Recession strategies

Citation

Randall, R.M. (2009), "Recession strategies", Strategy & Leadership, Vol. 37 No. 3. https://doi.org/10.1108/sl.2009.26137caa.001

Recession strategies

Article Type: Editor's letter From: Strategy & Leadership, Volume 37, Issue 3

The current worldwide recession is a game changer. It’s creating a new business environment for products and services that offer exceptional value – unique combinations of utility and low price. Suddenly markets in many industries are subject to immediate change without notice as new competitors find success. For example, $3,000 laptops with all the features to delight a road warrior are out, while stripped down $300 netbook microcomputers that fit in your pocket are in. Today’s customers have different needs and desires. Conspicuous consumption is out and customer reassurance marketing is in. And strategic management is going to have to learn faster if it is to place winning bets in a game with new rules.

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  For insights into recession marketing I recommend Kenneth Grossberg’s article “Marketing in the Great Recession: an executive guide.” He explains the elements of the new consumer mindset and offers a creative new model for marketing – Indulgent Parsimony.

Companies will have to streamline to survive, but cost-cutting must be done based on new business realities. Resources will have to be redeployed to support new opportunities and that means companies need to reassess the risks of supporting some of their other businesses in the recession environment.

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  Strategy & Leadership asked the author of The Wisdom of Teams for his advice and his response was “How to cut costs in a recession – with help from employees.” Experienced consultants Jon Katzenbach and Paul Bromfield have found that a workforce that is actively involved in the initiative and understands the need to make tough decisions can reduce costs more and sustain the reductions longer.

Innovation and adaptation have taken on new urgency. But as the recession’s grip intensifies, managers at all levels will have to find ways to do more with less.

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  For a few suggestions on how to squeeze more creativity out of your innovation dollar during tough times I recommend “Innovating in a recession: a low-cost guide” by Prophet consultants Anthony Gerardi and Jennifer Dominiquini. If you need an incentive that will cheer you up, remember that companies that continue their commitment to innovation in a downturn are more likely to reap greater rewards than ones that cut resources, slow down product launches and refocus on the core.

Strategy & Leadership will have more recession advice in upcoming issues, but for now, we hope you find a way to hang tough, strategically.

Robert M. RandallEditor