As low growth and uncertainty drag on, domestic corporations are in Hanchang to find new growth engines. Massive investments are continuing in artificial intelligence (AI), semiconductors, batteries, biotech, and future mobility, and moves to reorganize business portfolios are also accelerating. At the same time, as the market raises the bar for capital efficiency and return on investment, the ability to generate growth again in core existing businesses is becoming as important as betting on new areas.
However, the larger corporations grow and the more their existing businesses mature, the tougher questions remain for the chief executive officer (CEO). "How do we reignite growth in core businesses that have already scaled?"
Boston Consulting Group (BCG) recently found the answer in "vitality" in its report, "The Power of Vitality: How CEOs Reinvent Growth in Large Public Companies," which analyzed more than 3,500 global corporations. Vitality refers to a corporation's capability to create future growth through innovation rather than current performance.
◇ What growing large corporations do differently
According to BCG's analysis, among large corporations with a market capitalization of $25 billion or more, the top 25% in vitality recorded an average annual revenue growth rate of 11.5% over the five years since 2020. That far exceeds the overall large-corporation average of 6.6%.
Their annual total shareholder return (TSR) was also 3.1 percentage points higher than that of the bottom 25% in vitality. In particular, corporations that started at a low level and significantly improved vitality over five years had an annual TSR 6.8 percentage points higher than the rest.
Corporations with high vitality shared three traits: high growth ambition, high talent density, and a growth-centric culture. These three elements reinforce one another. High growth ambition attracts top talent, and when they produce innovation, it creates a "growth flywheel (virtuous cycle)" that leads to even higher growth and ambition.
◇ Innovation should start in the core business
BCG views vitality not as an innate corporate trait but as a managerial capability that can be measured and improved. Based on this, it analyzed corporations with high vitality and proposed five action principles CEOs should take.
First, move the stage for innovation from the corporation's periphery to the core business. Do not stop at assigning innovation to separate units such as digital labs or in-house ventures; each business unit should create new growth opportunities.
Second, manage future growth capabilities like key performance indicators (KPIs). Do not wait until revenue or operating profit deteriorates; instead, continuously check leading indicators that signal future growth, such as research and development (R&D) momentum, innovation talent, and organizational structure.
Third, growth needs a clear owner. Among the top leadership—such as the CEO, chief financial officer (CFO), or chief strategy officer (CSO)—appoint a person responsible for jointly managing growth strategy, investment, and organizational capabilities.
Fourth, focus on the most critical growth tasks. Rather than changing everything at once, identify the areas that are most vulnerable versus competitors and that constrain future growth, and concentrate capital and leadership attention there.
Fifth, embed vitality as an operating model, not a one-off project. Build a structure in which growth goals, talent, and organizational culture are connected and operate together.
◇ For Korean corporations, after AI comes "redesigning the growth engine"
There are implications for Korean corporations as well. According to BCG's analysis, Korean corporations show strengths in AI and digital capabilities and innovation talent, while there appears to be room for improvement in the organizations and management systems needed to connect these strengths to sustained growth.
Recently in Korea's business community, efforts are spreading to use AI and software to reorganize existing core businesses for the next stage of growth. Sustainable growth depends less on how many new businesses are launched and more on how relentlessly core businesses can be reinvented. In the low-growth era, the CEO's role is expanding beyond finding new growth engines to designing and managing the "growth engine" that enables the corporation to generate its next growth on its own.