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Some of the most spectacular stories of corporate growth revolve around big bets — long-term investments, bold pivots, and major acquisitions. Think of ASML, which pursued next-generation semiconductor manufacturing technologies for more than 30 years; Adobe, which abandoned perpetual licenses in favor of cloud subscriptions; or Disney, which acquired Pixar, Marvel, and Lucasfilm in quick succession.
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, we 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. We found that de-risking growth does not rely on making smaller bets, or on making bold moves less frequently. Rather, it requires a different approach at every stage of the growth cycle — from identifying opportunities, to executing on them, to managing risk across a portfolio of initiatives.
Learning From Low-Risk Growth Strategies
To study growth in the absence of economic tailwinds, we focused on industries in which aggregate revenues grew less than global GDP over the past 10 years. As expected, we found that in these challenged sectors, achieving high growth rates (more than 8% annually over our period of investigation) is hard: Out of the more than 1,200 companies we evaluated, fewer than 120 achieved that level of growth. (See “Significant Growth Without Big Bets.”)
Around half of those companies achieved their extraordinary growth by making big bets — major pivots in their business models or industry footprints, or acquisitions exceeding 20% of their market cap. They were rewarded with a median annual total shareholder return (TSR) of 5.5% over the 10-year period we studied, with the top quintile among them even generating a remarkable 13% annual TSR.
However, there was another, similarly sized group of companies that achieved comparable revenue growth rates without making such major moves. These low-risk growers recorded a median annual TSR of 4.2% — clearly outperforming the other 90% of the companies operating in these low-growth sectors, which achieved a median annual TSR of -1.2%. With a top-quintile TSR of 8%, the low-risk growers did not achieve nearly the same upside potential as their higher-risk peers. However, they also limited their downside risk, with only 17% recording negative TSR over the course of the decade — compared with 30% of the big bettors.
Overall, our empirical analysis shows that even in the absence of economic tailwinds, companies can achieve significant growth without taking major risks.
Low-Risk Growth: Four Key Elements
So, what did these successful companies do differently? Across them, we observed four recurring patterns that we think of as components of an operating system for lower-risk growth.
1. Commercializing internal capabilities
When chasing growth, organizations often start from a market perspective — looking for higher-growth sectors that they are not currently serving, and developing products or services tailored to them. However, 33% of the lower-risk growers in our sample instead focused on monetizing internally used assets or capabilities in new ways by offering them as products or services to external clients.
Stride, an education technology company, is one player in our sample that pursued such a strategy. It began as an operator of virtual public schools, using a platform and curricula it had developed. Over time, the company recognized that the learning management system it had built for virtual K-12 schools had value beyond that use. Stride began licensing its technology to school districts, government agencies, the military, and private companies — offering education software as a service for institutions looking to run their own learning programs. This has driven significant growth for Stride.
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.
Applying that approach, a consumer packaged goods company with strong marketing capabilities might begin selling marketing services; a retailer with advanced last-mile optimization capabilities might offer route planning and carrier selection as a service to e-commerce brands; or a wholesaler with advanced demand-forecasting capabilities might repackage its models into an analytics subscription for manufacturers.
To get this approach right, companies first need to choose the right capability to sell. For one thing, it needs to be valuable — which means that it must be demonstrably superior to existing offerings or capabilities built by others. Often, these are support or back-office functions that others may underinvest in. Yet, this capability should not be a company’s only or most crucial source of differentiation — otherwise, providing it to peers would risk commoditizing competitive advantage.
Walmart’s GoLocal offers a compelling illustration. Having built a vast last-mile delivery network to serve its own customers, Walmart launched GoLocal in 2021 to offer delivery as a service to other retailers. The move works precisely because last-mile logistics, while valuable, is not what sets Walmart apart: The company’s competitive edge rests on pricing, assortment, and the density of its physical footprint.
Once the right asset or capability has been identified, it needs to be turned into a marketable offering. Companies must build a new sales and marketing engine around this product, targeting a distinct set of clients. Pu
