The next generation of growth

For most of my career, growth has been one of those words that everybody agrees with until you start asking what it actually means.

In one company, growth means winning more customers. In another, it means increasing share in an existing market. It can mean entering a new geography, raising prices, improving retention, launching another product or acquiring a competitor. All of these are legitimate ways to grow, and for many businesses the biggest growth opportunity is still to become much better at the business they already have.

But I think something is changing.

Markets move faster. Technology changes what can be offered and how quickly it can be created. Customer expectations migrate between categories. Industry boundaries become less useful. New competitors can appear from places that weren’t previously considered part of the competitive landscape. AI is accelerating some of these changes further by dramatically reducing the cost and time involved in researching, designing, testing and building new things.

In that environment, I don’t think growth can only be something we plan for once a year and then hand over to sales and marketing to deliver.

The ability to create new sources of value is becoming a capability in its own right.

And that changes the growth conversation.

Growth starts closer to home than we sometimes think

There is a temptation, particularly when a mature business wants new growth, to immediately look somewhere new. A new market. A new customer segment. A new product category. Perhaps an entirely new venture.

Sometimes that is exactly the right answer. But it is easy to overlook how much potential still exists inside the business you already have.

McKinsey’s research on growth has consistently found that the core business remains responsible for the majority of corporate growth. In one analysis, roughly 80 percent of growth across sectors came from maximising the value of the core, while sustained outperformers supplemented that with expansion into adjacencies and breakout businesses.

That makes intuitive sense to me.

Companies accumulate assets over time that can be surprisingly difficult for newcomers to replicate: customers, distribution, data, technology, expertise, relationships, intellectual property, operational capabilities and, perhaps most importantly, knowledge about a market.

The interesting question is not simply how to squeeze more growth out of those assets. It is what else they might enable.

A company may understand a customer problem it has never tried to solve. A capability built for one product may have value in another market. Data generated as a by-product of today’s business may enable a completely different service. A distribution relationship may provide access to customers for a proposition that doesn’t yet exist.

Seen that way, growth isn’t always about moving further away from the core.

Sometimes it is about looking at the core differently.

The important point is that these aren’t competing philosophies. A healthy growth portfolio can contain all three.

McKinsey’s more recent research supports that broader view. Its 2025 study found that top-performing innovators don’t only innovate within their existing businesses; they are substantially more likely than peers to build or acquire businesses beyond their current industries. BCG’s research into mature companies that reignited growth similarly identifies combinations of increasing share, shifting toward faster-growing parts of the portfolio, changing how companies sell and creating new offerings.

The question isn’t whether growth should come from the core or somewhere new.

It is whether the company has enough ways to create it.

Growth is increasingly a design problem

This is where I think the traditional separation between strategy and innovation becomes less useful.

Strategy might tell us where we want to play. Customer research can help us understand unmet needs. Technology reveals new possibilities. Commercial teams understand where customers are buying and where they aren’t. Finance tells us what needs to be true economically.

But none of those things, individually, creates a new source of growth.

Somebody has to connect them.

A new proposition has to solve something sufficiently important for a customer. The experience has to make sense. The company needs the capabilities to deliver it. The economics have to work. There needs to be a credible way of reaching the market, and all of this needs to be tested against reality before too much money has been committed.

That is why I increasingly see growth as a Business Design challenge.

The job isn’t simply to identify attractive markets. It is to design a business capable of creating and capturing value within them.

Deloitte describes business model innovation in similar terms: how an organisation positions itself to create, deliver and capture value through the relationship between its value proposition, differentiating capabilities and monetisation model.

I like the create–deliver–capture distinction because growth fails when we focus too heavily on one of the three.

We can create enormous customer value without finding a viable way of capturing enough of it economically. We can have excellent economics on paper without creating enough customer value for anybody to buy. And both are irrelevant if the organisation can’t actually deliver the proposition consistently.

Growth happens when those things begin to reinforce each other.

The problem with the big idea

There is another reason I think the way we approach growth needs to change.

Companies often place enormous pressure on individual growth ideas.

Once an initiative has been through strategy, secured funding and acquired senior sponsorship, it can become politically and psychologically difficult to admit that an assumption was wrong. The project moves subtly from “Is this a good business?” to “How do we make this business case come true?”

Those are very different questions.

The first encourages learning. The second encourages confirmation.

I would rather treat growth as a portfolio of possibilities that become more or less attractive as we learn about them. Some ideas should progress quickly. Some need more evidence. Some should combine with others. Some should stop.

That doesn’t mean lowering ambition. In fact, I think it allows companies to be more ambitious because they don’t have to be certain about an idea before exploring it.

What matters is controlling the size of the bet while uncertainty is still high.

A rough proposition tested with real customers costs less than building a product. A prototype costs less than launching a business. A limited commercial experiment costs less than scaling nationally. At each stage, we can decide whether the evidence justifies increasing the investment.

This is where the language of innovation sometimes becomes unnecessarily complicated. To me, the principle is fairly simple:

Make the investment grow as the evidence grows.

That matters particularly now because our ability to test ideas is changing. AI and modern digital tools have made it dramatically faster to research markets, develop propositions, create realistic prototypes, test communication, analyse customer responses and sometimes build working products.

That doesn’t make growth automatic. But it does reduce the cost of learning.

And companies that can learn faster can afford to explore more possibilities before deciding where to commit.

The scarce resource isn’t ideas. It is attention.

Most established organisations already contain a surprising number of potential growth ideas.

They live in strategy decks, innovation programmes, product backlogs, customer research, sales conversations and, perhaps most importantly, in the heads of people who spend their working lives close to customers and markets.

The challenge is rarely generating another hundred ideas.

It is deciding which few deserve the organisation’s attention.

That requires choices.

How large could the opportunity become? How strongly does it connect to capabilities we already possess? What new capabilities would we need? Can we create meaningful differentiation? Do the economics have the potential to work? How quickly can we learn whether the assumptions are right? And how does the opportunity compare with everything else competing for the same people, capital and leadership attention?

This is where growth strategy becomes portfolio strategy.

The strongest companies don’t only decide where to invest. They also become good at reallocating resources as the evidence changes. McKinsey’s research on through-cycle growth has repeatedly highlighted resource reallocation and continued investment in growth as characteristics of companies that outperform through periods of uncertainty.

I think that last part is especially important today.

When uncertainty rises, the instinct is often to protect the existing business, cut discretionary spending and wait for greater clarity. Sometimes that is financially necessary. But there is a danger in treating growth as something that can simply be switched off until conditions become comfortable again.

BCG’s 2026 analysis of long-term value creation found revenue growth to be responsible for roughly half of ten-year total shareholder return in its dataset and argues that a cost-only strategy becomes increasingly difficult to sustain over longer periods.

You can make a business more efficient without making it more valuable to customers.

Eventually, somebody still has to create the next reason for customers to choose you.

From growth initiatives to a growth system

This leads to what I think may be the more important shift.

Growth shouldn’t only be a collection of projects.

It should become a repeatable organisational capability.

A company that repeatedly finds promising customer problems, combines them with emerging possibilities, designs viable propositions, tests the critical assumptions and scales the things that work has something much more valuable than a single successful innovation.

It has built a growth system.

The company continuously observes what is changing in customers and markets, understands the capabilities it can leverage, and pays attention to technological, cultural and competitive shifts.

From those inputs it creates possibilities. It turns the strongest possibilities into something concrete. It tests whether they create and capture value. It scales what works. And, crucially, it feeds what it learns back into the next cycle.

The advantage isn’t simply that this produces more innovation.

It makes growth less dependent on occasional flashes of inspiration or a once-a-year strategy process.

BCG’s two-decade review of innovative companies points in a similar direction: sustained innovation capability, rather than isolated initiatives, is associated with stronger long-term performance, particularly through periods of disruption.

I think this is where the next generation of growth becomes interesting.

Growth is the ability to create what comes next

For a long time, companies could build a strong proposition, optimise it, expand distribution and continue growing around essentially the same business for many years.

That world hasn’t disappeared. Great core businesses still matter enormously.

But the useful life of an advantage feels shorter. Customer expectations move between industries. Technology changes the economics of what is possible. AI is beginning to reshape both products and how companies operate. New business models can emerge around existing markets surprisingly quickly.

The implication isn’t that companies need to reinvent themselves every year.

It is that they need to become better at continuous business creation.

Sometimes that will mean making the existing proposition meaningfully better. Sometimes it will mean moving into an adjacent part of the value chain. Sometimes it will mean creating an entirely new business.

The common capability is being able to see where value could be created next and then move from possibility to evidence quickly enough to do something about it.

That is also why I don’t see innovation as something that should live in a separate corner of the organisation. Growth requires the people who understand customers, technology, operations, economics, product and commercial reality to work around the same problem.

It requires imagination, certainly.

But it also requires choices, making, testing and the discipline to stop when the evidence isn’t there.

Perhaps most importantly, it requires accepting that the business you have today cannot be the only source of the business you will have tomorrow.

So when I think about the next generation of growth, I don’t primarily think about another growth framework or another list of channels.

I think about a capability.

The ability to continuously design what comes next — and turn the best possibilities into real businesses.