Here is an excerpt from still another outstanding article written by Lowell Bryan, John Horn, and Sven Smit, featured online by The McKinsey Quarterly (September 2011), published by McKinsey & Company. To read the complete article, obtain information about the firm, access other resources, and sign up for email alerts, please click here.

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No matter what happens, investors will reward companies that master the art of growing under pressure.

It was a summer of downwardly revised forecasts, wildly gyrating stock markets, slipping consumer confidence, and the ongoing drama of the eurozone sovereign-debt crisis. The forecast for autumn does not reassure. The Chicago Board Options Exchange Volatility Index (VIX) is following a pattern eerily reminiscent of 2008 immediately before Lehman failed and the financial crisis hit in earnest. The potential for a new financial earthquake in the next few months seems real.

Even if we avoid a new crisis, hopes for a desirable, V-shaped recovery that would deliver annual medium-term GDP growth of 2 to 3 percent in the developed world are no longer realistic. We do not make economic forecasts or pretend to have a crystal ball. But scenarios we developed in 2009 to frame the global economy’s uncertainties have proved to be generally in line with what has happened globally over the last two years. Now persistent stagnation in Europe and renewed weakness in the United States suggest that our scenarios need downward adjustment as we move ahead.

Today, the real issue is whether the developed world’s GDP will grow modestly, at around 1 percent, or remain flat or decline, perhaps seriously. Executives are feeling the gloom. In our most recent poll [See “Economic Conditions Snapshot, September 2011: McKinsey Global Survey results,” mckinseyquarterly.com, September 2011], 29 percent said they believe that stalled globalization, in both developed and emerging markets, is the likeliest among four choices—the largest share ever choosing that answer since we started asking the question, in January 2011. Only 31 percent believe that the developed world will return to strong growth over the next decade [This question included a scenario in which developed and emerging markets regain solid growth trajectories (chosen as the likeliest one by 18 percent of the respondents) and a scenario in which emerging markets slow down while developed ones resume growth (chosen by 13 percent).] Indeed, the developed world’s debt load, compared with that of emerging markets, provides a convincing basis for this view [Please click here to see chart].

In retrospect, none of this should come as a surprise. The attempts of governments to provide short-term relief through fiscal and monetary stimulus aside, history suggests that any rebound after a financial crisis caused by too much leverage is long and difficult. As our colleagues at the McKinsey Global Institute (MGI) have pointed out, the drag on global growth may prove even more persistent this time because the process of deleveraging is starting later and will take longer. The sharp rise in government borrowing means that the difficult “belt tightening” process that MGI’s analysis of history suggests we can expect—in which the ratio of total public and private debt to GDP could eventually fall by as much as 25 percent—has not yet even begun.

Despite the headwinds, many businesses—especially large multinationals in the developed world—steam steadily ahead. Corporate earnings and cash flows have never been stronger. Most companies have used this financial muscle over the last few years to build large cash reserves and to become better capitalized. Best of all, the fundamentals driving economic growth in emerging markets still seem likely to prove self-sustaining, promising decent future economic growth in most of these countries, even if the developed world continues to struggle.

[During the remainder of the article, the co-authors share their thoughts about “how to go for growth” in a “slow-growth world.” To read the complete article, please click  here.]

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Lowell Bryan is a director in McKinsey’s New York office; John Horn is a consultant in the Washington, DC, office; and Sven Smit is a director in the Amsterdam office.