For the vast majority of adults, we have been living through the worst economy in our working lifetimes. Unemployment rates have hit double digits. The Dow has been off by over 50 percent. The value of our homes has declined precipitously. Foreclosures are up and the availability of credit is down. The dollar is at historic lows, and the string of dower economic news continues. Almost everyone has been personally affected by the failing economy.
But, the economy will turn around. It always has. In fact, there is evidence that the recovery may have already begun. The Dow has recovered almost half of the value it lost. Initial unemployment claims are trending somewhat lower. No one can predict the future with certainty. But, if history is any guide the US will pull out of this recession. Companies that are poised for the coming upturn will do exponentially better than their peers who are still in a defensive posture. In fact, many large and successful companies were started in the midst of recession.
In 1876 the US was in the middle of a six-year recession. It was in this year that Thomas Edison established General Electric, now the third largest company in the world. A garage in Palo Alto at the end of the Great Depression was the launching pad for Hewlett-Packard. Harvard University dropout, Bill Gates, founded Microsoft in the recession of 1975. Existing companies have also been able to set the stage for great success in the midst of economic turmoil. For example, Burger King launched its now famous Whopper during a recession in 1957.
It’s clear; businesses that are prepared to take advantage of an upturn can reap significant benefits. The question is how can you position your business to capitalize on the opportunity presented by the recovery? The key is to make certain that your strategy, processes, and people are working in concert to achieve your business goals. During periods of rapid expansion, management is often so overwhelmed working in the business that they don’t have time to work on the business. The lower volumes that often accompany a downturn may provide management the opportunity to step back from the day-to-day running of the enterprise to ensure the alignment of strategy, processes and people. In our experience, doing so will result in huge benefits when the upturn inevitably comes.