Amid persistent volatility and rising cost pressures, corporate finance teams face growing difficulty delivering profitable growth. Yet a subset of companies has managed to expand revenue, improve margins and allocate capital efficiently over the past decade, generating a significant premium in shareholder returns.

New research from Gartner identifies four financial strategies that distinguish these “efficient growth” firms, based on an analysis of more than 1,500 companies across the S&P 500, S&P 400 and S&P 600. Gartner identified 105 organisations that consistently achieved above-industry revenue growth, margin expansion and capital efficiency, delivering a 51% total shareholder return premium between 2014 and 2024.

Rather than relying on isolated financial levers, these organisations adopt interconnected approaches to liquidity, cost structure and capital allocation, creating what Gartner describes as a self-reinforcing growth model.

“Volatility and economic shifts make profitable growth increasingly elusive for most CFOs,” said Randeep Rathindran, Distinguished Vice President in the Gartner Finance practice. “To succeed, CFOs should try to emulate efficient growth companies by linking liquidity management, structural cost of goods sold (COGS), and sales, general and administrative (SG&A), and disciplined debt use into a self-reinforcing growth strategy.”

The findings suggest that finance leaders increasingly need to balance traditional financial discipline with strategic investment, supply chain resilience and capital structure governance.

1. Paying suppliers sooner to boost the bottom line

Notably, efficient growth companies tend to operate with a longer cash conversion cycle (CCC) than peers. While shorter CCCs are typically seen as a hallmark of strong liquidity discipline, the research shows that leading firms deliberately extend working capital to secure long-term cost advantages and supply continuity.

“Counterintuitively, efficient growth companies exhibit a longer CCC than their non-efficient growth companies,” Rathindran said. “While this may appear to be a weaker liquidity discipline, the underlying strategy is intentional.”

Efficient growth firms often expedite supplier payments or provide deposits and premiums to secure capacity, particularly in industries exposed to supply volatility and inflationary pressures. For example, Gartner cites a semiconductor firm that agreed to shorter payment terms and paid premiums to secure production capacity, protecting revenue growth in a constrained market.

The report frames this approach as cost-conscious liquidity management, where working capital is used as a strategic lever rather than a metric to minimise. In an environment of geopolitical disruption and supply chain fragmentation, predictable supply and price stability can outweigh the benefits of tighter working capital cycles.

This finding challenges long-standing assumptions about working capital optimisation. Extending payment terms has historically been a primary objective, but the research suggests that deliberate liquidity deployment can be a procurement and risk management tool. This approach requires stronger liquidity buffers, committed funding lines and closer coordination between treasury, procurement and FP&A.

2. Invest in areas competitors cannot copy

Another defining trait of these companies is how they structurally reduce costs and redirect the savings into areas that competitors struggle to match.

“Efficient growth companies are more successful than peers in lowering their cost of goods sold (COGS) as a percentage of sales and reallocating those resources towards value-driving areas, such as R&D, customer experience, or AI transformation,” Rathindran said.

Lowering COGS often involves divesting high-cost operations, consolidating manufacturing footprints to unlock scale efficiencies and deploying automation and analytics to improve throughput and reduce waste. Rather than treating cost savings as margin expansion alone, efficient growth firms channel freed-up capital into investments that are difficult for competitors to replicate.

The report highlights structural redesign of operational footprints as a recurring theme, with companies reshaping production and logistics networks to improve efficiency and resilience. These structural moves provide a funding source for strategic initiatives without increasing leverage, reinforcing the link between cost discipline and capital allocation.

This underscores the importance of integrating cost transformation with funding strategy. Structural COGS reductions increase internal funding capacity and reduce dependence on external capital, strengthening financial flexibility and lowering the cost of capital over time.

3. Zero-based SG&A redesign

Leading firms have also rethought SG&A at a structural level. Gartner’s analysis shows that these companies started the last decade with higher SG&A as a percentage of revenue compared with peers, but executed a significant reset by 2024. Efficient growth firms reduced SG&A from 20% of revenue in 2014 to approximately 15% in 2024, while other companies achieved only marginal reductions over the same period.

“This wasn’t a result of zero-base budgeting, but rather zero-based design - a fundamental rethink of SG&A function structures, processes and teams in the light of AI-native workflows,” Rathindran said.

Structural changes included reducing corporate real estate footprints to reflect hybrid working patterns, selective adoption of AI for operational workflows and headcount optimisation informed by productivity analytics. The research suggests that efficient growth firms redesigned support functions around technology and data, rather than incremental cost-cutting exercises.

This redesign improves operating leverage and enhances free cash flow predictability, which has direct implications for capital allocation, dividend policy and funding decisions. Structural SG&A transformation can materially affect cash flow forecasting accuracy and the capacity to support strategic investment without increasing debt.

4. Intentional Debt Deployment

While efficient growth firms maintain lower leverage than peers, the research shows that they do not avoid debt altogether. Instead, they use debt selectively to accelerate strategic initiatives

“Efficient growth companies consistently maintained lower Total Debt-to-Equity ratios than non-efficient growth companies throughout the period of this analysis,” Rathindran said. “However, low leverage does not mean zero leverage; these firms still carry debt-to-equity ratios of around 50%.”

These firms deploy debt for acquisitions, capital investments and transformative projects, enabling rapid execution of high-confidence opportunities beyond the pace of organic cash generation. The report emphasises that debt is treated as a strategic accelerator rather than a liquidity lifeline.

This reinforces the shift toward disciplined leverage strategies tied to return thresholds and strategic priorities. Treasury’s role extends beyond funding execution to capital structure governance, ensuring debt deployment aligns with long-term value creation rather than short-term liquidity needs.

Liquidity, capital allocation and the finance operating model

Taken together, the four strategies highlight a shift in how finance leaders approach growth. Efficient growth firms treat liquidity, cost structure and capital structure as an integrated financial architecture, rather than separate functional domains.

The deliberate extension of CCC to secure supply stability challenges traditional working capital benchmarks and suggests a more dynamic approach to liquidity management. Structural COGS and SG&A redesign demonstrate that cost transformation can be a funding engine for strategic investment. Selective debt deployment underscores the importance of capital discipline and timing.

Gartner’s findings also suggest that efficient growth requires deeper integration between treasury, FP&A, procurement and corporate strategy. Liquidity decisions affect supplier relationships and cost structures, cost savings influence capital allocation capacity and capital structure choices determine the speed at which companies can pursue strategic opportunities.

In an environment of persistent volatility, this integrated approach may become increasingly critical. CFOs and treasurers face pressure to balance resilience with growth, optimise working capital while securing supply chains and deploy capital with discipline while maintaining flexibility.

The research suggests that efficient growth is less about any single financial lever and more about orchestrating multiple financial strategies into a coherent operating model. For finance leaders, the challenge lies in embedding these practices across the organisation while maintaining governance, risk discipline and transparency.