A Harvard Business Review study has shown that 17% of businesses don’t survive a recession and 80% take longer than 3 years to reach their previous growth rates for sales and profits. Only 9% of businesses flourish after a recession. What was their secret to success?

Well, the study also showed that it wasn’t necessarily what you would expect.  Businesses who cut costs faster and deeper didn’t necessarily survive and flourish better.  We’ve spent the last 3 months telling anyone that will listen that they need to be careful not to slash and burn their business in response to the crisis because they will need their valuable people assets to help pull them through the other side.  It’s great when the Harvard Business Review agrees with us!

It’s also not a matter of bold investment or being on a strong growth trajectory heading into a recession.

Instead, the companies most likely to flourish after a recession are those that master the balance between effective cost cutting/saving to survive today and investing to grow tomorrow.  And the most successful combination proved to be cutting costs through operational efficiency over slashing team numbers, combined with developing new opportunities through R&D and marketing and investing in assets.

Easy to say, complicated to get the detail right, and even harder to implement … If you don’t have a plan.

Now is the time for businesses to understand the implications of the current business environment, create a powerful strategic plan and focus their resources and efforts on building assets, while retaining and engaging their most valued assets – their people.

The silver lining in Covid-19 for businesses is that this is a chance to do all those metaphors we’re seeing thrown about – peel back  the layers to figure out what makes the business tick, innovate and pivot on product & service delivery, and reinvent the team.  Cliched and corny as they may be, the catch cries that we are hearing right now are true.  It is time to stop and look at what we are doing it and why; time to take a good look at the people in our teams – are they the right people, are they doing the right jobs, are we giving them the right direction; time to thinking carefully about what the demand will be for our product or service as we come through and out of Covid-19 and the recession.

It is time to think strategically about all of this, and plan what your business needs to do in the next 3, 6 and 12 months to be one of the 9%ers that flourish post-recession.