In The Granularity of Growth,¹ we used insights from a proprietary database of large companies to argue that executives need to pursue growth in multiple ways. We disaggregated growth into three drivers: portfolio momentum, or the market growth of the segments in a company’s portfolio; M&A; and market share gains. The exercise showed us that companies outperforming their peers on two or three of these drivers grow faster and achieve better returns than those that outperform on just one. Now, three years later, we can reiterate our advice with more assurance because it’s clear that these multi-faceted growers have withstood the test of the financial crisis and the economic downturn—and continued to outperform.

That’s the first of three findings we share in this research update, which reflects the growth of our database from some 400 companies in 2007 to more than 700 today, as well as the addition of a significant set of smaller companies with annual revenues of less than $3 billion. The second finding is that companies from emerging markets are outgrowing competitors from developed ones at a startling pace. The third is that the smallest companies in our database, with revenues of less than $1 billion, are growing by increasing their market share to a much greater extent than larger companies are. For the latter, the role of share gain is marginal or even negative.