Depending upon which pundits you may listen to, there has been significant discussion around an impending economic downturn. Regardless as to whether you believe this to be the case, we can all agree that the cyclic nature of the global economy guarantees that we will be faced with tough economic conditions at some point within our working years. A significant risk of economic downturn alone is enough to change consumer behaviors, which could then impact our broader business ecosystem. This then will impact how organizations communicate with and meet the needs of their respective customers.
It’s difficult enough for companies to stand out in performance and product during times of economic expansion. Those that have figured out how to navigate the competitive landscape well enough to be considered an “established brand” often struggle to maintain that relevance in favorable economic environments. The task becomes many-fold more difficult as the macroeconomic conditions of large markets (global, national, or regional) deteriorate toward stagnation or full-blown contraction. Corporate managers will be challenged to focus their decision making around the attributes that have created success for their respective organizations from inception and to ensure that their brands continue to resonate with their targeted customer base, while continuing to aggressively compete for additional market share.
The last two major US economic downturns: the late 1970s and more recently the Great Recession of 2008 – 2012 provided an opportunity to observe the successful strategies and tactics of well-managed brands that not only survived the downturn but in some instances thrived. Brands like ITT, Lehman Brothers, and General Motors can be counted among the casualties of consumer economic hardship from both periods. While on the other hand, companies like Microsoft, Southwest Airlines and Amazon saw unparalleled growth and expansion. What are the attributes that separated the latter group of brands from the former? What decisions, advantages, commonalities, and approaches were used to expand in such tough economic conditions?
While there are several well-thought-out strategies that I could point to, my primary focus is to highlight key principles that are easily relatable to your particular enterprise (no matter what it may be). I, by no means, want to oversimplify what it takes to navigate the “choppy waters” of recessions, depressions and/or market contractions but in an attempt not to “boil the ocean” it is critical to hone in on what appears to be most important. Below are the four focal principles:
- Accept the hand you’ve been dealt!
- Singular Focus, Duality of Action
- Re-Invest in Specific Pockets of Growth
- Strengthen the Meritocracy
My subsequent four blogs will focus on each respective point above. The thought is to expound upon how each tenet can help your organization thrive in times of turbulence. Each will be explored in a non-prescriptive way, to shed light on its particular impact on your likelihood of continued success.
Let Starr & Associates help you navigate economic downturns before they happen.