue; it’s about strategically positioning itself in the digital economy and defending its market share against formidable online competitors.
Beyond Walmart, other companies in the study likely demonstrate diversification in their own ways. JPMorgan Chase, for example, has aggressively invested in fintech, blockchain, and digital banking services, diversifying beyond traditional lending and investment banking. Progressive has continually innovated with usage-based insurance and data analytics to offer tailored products, expanding its appeal beyond conventional offerings. ASML, while highly specialized, invests massively in R&D to continuously innovate its technology, ensuring it remains indispensable to a rapidly evolving semiconductor industry, effectively diversifying its technological lead.
3. They Use Technology to Make It All Go Faster.
In an era where digital transformation is no longer optional but imperative, speed is a critical differentiator. The winning companies harness technology, particularly advanced tools like artificial intelligence (AI), not merely for efficiency, but to accelerate every facet of their operations and strategic initiatives. Time is indeed money, and the ability to bring products to market faster, respond to customer needs more quickly, or optimize internal processes with greater agility confers a substantial competitive advantage.
Technology, especially AI, allows these companies to move at an unprecedented pace. Predictive analytics can forecast demand with greater accuracy, optimizing supply chains and inventory management. Machine learning algorithms can personalize customer experiences, leading to higher engagement and conversion rates. Automation streamlines repetitive tasks, freeing human capital for more strategic endeavors. From faster product development cycles to quicker market insights gleaned from vast datasets, technology acts as a force multiplier. For example, AI can analyze Walmart’s shopper data to identify trends, optimize ad placements, and even predict future purchasing behaviors, making Walmart Connect an even more powerful tool for advertisers. This isn’t about chasing fleeting technological fads but about deeply embedding robust technological capabilities into the core of the business to enhance decision-making, operational efficiency, and customer value. The emphasis is on building sustainable technological advantages that drive growth, rather than merely adopting the latest headlines.
McKinsey senior partner Greg Kelly further elaborated on these findings, stressing the delicate balance required for sustained success. "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." This insight highlights a crucial strategic tension: companies must continuously nurture and innovate their foundational businesses, as they remain the bedrock of their operations, while simultaneously exploring and investing in new, diversified growth avenues. Neglecting the core can lead to erosion of market share and profitability, but relying solely on it can lead to stagnation and vulnerability in a dynamic marketplace.
The period of the pandemic, with its intense and widespread disruption, served as a stress test for corporate strategies. Kelly noted that the shock of COVID-19 revealed which companies truly had the conviction to invest prudently even in the face of immense uncertainty. "Everybody says they care about growth," Kelly observed. "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 stark statistic underscores that while the desire for growth is universal, the resolve and strategic rigor required to achieve it, particularly during adversity, are rare.
Ultimately, the McKinsey study concludes with a powerful, almost philosophical, observation about the nature of true growth leadership. "What distinguishes business growth leaders is not better foresight, but greater conviction," the authors write. This profound insight should resonate with every CEO and senior executive. It implies that success isn’t about having a crystal ball to predict the future perfectly, but about having the unwavering commitment to a strategic vision, the courage to invest when others hesitate, and the discipline to build robust capabilities rather than chasing ephemeral trends. These leaders "treat growth as something to be engineered rather than hoped for," meticulously planning, executing, and adapting their strategies to cultivate sustained expansion, rather than simply wishing for it. This rigorous, proactive approach transforms growth from an elusive aspiration into a tangible, achievable outcome.