Brian Gubernick breaks down a McKinsey study showing companies in the top 20-25% of growth rates are five times more likely to become market leaders. Once annual growth drops below 20%, regaining momentum becomes exponentially harder. He lays out a framework: set a growth target, identify two or three scalable levers, assign ownership, and track weekly.
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Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every single day brings a new opportunity to get better. Today I want to cover something that I most recently came across and read, and I'll tell you what, It made an awful lot of sense to me, and I thought I had to share it with our No Days Off Nation, who like me are entrepreneurs building big businesses, always looking for different strategy or ways to improve the strategy, looking for that edge. Well, today I want to talk about your action item first. I want, I want to, I want to give you an action item to start first, okay? I want you to audit your company's current growth rate against your industry's top performers. So, so look at your current growth rate year over year, and then at least mentally think about your industry's top performers and how they're growing. And then I want you to ask, are we growing fast enough to matter? Or Are we slowly becoming irrelevant? If you're not growing, you're dying. You've probably heard that phrase before, both in business and personally. And today, I think we're going to unpack why that's not just a motivational phrase, but I also think it's measurable and it's, it's truly a strategic truth. So in 2014, McKinsey, who's a consulting company, released this paper titled "Grow Fast or Die Slow." I'm pretty sure I read it many years ago, but I just recently reread it. And I don't remember a lot of it. So clearly I didn't retain a whole lot, but I've gotta tell you, I think it actually might be more relevant right now than it was, you know, 10, 11 years ago. The premise of the paper is simple. Companies that grow quickly early in life are significantly more likely to survive, lead, and create massive long-term value. Again, I'm going to say that one more time. The premise here is that companies that grow quickly early in life are significantly more likely to survive, to lead, and to create massive long-term value. So what does that mean? It means that those that don't Those that don't grow quick— quickly early in their life, they tend to stall out. They get left behind, or even worse, they, they die slowly. Here's what's fascinating though. The numbers actually behind this don't lie. This isn't an ego sort of thing. It's not a go big or go home sort of thing. It's grow fast or never make it past the middle, and the numbers say that. So let's dive a little deeper into this core finding. McKinsey studied thousands of companies across all different sorts of industries. Here's the 3 key things that they found. Companies in the top 20 to 25% of growth rates were 5 times more likely to become market leaders. So number 1, companies in the top 20 or 25% of growth rates were 5 times more likely to become market leaders. Number 2, fast growth was the number 1 predictor of long-term success, even ahead of profitability, even ahead of operational efficiency. Fast growth was the number 1 predictor of long-term success. And then number 3, once a company fell below a certain annual growth rate, which is around 20%, it became exponentially harder to reignite the growth. So once you stopped growing at least 20%, it became almost impossible to reignite the growth. Now, why? Because growth compounds. Fast-growing companies attract better talent. Fast-growing companies raise more capital. They innovate faster and they dominate market share. They become flywheels. They become these self-fulfilling machines. Those companies that lag behind, they're playing defense from the very start. Now, why is growth greater than everything else? McKinsey went even further on this subject. They looked at what actually drives total shareholder return, which is a fancy way of, of saying long-term value creation. Here's what they found. Number 1, revenue growth accounted for more than half of long-term value. Number 2, margin expansion. Margin expansion accounted for about 20% of long-term value. And then number 3, cash flow improvements. Cash flow improvements created another 20 to 30% of long-term value. So the translation here is, you know, real simple. You cannot cut your way to greatness. You can't optimize your way into a leadership position within the market. At some point, you need top-line growth to win. And for a lot of businesses, especially early-stage, service-based, or even founder-backed or founder-led companies, you can't wait around for it to happen organically. You have to manufacture urgency around growth. Now, how might all this apply to you? How that— how might this apply to all of our No Days Off Nation members? Whether you're a business owner or a team leader, even a high-level individual contributor, how does this matter to you? It means you have to start treating growth like a survival metric. I want you to ask yourself, are we growing faster than our competitors? Is our customer base expanding? Are we adding more value than we did 12 months ago? Is the market talking about us more or talking about us less? Now, this is all true whether you run a real estate team or a SaaS business or a mastermind group or a brick-and-mortar store selling widgets. You are either earning relevance daily through growth or you're slowly becoming invisible. Now, there is danger of falling below what McKinsey calls the speed limit. They call it the growth speed limit. When a company drops below 20% annual growth, it rarely regains its momentum. It becomes harder to hire, harder to raise money, harder to excite the team. And what happens? You start looking for ways to cut rather than to build. And once you start optimizing a slow growth business, you've already lost. You don't optimize your way to relevance, you outpace your way there. So, I want to give you what I believe to be a real simple framework around how to get back on a growth trajectory. Number 1, I would set a non-negotiable growth target. Not something that's based on last year, but something based on what great looks like in your present space. Forget about the past. What's great look like right now in your industry or your current space? Set a non-negotiable growth target. Maybe even, you know, if you listen to last week's, one of last week's episodes, an impossible goal. Then number 2, identify 2 or 3 scalable levers. Maybe it's a new market segment or a price strategy, some sort of product innovation. But in other words, let's get focused on 2 or 3 scalable lever, levers and stop being mediocre at all these things. Let's become masters of 2 or 3 things that are going to allow us to hit that growth target. Number 3, assign ownership. Who's on the hook for each one of these levers? And then number 4, increase the transparency. Create massive transparency. Track these numbers weekly, not quarterly, not we'll revisit this later, at a minimum weekly if not daily. I think most businesses are actually, they're not really starved for strategy, they're starved for focus. They're starved for for speed. So, as we wrap up, here's what I think is the truth. We like to talk about, you know, or romanticize, I should say, the grind. You know, the slow and steady, you know, climb, the bootstrap sort of hustle. But if the goal is actually long-term impact, according to McKinsey's research, the best companies, not just grow, they grow fast and they do it very, very early. Because in business, just like in nature, speed matters. And the faster you grow, the more gravity you create, and the more gravity you create, the harder it is to actually be ignored. So again, ask yourself, are we growing fast enough to matter or are we slowly becoming replaceable? I would recommend you choose speed and you choose momentum and you choose relevance. That's all I have for you today, the No Days Off Podcast. Thank you so much for listening, and remember, every single day brings a new opportunity to get better. So let's get after it.
