It’s still too early to tell what effect COVID-19 will have on your business, but there are some timely takeaways from "Roaring Out of Recession", by Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen in the Harvard Business Review, March 2010.
It's still too early to tell what effect COVID-19 will have on your business, but there are some timely takeaways from "Roaring Out of Recession", by Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen in the Harvard Business Review, March 2010.
“Our findings are stark and startling. Seventeen percent of the companies in our study didn’t survive a recession… 80% of them had not yet regained their pre-recession growth rates for sales and profits,” said the authors.
One key takeaway: A company that keeps a balance of “defensive and offensive moves has the highest probability - 37% - of breaking away from the pack” during difficult times. For context, defensive moves are considered cost cutting and layoffs, while offensive moves focus on operational improvement.
The question for you to consider today: Is it time to look at your customer engagement methodology so you can better focus on the goal of optimizing your revenue and profitability?
Those companies that balance their cost cutting with a focus on operational improvement join an elite group of 9%. The result: they beat the average with a post downturn return of a 7% increase in sales (6.6% vs. 13%) and outperformed rivals by 10% in terms of sales and profit growth.
Since sales have slowed for most, it’s an optimal time to review your customer engagement and revenue process. It can be a modest effort; a brief but effective assessment can be done in a few hours. Then you can determine if your business is in a position to emerge as a more competitive, healthier and profitable organization when we come out the other side of this.