"I was taught to never waste a good recession," Angela Ahrendts remarked during her tenure as the CEO of global luxury fashion house Burberry. Although recessionary cycles present difficult challenges for almost everyone, many leaders capitalize on them as unconventional times for becoming more innovative, more competitive and more relevant, setting a strategic course for sunnier days.
We've been living in an unprecedented period of economic expansion by historical terms, which means a downturn could be around the corner. Here are five practical and actionable things that could help you survive challenging market conditions and stay relevant, differentiated and indispensable.
Look, listen, learn
Start by rallying your team by reassuring them of your commitment to living out your organization's mission, vision and values. Once you've doubled-down on what works, affirming the things that make you uniquely you, take steps to refine even further. In 2009, after a number of troubling years and diminishing sales, Domino's publicly acknowledged customer feedback and announced it would change—and improve—its signature recipe. Since then, Domino's has reinvented its name and place in the market—not only drastically raising the price of its stock but also growing to become the largest pizza chain in the world.
So take a good, hard look, but stop short of having an existential crisis. Now is also an ideal time to invest in research, change management and training, which are sometimes overlooked in busier cycles, and to re-evaluate team structure to align talent with opportunities on the horizon.
Work as a team
Within every organization, brand marketers and sales teams often share the responsibility of driving performance, brand engagement and revenue. During recessionary environments, however, these teams must fully align to deliver a 360-degree perspective of the shifts in customer behavior, the competitive landscape and market conditions.
Sales and marketing teams are often considered bellwethers who are able to see the first signs of a downturn. They are the frontlines in conveying the most immediate needs of customers working with tightened belts. Having access to all of these important economic and consumer insights is critical for any organization and can be a competitive advantage for most.
Focus your strengths
For brand marketers, there is no better time to review your brand and product portfolio. Scrutinize products and services that may be redundant, poorly aligned with market needs or offer little to no performance. Review and realign investment spend to those areas that offer the greatest near-term profitability and longer-term growth. If these areas are one and the same, all the better. While born out of company-wide turmoil rather than an economic recession, there is perhaps no greater testament to radical housecleaning than Apple. With the return of Steve Jobs as CEO, the company reduced the number of products to a focused core, thus focusing efforts on quality and innovation.
Small changes contribute to incremental revenue, profit and share while larger revisions can help reposition brands and entire companies, transforming them from a customer perspective and possibly filling a market void that will drive even greater revenues.
Find new markets
New economic conditions can provide the best and most immediate encouragement to evaluate new markets, categories and segments. In down cycles, it's important to fish where the fish are. Launching in November 2008, Groupon quickly became a platform for dozens of companies to reach consumers with easily accessed promotions and deals. Successfully filling a white space for both consumer and business needs, Groupon effectively created a new category by seizing on a cultural and economic flashpoint, which resulted in one of the largest public offerings at the time.
The wisdom of targeting counter-cyclicals is also good advice. Start there, then explore other territories that you may never have considered, which could include adjacent categories or even launching new products and services. Look for opportunities to realize new revenue streams, gain new efficiencies and develop new competencies.
Dips in the market can be great times to innovate and to incubate new products and services. In 2009 and the depth of the Great Recession, Amazon's sales grew by 28 percent by innovating with products, specifically in their line of Kindle products, expanding market share and securing their place as a provider of quality, low-cost products. Amazon's incredible momentum and unprecedented success can provide some valuable lessons: don't be afraid to try an iterative approach, testing new ideas with untapped customer segments. Let them know that their input is critical to creating offerings that best serve them. This is a great way to build more collaborative relationships with new or existing audiences.
The slack in demand can decrease the cost of required resources for research and development and marketing. As the tide ebbs, marketers can also see the rocks—or barriers—that times of higher growth once hit. Use this opportunity to innovate better processes and better products that deliver on your vision.
Although economic history teaches us that recessions may be predictable and inevitable, the way that we choose to use these times doesn't need to be. Great leaders—and great marketers—can learn to find opportunity and growth in even the depths of the market and plant the seeds for the days and years of growth to come.
Jim Misener is the President at 50,000feet, a Chicago-based creative agency