Although economic optimism is rising overall, Chief Financial Officers (CFOs) still face numerous stubborn challenges: low growth and weak productivity, diminished pricing power under cost pressures, and rising capital costs.

Gartner refers to these converging factors as the"Deadweight Economy", in stark contrast to the more favorable economic environment of the decade before the pandemic. In this environment, CFOs feel pressure to manage costs. However, a decade-long Gartner study of large enterprises found that a group of top-performing "efficient growth companies" have found ways to make bolder growth bets and unlock growth during difficult times.

These companies have achieved sustained revenue growth and margin expansion simultaneously for years, even as peers struggle with economic volatility. The question is how these efficient growth leaders manage to control costs while still funding the growth initiatives that set them apart from their peers.

Growth Ladders and Growth Anchors

"Growth ladders" are a series of projects, programs, or incentives that CFOs adopt to drive larger-scale growth investments. While adopting these measures is not inherently harmful, they do not directly address the underlying risk aversion of business leaders—which persists even when they are encouraged to take on more risk.

What truly sets leading efficient growth companies apart is how they seek to mitigate or remove what Gartner calls "growth anchors." Especially in environments where the finance function is trying to tightly control costs, it can easily create stumbling blocks that hinder the implementation of growth.

In one case, a technology company with revenue exceeding $20 billion established a growth investment committee for business leaders to secure funding for ambitious ideas. However, the process to get onto the committee's agenda was extremely bureaucratic, including filling out lengthy business case templates just to be considered, followed by multiple layers of approval before receiving partial funding for a project still in the ideation stage. For many business leaders, it was easier to simply abandon growth bets, which ultimately became a "growth anchor."

In another case, the finance department of a global industrial company was pushing business units to develop new products. But when pricing analysis was needed around a potential product to move the project forward, the company would hand it off to a distant center of excellence, which already had a queue of 14 projects, and results might not return for two weeks. Or, when a new product required hiring engineers, the process would get stuck at corporate headquarters, failing to find suitable candidates in a timely manner. The finance department was urging business growth on one hand while depriving the business of the capabilities needed for growth on the other.

Other examples of growth anchors include processes that hinder action: finance builds management reports to support decisions around growth projects, but by the time decision-makers receive the data, it is often too late to be useful. Additionally, there is short-termism: every monthly or quarterly business review asks "Why did you overspend on this project by 4%?" and "Why was last quarter's forecast off by 7%?"—these are short-term issues that distract from long-term risks and opportunities. However, starting to think about how to remove anchors, rather than just following the usual process, can lead to very different outcomes.

For example, a CFO at a manufacturing company realized when starting to think about growth anchors that their financial operational reviews aimed at improving performance were having the opposite effect—these reviews were always dominated by rearview-mirror considerations, arguing about which numbers were correct, explaining budget variances, and so on.

So, this CFO compressed the financial review into a 15-minute agenda item at the end of a multi-hour meeting, devoting most of the time to discussing emerging risks and opportunities, customer changes, market shifts, and similar topics. This kept discussions forward-looking and provided information far more valuable than before.

Strategies to Mitigate Growth Anchors

Leading growth companies proactively remove growth anchors. A good starting point is to help business managers submit business cases by providing easy-to-use tools to calculate the return on investment (ROI) of their proposed investments. This reduces bureaucracy by streamlining lengthy activities and encourages business managers to submit ideas without hesitation.

Address the "no-failure" culture by setting predefined exit triggers to alleviate concerns about investments going off track and prevent high-risk growth bets from being prematurely terminated. This helps business managers feel more comfortable proposing and managing growth bets, and also makes leadership more confident in approving them, while prioritizing long-term learning over chasing "sure wins" to meet short-term metrics.

To illustrate this, let's examine the case of a CFO at a consumer goods company: they realized their incentive structure was acting as a growth anchor. Business leaders' compensation was heavily dependent on achieving targets set during the budgeting process, but their key growth bets were in emerging markets, where economic volatility made it highly uncertain whether the company could achieve its goals.

This made it difficult for the organization to attract the best talent to manage these critical growth opportunities. This CFO led a redefinition of performance criteria, placing greater weight on controllable management decisions, and as a result, more business leaders became willing to take on higher-risk roles.

In fact, this is largely a mindset shift. It cannot solve economic volatility, but paving the way for growth innovation is precisely the hallmark of the companies best able to navigate volatility.