Recession is not something that companies or people willing embrace. It can come unexpectedly and hit your hard just the way it did in 2007. The Great Depression that occurred in December 2007 hit us hard. The GDP fell by 27% and the unemployment rate touched 10%. This happened precisely because most companies or businesses prepare very little for such critical situations. If economists are to be believed, the global business space is to going to face another downturn (if not a major recession) in the near future. So, the question begs –are you really prepared to deal with it this time?
In this article at Harvard Business review, the authors highlight why business leaders should prepare for any unwarranted situations that are likely to overturn the economic ecosystem globally.
The Risk Factor
The global business landscape has changed drastically with new technological advancements, digital disruptions, and so on. Thus, the need to stay ahead in the game and curb major vulnerabilities is more important than ever. Going by research reports, many companies did not face the brunt of the global recession last time rather they gained advantage from it by preparing themselves beforehand.
The Downturn Strategy
Here’s a sneak peek into what they did that can act as a revelation for other companies as well.
- Some leaders acted early considering the early warning calls much before the recession set in.
- Companies with a long-term outlook fared better during the last recession with 4 percentage points higher annual growth.
- Some companies looked beyond survival. They focused on annual growth rather than cost cutting.
Apart from what they did, there are several new factors that should be considered by companies while preparing a downturn strategy. To read the complete viewpoint and research, click on the following link:
To read the original article in full, click on the link here – https://hbr.org/2019/04/companies-need-to-prepare-for-the-next-economic-downturn