How to Grow Without Betting Big

Some of the most spectacular stories of corporate growth revolve around big bets — long-term investments, bold pivots, and major acquisitions.  The companies and leaders that pull off such moves are celebrated as heroes.  But not every company is comfortable making big bets — particularly in volatile times. Our recent research showed that when faced with high-uncertainty events, 90% of companies pulled back rather than doubling down. So, what about a growth strategy not for the heroes but for the rest of us? How can businesses reignite or sustain growth without betting big? It’s a particularly pressing question at a time when economic tailwinds that aid corporate growth are slowing.

To find answers, the authors evaluated more than 1,200 companies operating in industries structurally challenged on growth, taking a close look at players that grew without relying on high-risk moves.  Overall, their empirical analysis shows that even in the absence of economic tailwinds, companies can achieve significant growth without taking major risks.  The authors observed four recurring patterns that the author think of as components of an operating system for lower-risk growth.

Commercializing internal capabilities.  33% of the lower-risk growers in the sample focused on monetizing internally used assets or capabilities in new ways by offering them as products or services to external clients.  Under that approach, existing assets that have already been built and internally battle-tested are turned into engines for new growth — with less upfront capital and time investments required compared with greenfield innovation. 

Acquiring growth catalysts.  Another common strategy companies use when searching for growth is buying market share (by acquiring direct competitors) or buying growth (by acquiring existing businesses in higher-growth industries).  To succeed with this strategy, a company must identify capability gaps that are preventing it from entering new growth verticals. Starting out, it should formulate an explicit thesis

Building a growth portfolio with multiple options.  Successful lower-risk growers in the sample pursued an optionality strategy, running a portfolio of bets in parallel. A notable 33% of our sample used this approach. On average, those players launched three new growth initiatives per year. By running many smaller-scale experiments, companies can limit the potential downside of each single option — and reduce the risk of one failed big bet negatively impacting the company’s future.

Enter into smart partnerships

Individually, each of these approaches reduces risk at a different stage of the growth cycle: in opportunity identification (by capitalizing on what you already have and/or limiting deal size), in execution (by sharing exposure with a partner), and in risk management (by diversifying across bets). By combining them, companies can form a powerful operating system for lower-risk growth.

This course of action requires a very different mindset than a high-risk strategy that revolves around big bets. While big bets in uncertain times can pay off, the reality is that many leaders shy away from this path. Our research reveals a complementary truth for them: Patient, disciplined growth — rooted in existing capabilities, small acquisitions, smart partnerships, and diversified bets — delivers returns well above those realized by peers stuck in the low-growth status quo. Growing in a challenging economic environment, it turns out, is not just for the high-risk gamblers.

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